Attribute Level Performance Dimensions of Airline Frequent Flyer Program: A Factor Analysis Approach
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Airline Loyalty Program also known as Frequent Flyer Programs have become one of the most widely used marketing tools for retaining customers and motivating service usages. In order to maintain or improve market share and gain profit from operations it is very much essential for the airline operator to retain its loyal customers in the long run. One of the customer retention strategies followed by airlines is the Frequent Flyer Program. This paper aims to explore the underlying dimensions of Frequent Flyer Program based on its attribute level performances perceived by frequent passengers. The underlying dimensions of Frequent Flyer Program are explored through Factor Analysis using Principal Axis Factoring method with direct Oblimin rotation using SPSS. Two dimensions evolved from this study are Loyalty Program Structure (non travel) specific factors and Loyalty Program Service (travel) specific factors. There exists an overall statistical validity of the measurement model, established by conducting Confirmatory Factor Analysis using Structural Equation Modeling. Perceived differences in factor dimensions among passengers of different status levels are also compared and drawn implications for the airlines.
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