Frequent flyer programmes offer low cost carriers the opportunity to both boost revenue and increase customer loyalty, according to a new study by Carlson Marketing.

"Now is the time for the LCCs to make loyalty programmes differentiated and customer-value oriented if they are able to continue to be competitive," says Carlson Marketing director global airline practice Evert de Boer. "It is therefore only natural for LCCs to invest in and continue to develop their frequent flyer programmes. They can make LCCs more competitive, profitable and better positioned to retain valuable customers."

The study, which focused principally on European and Asian LCCs, concludes that a sophisticated loyalty programme is effective in attracting travellers and generating incremental revenue.

"There weren't any surprises," Carlson spokesman Barry Wegener tells ATI. "It reconfirmed the idea that if an LCC runs it [a frequent flyer programme] well, it can be a point of advantage or differentiator from other carriers."

Loyalty programmes can provide value to the airline by acting as a "key influencer" of behaviour, a source of third-party revenue and a tool to understand and predict customer behaviour.

"The time is right for LCCs to apply the lessons in loyalty that the legacy carriers have learned over the past 20 years," DeBoer says. "In fact, there is a natural fit between the LCCs ancillary revenue drive and the revenue generation from a well run loyalty programme."

Source: Air Transport Intelligence news