Key Factors That Determine Return on Loyalty Evidence From Ethiopian Airlines Loyal Customer Base
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Date
2015-05
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Addis Ababa University
Abstract
Full service airlines have frequent flyer programs. They carryout targeted marketing campaigns and provide economic rewards to their registered frequent flyers to induce loyalty towards their brand. Airlines measure returns on their campaigns but do not measure the extent to which their repeated effort has induced loyalty on the customers. The purpose of this research study is therefore to investigate the key factors that determine return on loyalty in the case of Ethiopian Airlines and to determine the degree to which customers have become loyal to the airline. Eleven key factors - safety, punctuality, aircraft, frequency of flights, schedule, frequent flyer program, Alliance, ticket price, airline reputation, in-flight food and drinks, and in-flight staff service were selected as predictive variables that drive loyalty to an airline. Three Loyalty factors (1) loyal customers’ satisfaction, (2) loyal customer’s intention to repurchase from the same airline, and (3) loyal customers’ intentions to recommend the airline to others were used to measure the degree of loyalty of a customer. A total of 2,638 frequent (loyal) customers of Ethiopian Airlines residing in Ethiopia; having made more than one international air travel in the year 2014 were surveyed. 379 usable questionnaires were obtained from the respondents. The respondent’s data from the survey and data from the airline frequent flyer database was used in a model to test the degree of loyalty of frequent customer towards Ethiopian Airlines. Statistical regression analysis and two population test were used to reveal the return on the loyalty. The findings of the study show that 56% of the frequent flyers chose Ethiopian Airlines on all their travel indicating 100% loyalty. This implies that airlines can measure the degree of loyalty of their frequent flyers which are the ultimate return on loyalty from a customer.
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Determine Return