The importance of frequent flyer programmes in airline selection : a survey of corporate travel management in large-sized corporations in South Africa

Abstract

In many organisations, air travel is an essential part of conducting business in order to meet company objectives and goals. The selection of a preferred airline is a complex undertaking. Corporations may obtain discounts based on expenditure commitments; the airline may have a frequent flyer programme; or a low cost carrier may offer a better alternative to full service carriers. The literature on corporate travel is fairly limited with determinants determining the selection of airlines having been studied from other perspectives such as the business traveller, thus, this study should make a significant contribution to this field by generating new information on corporate travel and in particular corporate air travel decisions. The literature review provides a demarcation of the broad concepts of the buying approach towards corporate air travel. Also discussed is the relationship between the key role players in airline selection: the corporate traveller; the travel management company; and the airline. Various determinants of airline selection by corporations are identified and the role of frequent flyer programmes is analysed. Furthermore, the move towards low-cost airlines as a preferred choice for corporate travel is investigated. The empirical phase of the research study focussed on identifying the determinants of airline selection by large-sized corporations in South Africa; the relative importance of frequent flyer programmes; and the move towards low-cost airlines as a preferred choice for corporate travel. The target population was sampled using a non-probability convenience sampling approach with a newly designed quantitative, ex post facto web-based questionnaire, distributed via e-mail to the target population. Exploratory factor analysis was done to identify whether an underlying structure of airline selection determinants exists from which the relative importance of frequent flyer programmes could be assessed. From the results, a model of corporate airline selection determinants was derived. Then, the model was compared to the conceptual model formulated from the literature survey. A number of important selection determinants were identified, and it became evident that frequent flyer programmes are, generally, not considered a decisive determinant in the selection of a preferred airline by corporations. However, the influence of low-cost airlines was shown to be considerable, in line with the endeavour to save on air travel expenses within a corporate air travel management programme. The findings should assist both corporations and airlines with the design of their air travel buying approaches and marketing strategies respectively.