The company launched a frequent flyer program in January 2001; this is the item that concerns me the most. As of December 31, 2006, there was approximately $1.5 million (at retail value) of unaccrued obligations, while at December 31, 2007 this had increased to $3.2 million. The program has been, apparently, highly successful, to the extent that the company has had to "bump" regular (paying) customers off certain flights in order to fulfil frequent flyer obligations. With ever-increasing competition and the need to control costs, this program will be expanded considerably, according to Samuel Jett. "Retaining and building customer loyalty is a prime objective", according to Mr. Jett.
The program has, according to management, been a major influence in increasing the company's load factor (or the percentage of seats occupied on flights) from 60 % in 2006 to 70 % in 2007. Awards granted under the program are earned by program members when they fly a specified number of......
Join Now or Login to view the rest of this paper.
Approximate Word Count: 327
Approximate Pages: 2 (260 words per double-spaced page) |