State of Airport Loyalty Programs (2023)

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3   1.1 Background, Objectives, and Scope Customer loyalty programs, which can be defined as a “marketing approach that recognizes and rewards customers who purchase or engage with a brand on a recurring basis” (Salesforce 2022), are commonly used in business­to­customer (B2C) sectors. The airline industry has been operating frequent flyer programs, a special version of customer loyalty programs, since the early 1980s and has achieved significant financial and operational success. Major frequent flyer programs such as AAdvantage from American Airlines (AA) have massive membership bases (Genter and Lupini 2021); moreover, valuations of these programs, such as MileagePlus from United Airlines (UA), exceed tens of billion dollars (United States Securities and Exchange Commission 2020). Compared with airlines, airports in the United States are late adopters of loyalty programs, and their adoption so far is slow. The number of airports that operate customer loyalty programs is limited (See Section 3.1 Overview of U.S. Airport Loyalty Programs for more information). The awareness of airport loyalty programs among the public, or even travelers, has room for growth (Whitmore 2019). This synthesis provides a comprehensive overview of the current status of U.S. airport loy­ alty programs. The potential audience for this synthesis includes airport managers and other stakeholders with responsibilities to strengthen customer loyalty and engagement and increase revenue. The scope of this synthesis is restricted primarily to U.S. primary­hub airports (large, medium, and small hubs) that receive at least 0.05% of the annual U.S. commercial enplanements (FAA 2022a). 1.2 Structure of Synthesis To achieve the synthesis objectives, the project team undertook a hybrid approach to collect and synthesize information relevant to U.S. airport loyalty programs. This approach comprised the following steps: • Literature Review. Before collecting primary data from airports directly, relevant literature published in peer­reviewed academic journals about (1) airport loyalty programs, (2) airline frequent flyer programs, (3) loyalty programs in other tourism sectors, and (4) other customer loyalty programs was systematically collected. The results of the literature review are summa­ rized in Chapter 2. • Airport Loyalty Programs Overview. To provide a comprehensive overview of how U.S. airports adopt loyalty programs, an overview of the websites of all primary­hub airports was conducted to examine (1) whether airports are operating any customer loyalty programs and C H A P T E R   1 Introduction

4 State of Airport Loyalty Programs (2) if so, the key characteristics of these airport loyalty programs. The results of this overview are presented in Chapter 3, Section 3.1 Overview of U.S. Airport Loyalty Programs. • Airport Survey. To collect detailed information about airport loyalty programs not provided on airports’ websites, the project team designed a questionnaire to survey airports that (1) are operating loyalty programs, (2) are building loyalty programs, (3) had considered but decided not to pursue the idea of loyalty programs, and (4) had terminated loyalty programs. Responses from participating airport personnel are summarized in Section 3.2 Summary of Survey Results and presented in Appendix B. Survey Responses. • International Airport Loyalty Programs Overview. Several international gateway air­ ports operate customer loyalty programs that share some key loyalty features, such as rewards points and membership tiers, within their programs. Six airports and their associated pro­ grams are highlighted to enable a comparison between U.S. and international airport loyalty programs. The summary of these international programs is provided in Section 3.3 Overview of Selected International Airport Loyalty Programs. • Airport Visit and Case Examples. To witness airport loyalty program operations, the project team selected and visited three airports, which were identified as case examples. These airports are as follows: – Colorado Springs Airport (COS) – Gainesville Regional Airport (GNV) – Harrisburg International Airport (MDT) By interviewing the operational team of these airport loyalty programs, a picture of how airports view their loyalty programs and the operational details was constructed. A summary of airport visits and interviews is presented in Chapter 4. Case Examples. • Summary of Findings. Findings of this synthesis are in Chapter 5. Summary of Findings. In addition to highlighting the status of U.S. airport loyalty programs, the key difference between U.S. airport loyalty programs and international programs and between airport loyalty pro­ grams and airline frequent flyer programs is summarized. 1.3 Organization of Synthesis This synthesis is organized as follows: • Chapter 1: Introduction. This chapter provides the background, objective, scope, structure, and organization of the synthesis. • Chapter 2: Literature Review. This chapter summarizes the findings of the literature review, including airport loyalty programs, airline loyalty programs (frequent flyer programs), loyalty programs in other tourism sectors, and other customer loyalty programs. • Chapter 3: State of the Practice. This chapter provides an overview of U.S. airport loyalty programs and summarizes the survey results. • Chapter 4: Case Examples. This chapter provides a high­level overview of select case studies of airports using airport loyalty programs. • Chapter 5: Summary of Findings. The synthesis concludes with a summary of the literature review, U.S. airport loyalty programs, and international airport loyalty programs; compares U.S. airport loyalty programs with other loyalty programs; and identifies gaps in knowledge and future research needs. • References • Glossary • Appendices: Appendix A is the Survey Questionnaire. Appendix B is the Survey Responses. Appendix C is a list of hub airports and their enplanements (2021).