Do you believe that airline industry loyalty programs are becoming a disincentive due to the inability to redeem the rewards for true value in a timely manner?

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For the most part, airlines are commoditized and so are their customer loyalty programs. With the exception of airlines like Virgin, Southwest and Singapore, they principally compete on price and schedule. Their loyalty programs have been co-opted for a variety of reasons, one of which is that the rewards – such as the use of frequent flyer miles – have become a nightmare to redeem, and have really diminished perceived value. Virgin, Southwest and Singapore have very cohesive, customer-focused cultures, and this is evident based on the treatment passengers receive and the experiences they share. Airline loyalty programs haven't necessarily become a disincentive, but they aren't building the loyalty behavior the airlines desire.

This was first published in December 2008

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