The Role of Personalized Communication and Frequent Flyer Programs in EnhancingPassenger Retention: A Case Study of AirSial Rewards

Abstract

Aviation industry in Pakistan is a competitive environment depending upon various factors. Some of the important ones are retention of consumer base and their subsequent loyalty with the branding that are pivotal to success of the airline. AirSial Limited was established in 2020 as a Low-Cost airline. Main aspect that was identified during the research on this project is the lack of incentives. Without providing such strategic inducement, airline’s position against contemporary domestic airlines is considerably undermined. Research contained in this Final Year Project is based on two fundamental theoretical frameworks: Switching Costs Theory and Relationship Marketing Theory. Both theories, while working in respective areas, emphasize the resolution of issues like retention, incentivization and, defection of the customers and how to navigate the barriers to induce personnel engagement in customer-oriented organizational culture. Mixed-methods approach has been adopted as research methodology, wherein, data analyses of AirSial’s operational metrics, benchmarking of regional and domestic players and qualitative assessment of industry’s best practices were conducted. With the issues at hand, proposed AirSial Frequent Flyer Rewards Program comprises of a three-tier membershipstructuredesigned to foster incremental spending and travel frequency through accumulation-based air miles or rewards. Financial projections suggest the program could increase passenger retention rates by 15-22% within the first two years, enhance Passenger Lifetime Value by 30-40% among enrolled members, and strengthen competitive differentiation particularly on AirSial’s primary flight routes. Other than foreseeable benefits, the program is designed to generate valuable customer data leading to pattern recognitions for targeted marketing campaigns, price optimizations and strategies for route specific promotions. To honour AirSial’s highest yield segments, creation of switching costs is suggested. To realize the complete project on ground, initial investments in IT infrastructure, customer relationship management systems, ongoing operation costs and cross-domain coordination between important teams of sales, revenue management, marketing and finance remains crucial. To overcome these challenges, a phased rollout starting with a Pilot Project on most valuable routes is suggested, later to be expanded systematically. Overall, this project providesAirSial’smanagement with a framework, based on evidence. It proposes a Frequent Flyer Program, while balancing the realities of local market needs and international best practices. Alongside, it focuses on providing a sustainable model to enhance passenger experience, retention and maximize lifetime value to strengthen airline’s position in Pakistan’s dynamic aviation sector.