Jesper Fredborg Larsen and Susanne Storm
Jesper Fredborg Larsen: Økonomisk Institut, Syddansk Universitet, Postal: Studiestræde 6, 1455 København
Susanne Storm: Institut for Regnskab, Finansiering og Erhvervsjura, Syddansk Universitet, Postal: Studiestræde 6, 1455 København
Abstract: Frequent Flyer Programmes (FFPs) are used by all the major airlines in the world as a marketing strategy to keep their customers loyal, chiefly the high yield business travellers. The question asked in this article is: Are FFPs barriers to entry to the EC air transport market for airlines without such a programme? On the basis of three economic models - by R.D. Cairns and J.W. Galbraith, A. Banerjee and L.H. Summers and by P Klemperer - and the attitude of the European Commission, the question is answered in the affirmative. The FFP membership or when the cost per programme-member is low. Some remedies to the entry problem are proposed in the article.
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