When you have to do a flight booking, it is quite natural to search for the best airfares prevailing on
that day across all the airlines and travel companies. It is very seldom that
you would not search for the cheap air tickets but rather go for your preferred airline at the very first instance
and do the booking. It is precisely this reason of an agnostic consumer behaviour
which prevents consumers from being brand loyal that is prompting the credit
card companies to end their alliances with the airlines. The recent move of the
Citibank and Jet Airways to put an end to their 13 year long alliance of
co-branded cards is the result of this consumer behavior.
India being a price-sensitive market, the people in India
are willing to leave one airline for the other if that other airline is
offering better air tickets rates
and deals. Customers are not loyal when it comes to buying the flights. Further,
the fragmentation in the industry has restricted the growth in the customer base
of a single airline. There is a demand from the customers that they shall be
allowed to accumulate their rewards points from the different airlines and redeem
the same. The co-branded cards fall short of the customer expectations in this
regard since the customers are not given the desired flexibility of
accumulating the points and getting these redeemed.
The moves also points to some other facts, such as:
- No single airline has been able to gain customer loyalty due to deep fragmentation of the industry.
- Credit uptake is again on the upswing and the card companies might be willing to be more flexible for earning greater revenues.
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