System and Analysis design project



Initiating FlyHigh Airlines’ Loyalty Program
FlyHigh Airlines, a premium airline company, renowned for its expansive route network
spanning both domestic and international destinations, serves millions of passengers each year.
The airline prides itself on delivering exceptional customer service, ensuring reliability, and
providing comfort, which has cemented its status as a leader in the aviation industry. However,
the highly competitive nature of the airline industry, coupled with changing passenger
expectations, demands ongoing innovation, particularly in how customer loyalty and
engagement are fostered.
In recent times, FlyHigh Airlines has identified a significant shift in consumer behavior and
preferences. A growing segment of passengers now make their airline choices based not just on
price and convenience but also on the additional benefits and recognition offered to frequent
flyers. This change in consumer priorities has coincided with a slight dip in FlyHigh’s customer
retention rates and a noticeable decrease in the frequency of travel among its previously loyal
customer base, with these trends being especially pronounced among millennials. This
demographic has shown a clear preference for airlines that provide more tailored experiences
and rewards.
This shift is partly due to intensified competition from other carriers that have effectively
leveraged their loyalty programs with more innovative and adaptable reward schemes.
Furthermore, insights from customer feedback have highlighted a perception that FlyHigh’s
existing rewards program is perceived as outdated, lacking customization, and failing to deliver
sufficient value to encourage consistent loyalty.
In response to these insights and the imperative to maintain its competitive standing, FlyHigh
Airlines has committed to the development of a new loyalty program. This initiative aims to
cultivate a loyalty program that is not only more engaging and flexible but also highly
personalized, with the objective of reinforcing customer loyalty, boosting passenger retention,
and appealing to a broader demographic, including the critical younger traveler segment.
Problems Identified In Current Solutions
1. Complexity in Earning and Redeeming Points: Customers find the program’s structure
complex, with opaque rules around how points are earned and redeemed, leading to
frustration and disengagement.
2. Limited Reward Options: The rewards catalog is perceived as limited and unattractive,
lacking both variety and accessibility to a broader segment of the loyalty program’s
3. Inadequate Personalization: The one-size-fits-all approach fails to acknowledge
individual customer preferences or travel patterns, missing opportunities to engage
customers with personalized offers.
Business Objectives
1. Enhance Customer Loyalty: Strengthen emotional and behavioral loyalty among
existing customers by providing a loyalty program that recognizes and rewards their
patronage in a meaningful way.
2. Increase Passenger Retention: Reverse the trend of declining retention rates by offering
a loyalty program that incentivizes repeat bookings and long-term engagement.
3. Attract a New Customer Base: Target potential customers, particularly millennials and
digital natives, who value personalization and flexibility, by offering a loyalty program
that resonates with their preferences and lifestyle.
4. Differentiate in a Competitive Market: Stand out from competitors by offering a
unique loyalty program that goes beyond traditional rewards, incorporating innovative
benefits and personalized experiences.

You are now assigned to develop the loyalty program from scratch for FlyHigh, you should
identify the product requirements and what is needed to be built, create the loyalty program
specifications so it integrates with the current reservation system.
1.1 Research Plan:
The primary objective of this research is to gather actionable insights into customer preferences,
behaviors, and expectations regarding airline loyalty programs. This investigation aims to inform
the development of FlyHigh Airlines’ loyalty program, ensuring it meets the evolving needs of
travelers and enhances customer loyalty and retention. By understanding the factors that drive
loyalty in the airline industry, the research will guide the design of a program that stands out in
a competitive market and aligns with FlyHigh’s strategic goals.
Previous Studies
A review of existing literature and case studies on airline loyalty programs reveals several key
• Personalization and Flexibility: Research underscores the importance of offering
personalized rewards and flexible redemption options to meet diverse customer needs.
• Digital Engagement: Studies indicate a growing expectation for digital-first
interactions, with customers favoring airlines that provide seamless digital experiences.
• Experiential Rewards: The shift towards valuing experiences over material goods is welldocumented in consumer research. Travelers are seeking unique and memorable
experiences as part of their loyalty program rewards, such as exclusive events, personalized
travel experiences, and cultural immersions (Source: McKinsey & Company, “The
Experience Economy”).
Target Audience
The research will focus on two primary user groups:
• Frequent Flyers: This group includes business and leisure travelers who fly multiple
times a year, highly valuing benefits that enhance their travel experience and
• Millennial and Gen Z Travelers: Younger travelers who may not fly as frequently but
prioritize personalized experiences, digital engagement, and sustainability. They are
looking for loyalty programs that reflect their values and lifestyle. Both groups will be
analyzed for demographic (age, income), psychographic (values, lifestyles), and
behavioral (travel frequency, booking preferences) characteristics to tailor the loyalty
program effectively.


Scope The research will cover: • Customer expectations and preferences regarding loyalty program benefits and rewards. • The effectiveness of current loyalty program features and areas for improvement. The research will not cover: • General travel trends unrelated to loyalty programs. • Detailed financial analysis of loyalty program impacts on FlyHigh Airlines’ revenue. Methodology Research Methods: • Surveys: Online surveys will be distributed to a diverse sample of FlyHigh Airlines customers to gather quantitative data on preferences and behaviors related to loyalty programs. • Interviews: Semi-structured interviews will be conducted with selected participants from both target groups to gain deeper insights into their expectations and experiences with airline loyalty programs. • Focus Groups: Small focus group sessions will be organized to discuss new ideas for loyalty program features and gather feedback on potential offerings. Participant Selection: Participants will be selected based on their flying frequency, age, and engagement with existing loyalty programs to ensure a representative sample of FlyHigh Airlines’ customer base. 7 1.2 Interviews Transcripts: Interviewer: Could you share how often you travel and why? Frequent Business Traveler: I’m on a plane about every other week for work, mostly within the country but occasionally overseas. Frequent Leisure Traveler: Traveling is a big part of my life. I manage to get away almost monthly, exploring both domestic and international destinations. Gen Z, Student: My schedule allows for 2 to 3 international trips a year, mainly during school breaks. Gen Z, Young Professional: I try to fit in short trips whenever I can, usually around weekends or public holidays, and save up for one big international trip a year. Interviewer: What factors influence your decision when booking flights? Frequent Business Traveler: It comes down to convenient flight times and smooth connections, given my tight schedule. Frequent Leisure Traveler: I’m always looking for comfort within my budget. Direct flights are a plus. Gen Z, Student: Price is my main concern, but I also look for airlines taking steps to reduce their environmental impact. Gen Z, Young Professional: Deals are important, but so are in-flight amenities like Wi-Fi and entertainment options. Interviewer: Are there specific features or services you wish airlines would offer? Frequent Business Traveler: More flexibility with flight changes would be a lifesaver for me, given how often my plans can shift last minute. Frequent Leisure Traveler: Unique experiences or perks that make travel more exciting, like exclusive tours or destination guides, would be great. Gen Z, Student: I’d appreciate efforts to offset carbon emissions or partnerships that allow me to make more sustainable choices while traveling. Gen Z, Young Professional: Something that recognizes and rewards even the smaller trips I take would be nice, making every travel experience feel valued. 8 Interviewer: If you had identical flights with company A and B, you have a loyalty program with A but A offers the flight at a higher price, what would you pick and why? Frequent Business Traveler: I’d likely stick with company A because the benefits of the loyalty program, such as upgrades and priority services, outweigh the cost difference for me. The value I get from being a loyal customer, in the long run, is more significant. Frequent Leisure Traveler: It depends on the price difference. If it’s not too much, I’d go with company A to benefit from the loyalty program. However, if the cost saving with company B is substantial, I might choose them instead. Gen Z, Student: I’d probably choose company B if the price difference is significant. As a student, budget is a key factor for me. However, if company A’s loyalty program offers perks that could save money or enhance my travel experience in other ways, I might consider sticking with them. Gen Z, Young Professional: For me, it’s about the overall value. If the loyalty program with company A offers long-term benefits or perks that I value highly, I might be willing to pay a bit more. But, I’d have to weigh it against the immediate savings offered by company B. Interviewer: Have you participated in any airline loyalty programs before? If yes, can you share what you liked most and what aspects you felt could be improved? Frequent Business Traveler: Yes, I’ve been part of a couple of programs. What I appreciate most is the priority treatment – like faster check-in lines, lounge access, and priority boarding. What could improve is the flexibility in using points, especially for last-minute changes or upgrades. Sometimes, the blackout dates and the limited availability of reward flights can be frustrating. Frequent Leisure Traveler: I’ve joined a few loyalty programs mainly to accumulate miles for flights. The best part is definitely redeeming miles for free trips or upgrades. However, I think these programs could do a better job with more personalized rewards. It often feels like a onesize-fits-all approach, which doesn’t always match my travel preferences. Gen Z, Student: I’m in one program, but I haven’t gotten much out of it yet. I like the idea of earning points for my travels, but as a student, I don’t travel enough to really see significant benefits. I wish there were more small-scale rewards for less frequent travelers like me, or partnerships with other companies I use more often, which would make it feel more relevant and immediately rewarding. Gen Z, Young Professional: Yes, I’ve experimented with a few programs. The aspect I like most is accessing exclusive deals and offers that come with membership. However, I’ve found the programs somewhat lacking in engagement and interaction. They could improve by incorporating more modern, tech-savvy ways to earn points, like social media challenges or environmental initiatives, making the experience more engaging and fun. 9 1.3 Survey Questions 1. What is your primary consideration when choosing an airline? • Competitive pricing • Flight times and convenience • Additional perks and rewards • Airline reputation and customer service 2. How often do you participate in airline loyalty programs? • I am not a member of any loyalty program. • I am a member but rarely use the benefits. • I occasionally use my membership benefits. • I frequently use my membership benefits. 3. To what extent do the rewards offered by an airline’s loyalty program influence your choice of airline? • Not at all • Slightly • Moderately • Significantly • Completely 4. Which of the following loyalty program rewards would you find most appealing? (Select all that apply) • Flight discounts and free flights • Seat upgrades and extra luggage allowance • Non-flight rewards (e.g., hotel stays, car rentals) • Environmental contributions (e.g., carbon offsets) • Exclusive experiences (e.g., airport lounge access, special events) 5. How old are you? • Under 18 • 18-24 • 25-34 • 35-44 • 45-54 • 55+ 10 Summary Based on responses from 300 participants: Flight Preferences • 58% of respondents indicated that competitive pricing is their primary consideration when choosing an airline. • 42% highlighted that additional perks and rewards are significant factors in their decision-making process. Loyalty Program Engagement • Only 25% of respondents actively engage with their current airline loyalty programs, utilizing benefits frequently. • 65% expressed that the rewards currently offered by loyalty programs are not compelling enough to significantly influence their airline choice. Desired Features in a Loyalty Program • 55% showed interest in loyalty program rewards that offer flexibility, such as seat upgrades and extra luggage allowance. • Among respondents under the age of 35, 60% expressed a keen interest in non-flight rewards, including contributions hotels or cars and related travel activities, and exclusive experiences. 11 1.4 User Base Distribution Based on our analysis of the current user base and recent travel bookings, the distribution among the identified segments is as follows: • Frequent Business Traveler: 30% • Frequent Leisure Traveler: 25% • Gen Z, Student: 20% • Gen Z, Young Professional: 25% Financial Impact Analysis 1. Frequent Business Traveler • Percentage of User Base: 30% • Average Annual Spend (Per Person): $4,500 • Contribution to Revenue: 35% • Notes: This segment shows the highest loyalty and frequency of travel, often opting for premium services. They contribute significantly to onboard purchases and revenue. 2. Frequent Leisure Traveler • Percentage of User Base: 25% • Average Annual Spend: $3,000 • Contribution to Revenue: 25% • Notes: Leisure travelers show variability in spend but tend to book in advance and are keen on package deals, contributing to steady revenue streams from ancillary services and partnerships. 3. Gen Z, Student • Percentage of User Base: 20% • Average Annual Spend: $1,200 • Contribution to Revenue: 10% • Notes: While their individual spending is lower, this group significantly influences brand perception and loyalty long-term. They are highly responsive to targeted discounts and social media campaigns. 4. Gen Z, Young Professional • Percentage of User Base: 25% • Average Annual Spend: $2,500 • Contribution to Revenue: 30% • Notes: Emerging as a lucrative segment, young professionals exhibit growing loyalty and spending power, with an interest in sustainable travel options and digital engagement. 12 Chapter Two | ANALYSIS & REQUIREMENTS SPECIFICATION 13 2.1 Product Requirements Document Based on the research findings, develop a PRD that encompasses the entire loyalty program system. This document is foundational, outlining the scope, objectives, high level requirements for both the system in general and the new feature specifically. Proposed Structure For the PRD: o Background • Context about the product, including business goals, market analysis, and the insights from user research that led to the identification of the need for the loyalty program. o Goals & Objectives • Specific objectives that the project aims to achieve, some of them might be measurable. o Scope • Description of what is included in the project scope. • Clarification of what is out of scope to prevent scope creep. o Stakeholders • List of parties involved in or affected by the project, including internal teams, external partners, and end-users. o Loyalty Program Specification & Mechanics • Detailed description of how the loyalty program will work, you must cover how points are earned, spent, and expires, and what target audience the program will focus on. And you can add on that, for example, loyalty tiers or thresholds. You are free to design the loyalty program as you like, but it should convey to both business and user needs. o Functional Requirements • Detailed descriptions of the major functionalities that the system must support. (You may write it after the UML artifacts) o User Experience Design (Bonus) • Preliminary design concepts or mockups of the user interface, emphasizing how users will experience the loyalty program, you can pick only one flow, like the redeeming or registration. o System and Integration Requirements (Bonus) • Description of how the system will integrate with existing system components or external systems. • Requirements for any APIs, data exchanges, or third-party services that the system will utilize, e.g. if your system includes maps, you may need Google Maps API. 14 2.2 UML Artifacts • Use Case Diagram: describe what the system can do from the user’s perspective, you may add on top of that the events that the system must handle, such as temporal and state events. you can refer to, as an option, to Event Decomposition Technique. Rubric: o You should only include business/product specific use cases, use cases such as Sign Up, Reset Password & Performance related or so are not accepted, you should have the perfect technology assumption. o The diagram should contain at least two actors (users), such as customer, driver, and restaurant staff. o You should use and • Activity Diagram: Given the loyalty program you identified, and given its use cases, draw the Activity Diagram for One Major Business Task, which may include several use cases. Rubric: o The diagram should represent one business task, i.e., you should not mix up between placing order and cancelling order, each one will have its own Activity Diagram, but Adding Items is part of placing orders, so it should be included. o The diagram better be high-level and describes the “Happy Path”, leaving the detailed alternatives in the Use Case Description. • Use Case Description: Write One use case description for a use case in the system. Rubric: o You should pick a complex use case, containing a set of pre & post conditions, multiple activities in the flow, and 1 or more exceptions. o Pre-conditions and post-conditions must not be basic, again, the perfect technology assumption, such as “user is registered” or “user is connected to internet” is unacceptable. The pre-conditions must define what the system state is before entering the use case, and the post-condition should describe what will be the state after the use case has successfully executed. A valid pre-condition for placing order might be “the restaurant is on its shift” or “there are available drivers”. While for postcondition, “a driver received the order request”, “the restaurant receives the order” or whatever suites your requirements. o The flow of activity should contain all the user interactions needed to accomplish the use case from the system point of view, so for placing orders, you may start with adding items and end up with assign driver as a last step for the main flow 15 • Domain Class Diagram: Show the entities and their relationships in your system, without diving in the operations/ methods, this should act as a draft to understand what the system looks like Rubric: o You should identify each entity/domain model that the system should capture and deal with. o You are not required to specify the exact relationship such as aggregation or composition. o You are required to specify the cardinality. o You should add the most necessary fields for each class. o At least one Many-to-Many relationship o At least one generalization (inheritance) 16

Chapter Three | PRESENTATION

The presentation should succinctly cover the project’s scope, including the system
overview the requirements of the system & its new feature, and the artifacts created as part of
the analysis and planning process. Each group member should focus on a specific segment,
providing a coherent narrative of the project from conception to design. However, please note
that, each member should have understanding in each segment, and can answer any question
regarding the project.
Proposed Presentation Structure:
1. Introduction to the System and Context (1 minute)
• Presenter 1: Offers a quick overview of business case, the motivation behind the
project, and the current solutions available in the market. This sets the stage for
why the project is relevant and needed.
2. PRD (2 minute)
• Presenter 2: Discusses the PRD, focusing on the objectives and scope the system.
Briefly describes the functionality of the new feature and how it addresses the
needs identified in the research phase.
• Presenter 3: Describe how the loyalty program you are building will work.
3. UML Artifacts (3 minutes)
o Presenter 4: Describes the Activity Diagram for one of the business tasks
related to the new feature, explaining the flow of actions and decisions.
o Presenter 5: Presents the Use Case Diagram, explaining the main functionalities
and user interactions with the system.
o Presenter 6:
• Provides an overview of a Use Case Description for another complex use
case, including the preconditions, postconditions, flow of events,
exceptions, and acceptance criteria.
• Briefly introduces the Domain Class Diagram, showing the entities and
their relationships.