Case Analysis Of The Accounting Method Of China Eastern Airlines' Frequent Flyer Program

With the rapid development of the world economy and the improvement of people's living standard,the aircraft has become one of the essential means of transportation in daily life.China has a large population and huge potential for development,which also brings valuable opportunities for Chinese airlines.But the industry environment,between the airlines competition is increasingly fierce,these are forcing airlines to launch a variety of promotional policies to attract passengers,airlines' Frequent Flyer Program(FFP)which developed.With the continuous development of China's aviation industry,the planning of the FFP account is still a problem that has not been paid enough attention.In terms of the accounting and disclosure of the FFP,the existing standards and regulations are not perfect.However,with the frequent flyer membership of each airline has increased year by year,accounting for frequent flyer bonus points has become more prominent,accounting for passenger plans often become a problem can not be ignored.This paper selects China Eastern Airlines(CEA)as a case,because of CEA's FFP accounting disclosure is more perfect,CEA has used two kinds of accounting methods for the actual operation,which can provide a more complete accounting information.This paper first introduces the research background of FFP and related literature,followed by CEA's frequent flyer program as an example,the development status of China Eastern Airlines frequent flyer program were introduced,than introduces the related concepts and constant passenger plans and policy requirements,applicability and difference analysis of two methods of accounting for deferred income method and incremental cost method from the perspective of theory,at the same time,accounting for the global aviation industry FFP accounting were introduced.After the CEA's FFP accounting policies and relevant financial data as the foundation,two kinds of FFP accounting mode of the specific analysis,comparative analysis of two methods of the accounting process,applicable conditions and financial impact.The aim of this article is on the eastern case analysis,through the analysis of the results of two kinds of accounting methods are pointed out the respective advantages and shortcomings,to urge enterprises to improve the FFP accounting and disclosure process,improve the relevant departments have certain enlightenment significance to the FFP accounting attention out.