Star Alliance to offer credit card
Star Alliance—the largest of the three global airline groups—is planning to offer a co-branded credit card that will allow a person to redeem points across all 26 members.
The card, to be launched later this year, will allow users to earn points via their spending, like a regular credit card, and then redeem those points via the frequent-flyer programmes of any of the airlines, Star Alliance CEO Jeffrey Goh said at a briefing on Thursday. Star Alliance members span airlines from Singapore Airlines Ltd to Deutsche Lufthansa AG and Air India.
The unusual move is aimed at better linking peoples' credit card spending with loyalty miles. Loyalty programmes can be a very lucrative business for airlines, which typically generate revenue by selling points to credit card operators, hotels and shops. Airlines make a profit because they sell the points for more than it costs to redeem them.
"This area is quite the holy grail for most individual airlines," Goh said. But there's room for frequent-flyer programmes to mature, he said, without disclosing further details about the mooted card, including which financial institution will be a partner.
While it's common for airlines to offer loyalty programmes as well as form partnerships with other airlines and merchants, a combined credit card with more than two dozen members will be a first for the industry.
During the worst of Covid, loyalty programmes were a lifeline for carriers, with British Airways' owner IAG SA raising almost $1 billion by selling points to American Express Co.
Others including Delta Air Lines Inc and United Airlines laid down their programmes as security against billions of dollars of loans and bonds.
Separately, Goh said Star Alliance carriers are planning to jointly procure sustainable aviation fuel considering supply remains limited despite increasing calls for airlines to turn green. Goh declined to comment on the volume of fuel the group is planning to purchase.
The alliance will also look to partner with large multinational corporations with a "significant travel footprint" on clean fuel, in a bid to get businesses to subsidise airlines' cost, Goh said.