Air France and KLM mortgage Flying Blue program for 1.5bn : that's how much a loyalty program is worth
Here at TFC we are sick of loyalty programs and points, one of the questions we are most often asked [...]
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Here at TFC we are sick of loyalty programs. and points, one of the questions we are most often asked by those who know little about this world is "but how do companies make money if they give away points?"
Today I take the cue from the news reported by several sources to show how, even in Europe, loyalty programs can be a "golden goose" for airlines.
Flying Blue mortgaged to finance growth of Air France and KLM
Air France-KLM is in talks with Apollo Global Management to raise funds to improve its balance sheet in a deal that would involve spinning off its loyalty plan into a new entity. The news emerged from an analysis of the just-released quarterly report. The news bounced around many specialized sites, such as. The Airline Observer.
Almost all airlines have outsourced the management of the loyalty program, but it remains the property of the carrier. Even ITA Airways' Volare, for example, is a separate entity from the carrier.
Making it clear what size we are talking about is the value of program evaluation Flying Blue, which has more than half a million members in Italy, is on budget for more than $1.5billion. An incredible value when you consider that Lufthansa bought ITA Airways' 41% for 325 million euros.
Why make a spin off of the fidelity progrmma
There are many reasons for this, certainly by doing so the Franco-Dutch company will have an important cash injection to continue in its growth process, and possibly even shop around European companies, there is a lot of talk about TAP Portugal As a response also to the sale of ITA to Lufthansa.
In addition to making cash FB will be able to take advantage of a leaner structure and seek to increase its customer base and partnerships so as to increase program profitability.
In conclusion
We will see whether this change will also mean an "Americanization" of the program or simply a financial strategy, in any case for us FB members a news item to keep an eye on.
- 6,000 Mile Registration Bonus
- Collect miles WITH EACH PURCHASE
- Your miles with no expiration*
- No fees for ATM withdrawals and foreign purchases
- Without having to change banks
- Autonomous card activation
- Multi-function mobile application
- Free travel insurance
- Free credit for up to 7 weeks
- Contactless Payment
- Mastercard® SecureCode
- 20€ discount directly in your statement by spending €60 in one or more transactions with Carta on Italotreno.it
- Free fee the 1st year. From the 2nd €5.50 per month
- You can choose to pay in full or in installments
- Premium level of the Italo Più program
- 4 Vouchers per year for access to Italo Club Lounges
- Preferential Access to Italo's Fast Track at the station
- For every 5 purchases of Italo ticketing and/or onboard services made with Italo American Express Credit Card you will receive 1 voucher for room upgrade
- Welcome bonus of 100,000 Volare points upon reaching 6 thousand in spending in the first 3 months after card issuance
- Accumulate 1.5 qualifying Volare points for every euro spent, accumulate an additional 3 non-qualifying Volare points ( for a total of 4.5 Volare points) for every euro spent on ticketing purchases and other services offered by ITA Airways
- Access to the Premium Club of ITA Airways' Volare program.
- ITA Airways Lounge Access
- Free excess baggage
- Points Back