A credit card for redeeming points across 26 airlines

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 programs of any of the airlines, Star Alliance CEO Jeffrey Goh said at a briefing Thursday. Star Alliance members span airlines from Singapore Airlines Ltd. to Deutsche Lufthansa AG and United Airlines Holdings Inc. The unusual move is aimed at better linking peoples’ credit card spending with loyalty miles. Loyalty programs 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 programs 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 programs 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 programs were a lifeline for carriers, with BA owner IAG SA raising almost $1b by selling points to American Express. Others including Delta and United laid down their programs as security against billions of dollars of loans and bonds.<br/>