Insight Report: Best Practice in Frequent Flyer Credit Cards

Pages: 52 Published: March 24, 2015 Report Code: VR1041MR

GlobalData’s “Insight Report: Best Practice in Frequent Flyer Credit Cards” analyzes emerging trends and industry best practices in offering credit cards targeted at frequent flyers.
Banks are increasingly using frequent flyer credit cards as a tool for maintaining relationships with top-end customers. Financial institutions are putting forward premium experiences and offers such as lounge access at airports, free or heavily discounted air tickets, preferential treatment at hotels and resorts and insurance cover to increase loyalty and develop deeper banking relationships. Consumers – particularly those in the mass affluent segment – are traveling more than ever, and forecasts for outbound trips indicate that this trend will continue in the key economies over the next five years.
The report also provides a deep dive into six key markets and discusses their market potential for card issuers, compares card offerings by the key competitors and discusses their strategies in detail.


• This report provides a comprehensive analysis of emerging market trends essential for frequent flyer card issuers over the next five years.

• It provides current and future outlines of products and services, business models and use of technology in offering frequent flyer credit cards and associated loyalty programs.

• It compares 30 frequent flyer credit cards in six key markets, and analyzes the market strategies of 18 card issuers.

• It provides case studies on how card issuers are effectively targeting frequent flyers.

• The report also covers market potential in terms of number of seats sold on flights and total revenue generated by airlines from ticket bookings in six key markets.

Key Highlights

• Banks and card issuers are facing changing regulatory, competitive and customer dynamics. This has led to an increased pressure on profitability, forcing card issuers to reassess their existing product offerings.

• Frequent Flyer credit cards are often used to maintain relationships with profitable customers (such as mass affluent customers) by offering exclusive experiences and attractive offers.

• Following the ‘one size fits all’ approach is likely to understate the potential benefits of a frequent flyer program. A limited focus on customer segmentation can lead to targeting customers with the wrong products and services, as well as ineffective marketing strategies.

• Banks and card issuers are partnering with merchants and service providers such as airlines, hotels and resorts, retailers, lifestyle brands, tour operators, insurers and reward programs to make their frequent flyer credit cards more appealing to various customer segments.

Reasons to Buy

• Understand what key competitors are doing to target frequent flyers.

• Gain insights into how product propositions are affected by consumer habits and cultural aspects.

• Gain insights into current and future sector dynamics of frequent flyer credit cards.

• Identify and understand industry best practices to streamline your product offering.

Key Players

JPMorgan Chase
Bank of America
Capital One
American Express
TD Canada Trust
Royal Bank of Canada
Canadian Imperial Bank of Commerce
Bank of Montreal
Lloyds Bank
Virgin Money
Creation/Sygma Bank
Banco Santander
Banco Popular Español
La Caixa
Shinhan Card
Hyundai Card
KB Kookmin
Samsung Card
Commonwealth Bank of Australia
Australia and New Zealand Bank (ANZ)
National Australia Bank

Table of Contents

1 Executive Summary

2 Global Frequent Flyer Credit Card Dynamics

2.1 Industry Snapshot and Future Outlook

2.2 Market Drivers

3 Best Practices and Market Trends 2015–2019

3.1 Issuers Abolishing Foreign Transaction Fees to Encourage Card Use

3.2 Frequent Flyer Programs Expected to Overhaul Reward Program Model

3.3 Increased Focus on Non-Flight Rewards to Decrease Cost

3.4 Mass Affluent Customers have Emerged as a Key Target Segment

3.5 Banks and Airlines Turning Towards Merchant-Funded Loyalty Programs to Reduce Costs

3.6 Synergy of Mobile and Social Media Channels Leading to Superior Marketing Opportunities

3.7 Gamification Gaining Prominence for Improving Customer Loyalty

3.8 Redefining Pricing Based on Nature of Banking Relationship

3.9 Product Segmentation and Rebranding to Offer Simplified Products

3.1 Outsourcing Rewards and Loyalty Programs to Gain Operational Efficiency

3.11 Increased Investment in Analytical Tools to Gain Insights into Consumer Behavior

4 Case Studies

4.1 Customer Engagement

4.2 Customer Segmentation

4.3 Rebranding and Innovation

4.4 Consumer Convenience

4.5 Use of Analytics

5 Deep Dive into Key Markets

5.1 The US

5.1.1 Market potential

5.1.2 Product comparison

5.1.3 Strategies

5.2 Canada

5.2.1 Market potential

5.2.2 Product comparison

5.2.3 Strategies

5.3 The UK

5.3.1 Market potential

5.3.2 Product comparison

5.3.3 Strategies

5.4 Spain

5.4.1 Market potential

5.4.2 Product comparison

5.4.3 Strategies

5.5 South Korea

5.5.1 Market potential

5.5.2 Product comparison

5.5.3 Strategies

5.6 Australia

5.6.1 Market potential

5.6.2 Product comparison

5.6.3 Strategies

6 Appendix

6.1 Methodology

6.2 Contact GlobalData

6.3 About GlobalData

6.4 GlobalData’s Services

6.5 Disclaimer

List of Tables

Table 1: Frequent Flyer Credit Cards – Current Development and Future Outlook

Table 2: Trip Volume in Key Markets (Million), 2010–2019

Table 3: American Express – Cards Targeted at Frequent Flyers in the UK

Table 4: Mileage Earning – SkyMiles Frequent Flyer Program 2015

Table 5: The US – Credit Cards for Frequent Flyers

Table 6: Canada – Credit Cards for Frequent Flyers

Table 7: The UK – Credit Cards for Frequent Flyers

Table 8: Spain – Credit Cards for Frequent Flyers

Table 9: South Korea – Credit Cards for Frequent Flyers

Table 10: Australia – Credit Cards for Frequent Flyers

List of Figures

Figure 1: Key Success Factors for a Frequent Flyer Credit Card Issuer

Figure 2: Comparison of Different Loyalty Models

Figure 3: Comparative Overview of Key Markets

Figure 4: Number of Seats Sold and Revenue Generated in the US, 2010–2019

Figure 5: Number of Seats Sold and Revenue Generated in Canada, 2010–2019

Figure 6: Number of Seats Sold and Revenue Generated in the UK, 2010–2019

Figure 7: Number of Seats Sold and Revenue Generated in Spain, 2010–2019

Figure 8: Number of Seats Sold and Revenue Generated in South Korea, 2010–2019

Figure 9: Number of Seats Sold and Revenue Generated in Australia, 2010–2019


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