FRANKFURT Dec 9 Germany's Lufthansa
plans to reorganise its frequent flyer programme Miles & More in
a bid to boost growth at the business, joining a trend among
airlines, some of which have spun off customer loyalty schemes.
The revamp is part of a wider restructuring of Germany's
largest airline, which aims to boost operating profit to 2.3
billion euros ($3.2 billion) and includes 3,500 job cuts, the
expansion of discount unit Germanwings, as well as outsourcing.
The Miles & More reorganisation should be completed in the
next couple of months, a spokesman for Lufthansa said on Monday,
declining to provide details.
German newspaper Frankfurter Allgemeine Zeitung (FAZ)
earlier reported the airline was planning to spin off the
frequent flyer programme, which has more than 20 million
customers, as a standalone business.
A decision could be taken in the spring and the unit, which
would report to the Passenger division, would start operation in
the second half of next year, the paper said.
The spokesman declined to comment on the possibility of
putting Miles & More into a separate unit, but said there were
no plans to sell Miles & More.
Loyalty programmes traditionally reward passengers with
money off air travel, based on the number of miles they have
flown with a particular airline.
Nowadays airlines can generate cash by selling miles and
points to other businesses like credit card and car rental
firms, which in turn use the offer of extra miles to attract
Air Canada hived off its frequent flyer programme
in 2007 while Air Berlin, Germany's second largest
airline, sold 70 percent of its Topbonus programme to Etihad
Airways for 184 million euros last year.
According to a 2012 IATA report on loyalty programmes, when
United Airlines filed for bankruptcy in 2002, the only part of
its operations that was making money was its frequent flyer
programme. It also noted Air Canada's Aeroplan raised $250
million in 2007 for just 12.5 percent of the company.
Lufthansa does not publish financial figures for Miles &
More but FAZ, citing company sources, estimated it contributed
around 700 million euros to group profit last year.
($1 = 0.7308 euros)
(Reporting by Marilyn Gerlach; Editing by Mark Potter)