Loyalty programs are big business for airlines. But going it alone does not always work, especially for smaller carriers in markets where credit card partnerships are not especially profitable. Norwegian, now squarely focused on its European operations, will shift its Norwegian Rewards program to a coalition model, bringing in Strawberry Hotels, with potential for other partners in the future.
I am very pleased to have found Strawberry as a partner and that by joining forces, we are developing a new platform which will give even more customers the opportunity to choose from a broader selection of services.
– Geir Karlsen, CEO of Norwegian
Under the proposed program consumers from both Norwegian and Strawberry (formerly Nordic Choice Hotels) will be able to both earn and redeem with either company. The common currency will cover approximately 7.5 million members in the Nordic countries when it launches.
That the companies are not offering any further details, like a timeline or even program name, is somewhat bizarre. But it is happening. Eventually.
Easy earn and burn
Given the relatively straightforward revenue-based earn and burn approach from both companies, there’s not too much creativity required to integrate the programs. And adding additional partners becomes relatively straightforward as well. That’s good news for operating the program, though it raises questions about the longer-term value proposition of the offering.
The simple economics lead to running more of a rebate offering than providing outsized value for loyalty. That’s not necessarily a bad thing, but it makes selling consumers on committing to the participating companies challenging.
AirBaltic tried a similar approach with the PINS program last decade. Ultimately that program folded back into airBaltic Club, which has further pivoted in recent years.
The combined earning and redemption arrangement also can create complications around elite status and benefits within the program. Norwegian revamped its program in February, particularly around elite benefits. The goal there was to attract more business travelers within the Nordic region. Changing the program again so soon, and with unclear benefits for the more frequent fliers, could backfire if it creates too much confusion for program members.
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