Star Alliance Launching Intriguing Credit Card

Star Alliance Launching Intriguing Credit Card

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Star Alliance, the world’s largest airline alliance, plans to launch a co-branded credit card. That’s something we’ve never seen before from a global airline alliance. While it sounds exciting, I’m skeptical.

Credit card will earn miles on any Star Alliance airline

Star Alliance CEO Jeffrey Goh has this week revealed that the airline is working on a co-branded credit card:

  • The credit card is expected to launch later this year
  • The credit card will let members earn miles that can then be transferred to any of the 26 airline partners
  • The credit card will initially be launched in one country, and if successful, the concept will be expanded to other countries

There are a lot of questions that are unanswered as of now, including which bank will issue the card, what the rewards structure will be like, and even what country the card will be issued in. Logically you’d think the card would be launched in the United States, given that it’s the most lucrative credit card market in the world. But who knows, maybe Star Alliance is launching in a smaller market first, to test out the concept.

You’ll be able to transfer miles to any Star Alliance program

This is creative, but will it be lucrative?

The most interesting implication here is that the Star Alliance as such will seemingly introduce some sort of a central mileage currency. Currently you can earn miles with any Star Alliance frequent flyer program for travel on any Star Alliance airline, but there hasn’t been a single currency for the Star Alliance as such.

It sounds like we should essentially expect a Star Alliance transferable points currency. Only time will tell whether the introduction of this has any other practical implications beyond the credit card (in other words, will there be any means for racking up these rewards that don’t involve credit cards?).

While this is no doubt creative, I question the extent to which this will be lucrative:

  • One benefit of picking up an airline credit card is typically that you get benefits for travel on that airline; unless the card offers Star Alliance Gold status (which is highly doubtful and impractical), a Star Alliance credit card won’t really offer much in the way of benefits
  • In the United States, frequent flyer programs are the single most profitable part of airlines, and co-branded credit card deals are a big part of that; you can bet that United won’t be down with Star Alliance having a more lucrative credit card than MileagePlus’ card portfolio
  • We already have incredibly lucrative card ecosystems, like Amex Membership Rewards and Chase Ultimate Rewards, which allow us to build a portfolio of cards and take advantage of a variety of bonus categories; this card needs to be really compelling to be able to compete with those offerings
  • If this card is launched outside the United States then the value proposition might be significantly more compelling, since there’s not as much competition (then again, with lower interchange fees, it may also be too costly to provide a lucrative rewards structure)
This card could be a good path for earning miles with Asiana

Bottom line

The Star Alliance is planning on launching a credit card later this year, with rewards that can be transferred to any of the 26 member frequent flyer programs. This is an innovative concept that we’ve never seen before from a global airline alliance, and I’m curious to see what Star Alliance comes up with.

I’m skeptical as to whether the value proposition here will be great, but this is exciting to see nonetheless.

What do you make of the Star Alliance’s plans to launch a credit card?

Conversations (23)
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  1. Rimvyd Guest

    As Star Alliance is led by Lufthansa, perhaps the first market will be Germany (and maybe also Belgium, Austria and Switzerland).
    But on the other side, Lufthansa already has own credit cards at all those markets.

  2. Ron Guest

    Would be great for LH if you could earn more than 1 mile per $ like the LH card since no other currency can transfer to them.

  3. Holger Guest

    If United would not be a part of it, it would benefit everyone. But with an US company and bank involved, they would abouse all others in the world, except there own.
    Star alliance without United, that would be so great.

    1. Eskimo Guest

      You are suggesting kicking United, a founding member, out of Star Alliance?

  4. Lu Guest

    Sounds like a good idea for markets like the UK, where no single Star Alliance carrier has a strong presence but collectively they do.

    They certainly would not undercut existing credit cards issued by member carriers - unless their end goal is to kick the carrier out of the alliance passive aggressively.

  5. Sam Guest

    This is a good idea for markets outside of the US credit card ecosystem. We have lots of choices between products & methods to rack up points. Not the case elsewhere.

  6. MJ Guest

    I wish airline alliances were more like hotel programs where I have more choices how I spend my miles and consistent program across all the carriers.

  7. Eskimo Guest

    Booking partner airlines is already complicated. Making transferrable points is just adding another layer of complication. Not to mention having disparity between miles from different airlines.

    If this card were to materialize, I would imagine a fixed point redemption would be the answer. So it could either be 10k points gets you 1-750 miles or 10k points is $100 off any ticket. Either way must be booked through some broken booking platform.

    And we still...

    Booking partner airlines is already complicated. Making transferrable points is just adding another layer of complication. Not to mention having disparity between miles from different airlines.

    If this card were to materialize, I would imagine a fixed point redemption would be the answer. So it could either be 10k points gets you 1-750 miles or 10k points is $100 off any ticket. Either way must be booked through some broken booking platform.

    And we still haven't discuss card benefits. Giving Star Alliance Silver benefits probably wouldn't attract anyone at all. Giving perks that would be similar to Star Alliance Gold would cannibalize the incentive to earn over just paying for it. That wouldn't make member airlines happy.

  8. Samo Guest

    This could potentially be cool for people residing in a country without Star Alliance base - I live 40 minutes drive from LH Group hub but can't get airline credit card because it's across a line on the map. I understand how it may be inefficient for individual airlines to deal with these smaller markets and doing it on alliance-level could solve this issue. Ideally, SA could partner with one of the pan-European banks (e.g....

    This could potentially be cool for people residing in a country without Star Alliance base - I live 40 minutes drive from LH Group hub but can't get airline credit card because it's across a line on the map. I understand how it may be inefficient for individual airlines to deal with these smaller markets and doing it on alliance-level could solve this issue. Ideally, SA could partner with one of the pan-European banks (e.g. N26) to cover the entire European market rather than individual member states only.

  9. Rav Guest

    Don't knock it before you try it..Yes there are Americans that see no further than their own border. Lots of them unfortunately. This from an American himself.

  10. DCAWABN Guest

    Wasn't it also *A that promised an airline agnostic (or all-inclusive) awards booking tool? What ever happened to that vaporware.

  11. Andrew Diamond

    I mean, this sounds good, but in reality doesn't add much value. The whole point of alliances is this "transfer to a *A partner" isn't necessary. If you move miles to LifeMiles or AC, you can redeem on most anything.

    The only reason this would matter is if LH or SQ first redemptions are on your 'to do' list, but even then there are solutions now from cards or the banks.

    1. ConcordeBoy Diamond

      "The whole point of alliances is this "transfer to a *A partner" isn't necessary."

      That's a statement by someone who clearly hasn't had the face the difference in what "should be" versus what '"is," in terms of redemption.

      Case in point: try to get a roundtrip Business redemption on LAX/EWR-SIN using UA miles, on anything even approaching a realistic inbound/outbound schedule.... let us know how easily that happens.

  12. Tom Guest

    u are being naive, the banks/airlines won't allow something that will cannibalize the exisiting products. More likely we see something like Redeem your 20k *A points for a $250 towards a ticket on any Star Airline.
    Likely one of the smaller players like Synchorny or Cardless

  13. RF Diamond

    A alliance transferable points system would be very cool but earning 1x or gasp. .5x is crap.

  14. Brad B Member

    Wouldn't it just make more sense to synchronize mileage earning all Star Alliance partners and then require partners to have the same award space open to partners as to its own members. LH is notorious for offering saver fares to it's members months in advance then (even with a half full cabin) opening space a few days prior to departure.

  15. M. Casey Guest

    I could include Lounge Access

  16. SEM Member

    I can only imagine how many times in the T&C we will see:
    *Does not apply to SQ
    **Does not apply to SQ
    ***Does not apply to SQ
    ...
    ...
    ...

  17. Pete Diamond

    If this allows miles and more transfers then I’m in, but I doubt it.

  18. Sir Digby Chicken Caesar Guest

    Maybe, just maybe, a global airline alliance has figured out that 96% of the world’s population isn’t American, and is making something credit-card-related for them?

    1. Eve Guest

      Very unlikely. Rest of the world will still get mediocre benefit cards while still paying the same amount of fees as the american version, i.e. Amex, whose Platinum benefits are ridiculous cut down around the world when compared to US, but still charging the same fees, if not more in some markets

    2. tipsyinmadras Diamond

      The rest of the world has limits on credit card transaction fees making them far less lucrative than in the US where they’re free to charge a lot more.

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Sir Digby Chicken Caesar Guest

Maybe, just maybe, a global airline alliance has figured out that 96% of the world’s population isn’t American, and is making something credit-card-related for them?

3
Eve Guest

Very unlikely. Rest of the world will still get mediocre benefit cards while still paying the same amount of fees as the american version, i.e. Amex, whose Platinum benefits are ridiculous cut down around the world when compared to US, but still charging the same fees, if not more in some markets

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Tom Guest

u are being naive, the banks/airlines won't allow something that will cannibalize the exisiting products. More likely we see something like Redeem your 20k *A points for a $250 towards a ticket on any Star Airline. Likely one of the smaller players like Synchorny or Cardless

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