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Credit-Card Firms Slug it Out for Frequent Flyers

With the year-end travelling season nearly here, credit-card companies are battling to woo card holders to spend with them to earn frequent-flyer points for free airline tickets.

Industry watchers say card holders are spoilt for choice and are becoming more choosy about getting the airline they want. And the card companies are only too aware that frequent flyers are often very affluent, and likely to be big spenders, they said.Cranking up the competition, American Express (Amex) launched a 'win a free flight every day' promotion earlier this month for its Amex Singapore Airlines (SIA) KrisFlyer Gold credit-card holders, which runs till the end of the year.

To sweeten the offer, it is also giving away a grand year-end lucky-draw prize of a pair of Raffles Class tickets on SIA's non-stop flight to New York. This comes immediately after Citibank ended its promotion last month in which card holders could, from May this year, earn six times the usual number of Asia Miles for every dollar charged to their Citibank Cathay Pacific Platinum Visa card. Business consultant Matthew Shaw, 35, finds the Amex KrisFlyer card hard to resist because he prefers flying on SIA. He travels 10 times a year on business to the United States and Australia. The Australian, who moved to Singapore three years ago, typically charges up to $120,000 a year to his Amex KrisFlyer card and redeems about six free air tickets for his family to holiday spots such as Bali, Phuket and Langkawi.

Another frequent flyer, Mr Patrick Kwok, an art dealer who holds a Citibank airline co-brand card, accumulates enough points to redeem a long-haul flight for his family of four once a year. He has been flying with Cathay Pacific for more than 20 years because he is impressed with its service and of the frequent upgrades he enjoys as a Marco Polo Club member. Citibank's business director and head of credit cards, Mr Yuen Kum Fai, said: 'Frequent flyers are getting more sophisticated and seek greater value when they charge to their credit cards.

'They want a card that ties up with an airline with a good regional presence and rewards their spending accordingly.' He said Citibank is on track to hit its two-year target of getting 10,000 new customers for its airline co-brand Platinum card.Card companies are also tapping on the expenditure of these big spenders. Said Amex vice-president and country manager Atul Mathur: 'Our card members spend four times more on their Amex-KrisFlyer card than the industry average. 'With our new offer, there is no doubt they will be incentivised to spend more.' Mr Mathur says Amex has signed up 'thousands of new customers and billing growth has increased by nearly 70 per cent' since the start of the year.

With Amex and Citibank tying up with two of the more popular frequent-flyer programmes, banking sources say other banks may be driven to do the same with low-fare carriers Tiger Airways or Valuair. United Overseas Bank had said earlier this year that it was exploring opportunities to tie up with an airline.

DBS, which launched its co-brand credit card with AirAsia in April, says that customer feedback showed an increased interest in regional flights with budget carriers, through some form of loyalty programme. A DBS spokesman, Mr Ronald Chong, said the DBS AirAsia card, in offering rebates, differs from other traditional co-brand airline cards.Participating merchants give a rebate of up to 25 per cent on purchases which can then be converted into Air- Asia dollars and used to redeem AirAsia flights, among other items.

Singapore 27/09/2004