Air Berlin has established its loyalty programme as a separate company, and sold 70 per cent of the business to Etihad Airways, with plans to “strengthen the existing partnership between Etihad Guest and Topbonus”.
The move will see the Topbonus programme partnering with PointsPay, an app allowing points and miles to be exchanged for cash. Etihad Guest was the first loyalty scheme to sign up to the PointsPay programme.
The value of the transaction is €200 million, consisting of a cash injection of €50 million, and debt financing of €150 million, with Air Berlin receiving €184 million as part of the transaction.
Etihad Airways said that the purchase was “the first step in the establishment of a global loyalty management platform”, with “a critical mass of valuable, high-spending consumers”.
Announcing the acquisition Etihad’s president and CEO James Hogan said:
“This new investment creates an excellent growth opportunity for us to capitalise on the loyalty management market, while offering a greater range of benefits to passengers from multiple partner airlines.
“The acquisition of a stake in the new Topbonus company is part of our strategic evolution to create a ‘house of brands’ loyalty management company, with global scale.
“The loyalty programme sector is a faster growing and higher margin business than the airline industry. This new approach allows both our companies to reap greater rewards together, with opportunities to generate sustained profits from our loyalty programmes.
“The new company also provides an attractive vehicle for other airlines looking to generate further revenues from the fast-growing loyalty management sector.”
Etihad owns a 29.21 per cent stake in Air Berlin, and the two airlines have launched reciprocal earn and burn benefits on each other’s frequent flyer programmes (see online news December 19, 2011).
The carriers have also announced that in the first year since the alliance was established, it has “allowed the carriers to deliver more than 300,000 passengers onto each other’s networks and collectively generated more than €100 million in additional revenues, far outstripping the initial estimates”.
Report by Mark Caswell