Through their promotion offering new holders of the British Airways Visa Signature card the opportunity to earn up to 100,000 miles, JPMorgan Chase & Co. and British Airways are hoping to increase loyalty among international travelers, according to Chase.
“We try and get lifelong-passionate travelers to open the British Airways card,” Ralph Darmo, Chase marketing director for the British Airways portfolio, tells PaymentsSource. “We essentially want consumers to carry the card for a long time.”
Moreover, the promotion creates awareness, as many consumers do not know about the program because British Airways is not a domestic airline, Darmo says. “So we have to offer promotions such as free miles to gain consumer awareness so consumers see the competitive value proposition of the card,” he says.
This type of card is enticing for consumers who travel, but Chase and other issuers should ensure their programs are “robust enough so consumers keep the card for many years and not just get another one with another issuer when a similar promotion pops up,” says Brian Riley, research director of bank cards at Needham, Mass.-based TowerGroup.
The Chase card promotion enables new cardholders to receive 50,000 bonus British Airways miles after their first purchase and an additional 50,000 after spending $2,500 in the first three months of receiving the card if they open an account by May 6. They also receive points through ongoing use of the card (
The card carries a $95 annual fee but imposes no foreign-transaction fees, and the two companies may extend the promotion if consumer response is high, Darmo says.
The free miles are beneficial to international travelers because 100,000 miles is equivalent to two transatlantic roundtrip flights to Europe, Darmo says. Cardholders also may use the miles to upgrade from different classes. For example, for 25,000 miles, consumers may upgrade from premium coach to business class, Darmo explains.
Additionally, consumers who typically fly domestically also may benefit from the promotion. British Airways’ partner airline in the U.S. is American Airlines, Darmo notes. “So consumers may cash in the miles and get up to four round trip domestic flights,” he says.
This promotion is “an amazing deal and eclipses any other deal other airline credit cards are offering,” says Bill McCracken, the chief executive of Atlanta-based Synergistics Research Corp. Though British Airways may not be a popular airline among U.S. consumers, “cardholders wishing to take a European trip will get more bang for their buck from this card,” McCracken notes.
Because the deal is so good, it will be interesting to see how issuers of other airline-mileage cards react and whether they come up with something similar, he says.
What do you think about this? Send us your feedback.
