Lufthansa to Spin Off Mileage Program

Lufthansa confirmed long-simmering rumors that it was planning to spin off its Miles & More frequent-flyer program.

According to the airline’s press release, “The Miles & More bonus programme is to be even more successful in its own company and will become more attractive for customers through additional programme partners. Revenue and profit should grow at a constant level in the coming years.”

The move must be approved by Lufthansa’s shareholders, who will vote on the matter at the company’s annual meeting on April 29.

There are precedents for Lufthansa’s move, including Air Canada’s 2007 spin off of its Aeroplan program, and Air Berlin’s 2012 sale of a 70 percent stake in its Topbonus program to Etihad Airways.

In the case of Aeroplan, the program’s independence from the airline marked a decided shift from a more traditional travel-loyalty program to a frequent-buyer program. That change in focus hasn’t been welcomed by frequent flyers. In a 2013 survey conducted by Frequent Business Traveler and FlyerTalk, Aeroplan had the highest level of dissatisfaction (67.8 percent) among 12 major airline programs.

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There’s no doubt that financial and organizational considerations will eventually result in the spin offs of one or more U.S. airline programs. United was rumored to be on the verge of such a move when the most recent recession intervened, keeping the airline from following through. If the experience of Aeroplan members is any indication, frequent flyers in the U.S. should be hoping that any program spin offs happen later rather than sooner.

Reader Reality Check

Are independent loyalty programs good or bad for frequent flyers?

This article originally appeared on FrequentFlier.com.
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