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Low cost airline Norwegian has struggled, in part because of the brutally competitive low cost transaltantic market, in part because of high costs at the airline, and in part by bad luck – the grounding of hte 737 MAX, the long-term stranding of a plane in Iran, major engine retrofit work that was required for many of their aircraft.
However while just six months ago they seemed to be in a perilous situation, they do seem to have lengthened their runway quite a bit after asset sales, better third quarter financial performance and a new joint venture with China Construction Bank. I’m really rooting for Norwegian since they serve not just London from my home airport, but they’re adding an Austin – Paris flight as well.
A new move today opens up a potential additional income stream for the carrier. Synchrony bank has introduced The Norwegian Reward Card, a co-brand Norwegian Air Mastercard for the U.S. market.
- Initial bonus: $50 in CashPoints after $500 in purchases within 90 days
- Earn: 2% on Norwegian flights, dining and groceries, 1% on other spend
- Annual bonus: $100 in CashPoints after $20k spend each cardmember year (at exactly $20k spend all on groceries, this becomes a 2.5% grocery card)
- Additional benefits: Double expiration for points, priority boarding, no foreign transaction fees
Doubling the validity of points is useful. Normally a point earned is valid for the rest of the year in which it’s earned plus two years. Co-brand cardmembers have their points valid for four years instead of two years.
Copyright william87 / 123RF Stock Photo
Norwegian believes they have the critical mass now to make a U.S. co-brand work. Norwegian Reward has 10 million members worldwide, 13% of which are in the U.S.
The endorsement from Synchony is meaningful. Not only was I already of the view that Norwegian is poised to make it through winter and reach the lucrative summer travel period in 2020, but their co-brand partner has done its own due diligence and is confident moving forward launching a financial product with Norwegian’s name.
In my own view a no annual fee 2% cash back card on everything that also lets you transfer points (Citi® Double Cash Card) is the better play, and indeed the card that all cash back products have to measure themselves against.
Nonetheless I love the introduction of a new airline co-brand rewards card into the market. I asked Kristin Møllerplass, Norwegian’s Head of Loyalty and Engagement, about the possibility of a premium card with additional benefits and that seemed like something under consideration. She offered, “We would like to be relevant and cater for difference customer bases. We are paying close to attention to member feedback, as well as monitor he development in the member base. If we see that our members would appreciate a fee card, we would do our best to provide a product tailored to them.”