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Star Alliance is finally launching its credit card …. in Australia

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Back in May, Star Alliance – the grouping of 26 airlines which includes Lufthansa, SWISS, Austrian, United, Singapore and Thai amongst others – announced innovative plans for an alliance-wide credit card.

We thought that the UK would be ideal place to try it, because this is a country where many Star Alliance carriers fly but where none have a home base. There are also no Star Alliance airlines with their own co-brand card here.

We were wrong, however …. the Star Alliance credit card is launching in Australia.

Star Alliance credit card launcing in Australia

You have to give Star Alliance credit here, because this is a very novel product which must have been hugely complex to put together. Whether it is worth getting is a different question.

Singapore Airlines let the cat out of the bag by posting a link to the new HSBC Star Alliance credit card on its website, although it has now been removed:

Star Alliance credit card Australia

Australia has interchange fee caps, so Europe could copy this

What is interesting about launching this card in Australia is that, like Europe, there are strict caps in place on credit card interchange fees.

Australia is slightly more lenient than Europe in terms of what card issuers can charge, but it is still just a fraction of what is available in other markets. This means that, if the card works in Australia, it is a model that could be rolled out to Europe.

Smartly, because the interchange fee cap restricts the pot that is available for ‘buying’ reward miles, there is a strong focus on status benefits.

What will the Australian Star Alliance credit card offer?

  • The annual fee will be A$450 (£250) but the first year is free
  • It will be a Visa card issued by HSBC
  • There does not appear to be a sign-up bonus of points but ….
  • You will get Star Alliance Gold status when you spend A$4,000 (£2,250) in your first year. Whilst the Singapore Airlines website talks about giving you this in its KrisFlyer programme, it isn’t clear if you can choose between Star Alliance programmes.
Star Alliance credit card Australia
  • You will renew your Star Alliance Gold status in future years if you spend A$60,000 (£34,000) per year. Those who already have Star Gold can take 40,000 bonus points instead.
  • You will earn 1 Star Alliance point per A$1 (55p) on your first A$3,000 of monthly spend, dropping to 0.5 miles per A$1 beyond that
  • You can credit the points to any Star Alliance programme. It isn’t clear how often you can change your nominated scheme.
  • The transfer rate is NOT 1:1. For Singapore Airlines KrisFlyer, it will be 1 Star Alliance point to 0.8 KrisFlyer miles. This will presumably lead to interesting arbitrage opportunities.

What is interesting about the choice of Australia is that it is not exactly a hot bed of Star Alliance activity. Apart from Singapore Airlines and Air New Zealand, I’m not sure that there is a whole lot going on. This is why I always assumed that the United Kingdom would be the launch market as the majority of Star Alliance carriers do fly here.

As a first year offering I think this looks pretty strong. There is no fee in Year 1, and for spending just £2,250 you will have top tier Gold status across Star Alliance, which includes full lounge access. You would probably be able to leverage this, through status matches, to top tier matches with other airlines.

Would this card work in the UK?

Potentially, yes.

Our article on how you can currently earn Star Alliance miles from UK credit cards is here.

I have, for many years, been advocating for an increased focus on status benefits from loyalty credit cards.

As well as making financial sense for issuers, given the cap on interchange fees, it also reflects the fact that miles and points are relatively easy to pick up these days. Earning 1,000 – 2,000 miles per month from a credit card does not necessarily move the needle much, but status is a different matter.

(I have become very fond of my Marriott Bonvoy American Express card. The 15 elite nights it gives each year mean that I retain Platinum status with 35 nights, which is manageable, instead of 50 nights, which realistically isn’t. They also count towards lifetime status. Throw in the regular Amex cashback offers at Marriott hotels, which are better than those offered on other Amex cards, and the £75 annual fee is money well spent.)

Are there a lot of people in the UK willing to pay £250 per year for a credit card which gives them Star Alliance Gold status for spending £34,000 per year? There aren’t 100,000 of them, no.

However I think it would attract a following and – importantly – those people would be inclined to move more travel to Star Alliance once they had their Gold status. This extra carrot would allow the credit card to operate at breakeven or even lose money if the alliance felt it would benefit from extra flight bookings.

I can imagine British Airways getting very nervous if Star Alliance started dishing out Gold cards after just £2,250 of spend in your first year, especially if there was no card fee in Year 1. Because there are four Star Alliance business class lounges in Heathrow Terminal 2, it wouldn’t necessarily lead to massive overcrowding either.

HSBC would also be a suitable potential issuer in the UK. It already has the IT required to handle miles and points transfers for its HSBC Premier credit cards, and it would not necessarily cannibalise its existing £195 HSBC Premier World Elite credit card. Let’s see what happens.

PS. We have a broader article which looks at the most suitable Star Alliance frequent flyer programme if you live in the UK, which you can read here.

Category

Lufthansa and Miles & More, United Airlines and MileagePlus

Comments (71)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Jan M says:
    11 Nov11 November 05:53

    A pity Star Alliance in Europe is dominated by Lufthansa, such a terrible airline. They never even replied to my request for flight compensation I submitted in August.

    • JFSV says:
      11 Nov11 November 07:07

      Aside from how terrible they are (they definitely have quite a few improvement areas in my view), they do typically reply to this sort of issues. I would suggest that you resend the original claim or call to follow up. I had recently a claim for EC-261compensation (I submitted by post) which they handled fairly quickly, incl. the related payment. Granted that it is a pain to have to follow up, though…

    • Richie says:
      11 Nov11 November 07:58

      They know how to save money.

    • Harry T says:
      11 Nov11 November 08:11

      Take them to court!

      • His Holyness says:
        11 Nov11 November 09:19

        JDB will be along to say UK courts don’t have jurisdiction…

        • JDB says:
          11 Nov11 November 09:40

          @His Holyness thank you for the mention. Each case is quite specific and thus has different preferred/possible escalation routes.

          My objection is those who give identical advice irrespective of the facts (which they often appear not to have read either) which is beyond unhelpful, but clearly that is the sort of advice you prefer. Duly noted.

    • Vit says:
      11 Nov11 November 08:24

      I used Resolver to get my compensation more than a few year back. Maybe give it a try. Pretty easy to use and it is free.

    • M says:
      11 Nov11 November 08:42

      +1 Lufthansa is a terrible Airline

    • RussellH says:
      11 Nov11 November 09:06

      I had no problems at all getting some €1000,- compensation for a major flight delay FRA-Hong Kong at Chinese New Year in 2019. Money in my German Bank within 10 days of submitting the claim

      Service at FRA getting re-booked was exemplary too. I made a note of the agent’s name and told Lufthansa just how well she had done as part of the claim. She managed to re-book us via Singapore, but if that had not worked would have put us on a Cathay Pacific flight the following morning (so not even Star All.)

    • dougzz99 says:
      11 Nov11 November 09:10

      Does anyone really find that much difference between BA/KLM/AF/LH? They’re all fine until they’re not.

      • Lady London says:
        11 Nov11 November 10:05

        +1
        Lufthansa isn’t that bad. True, with the seeming support of the German government and German States they do get away with a few flakies, such as simply shutting up shop and refusing to deal with EU261 claims in Covid, as well as at other times… but actually Lufthansa isn’tn that bad.

        Plus they don’t seem to hire cabin crew just on fresh young looks and a willing attitude but less skill…miaow…competence gets my vote, YMMV

      • Fil says:
        11 Nov11 November 10:43

        For over 20 years I was flying mainly Star Alliance (LH, LOT, Swiss). 2 years ago I tried Flying Blue (KLM, AF). I see significant difference and moved all business there.

      • Oliver says:
        11 Nov11 November 14:18

        We flew Air France a few times this year, even economy long haul has free message WiFi and champagne, short haul has drinks and snacks. Definitely feel better than BA, and they don’t charge for business class seats. We will move to flying blue.

        • His Holyness says:
          12 Nov12 November 17:44

          Flying Blue led the way in the worst frequent flyer programmes in Europe, M&M followed and then BA. Redemptions are dreadful and only the AF lounges in CDG are good. FB also has tight routes on access when on domestic itineraries per ST standard.
          AF can give back rubs and a bottle of plonk to every pax but it doesn’t make me forget the hundreds of people who’ve died on Air France aircraft in the past few decades due to crew error. Those errors haven’t stopped in recent years. Check AVHerald…”loss of reference”, “descended below minimum safe altitude”, its eye-opening and it is still happening.

  • TripleB says:
    11 Nov11 November 06:12

    United, air canada, all Nippon, Eva air, air China and Thai also fly to australia

    • TripleB says:
      11 Nov11 November 06:12

      And air India.
      South African haven’t come back after covid.

    • Michael Jennings says:
      11 Nov11 November 09:27

      United is the big one. They fly more flights from Australia to the US than any other airline, including Qantas.

  • Ian says:
    11 Nov11 November 06:46

    As Jim Bowen used to say ‘Look what you could’ve won’…..

  • Phil J says:
    11 Nov11 November 07:13

    Status, whilst nice (and now growing in importance thanks to the bonuses with revenue based programs), is not always the biggest driver (if you tend to travel up front anyway). I would imagine for a number of us in the provinces this card would be a big driver in terms of a balanced portfolio and the prevention of mile expiry.

  • Lev441 says:
    11 Nov11 November 08:00

    This would be a card I’d not even have to think twice about….

    It’s a decent earning rate for a Visa card, and I would divert my spend from avios and BA which after the latest ludicrous taxes/fees increases I’m struggling to use (aside from RFS). Pretty sure most the star alliance airlines don’t charge anywhere near as much…

    In America I think the Virgin Atlantic card gives tier points on monthly spend up until a certain point, so not sure this is a world first, but would be great to see something along either of these lines in the UK.

    • Rob says:
      11 Nov11 November 08:26

      Iberia gives Bronze equivalent status with one of its Spanish cards.

      • Jonathan says:
        11 Nov11 November 09:10

        It’s weird that no UK credit (or charge card offers airline status, apart from Amex Centurion, but that has very steep joining and annual fees.

        Any card that offered this for UK customers would get people using it without any issue

        There are people here who happily admit to taking holidays with the primary intention of collecting tier points

      • ECR says:
        11 Nov11 November 14:16

        Bronze gives very little in the way of incentives on BA. Free seat selection 7 days out, group 3 boarding, and a few more avios. I doubt many people who are concerned about getting a particular seat and would otherwise pay will wait until 7 days before. The only real cost would be the extra avios, and when BA move to the revenue based model this will be minimal.

        I think it would make sense for BA to offer bronze on a fee based credit card, as although the benefits are slim they might be just enough to tip the balance into someone booking with BA rather than a competitor.

        I think though, much as I would love a UK credit card with meaningful airline status, the costs of offering Silver or above i.e. lounge access, fast track, lost seating fees through offering free seat selection or even people not needing to book as many flights with BA to retain status would make it unattractive to the airline.

      • Dubious says:
        11 Nov11 November 15:13

        There is also the Singapore Airlines’ Co-Branded Amex in Singapore that comes with KrisFlyer Gold (= StarAlliance Gold) in the first year – if spending ‘above S$15,000 on eligible purchases made on singaporeair.com within the first 12 months upon Card approval’.

        In that sense the concept is not too dissimilar to this new Australian card.

      • Scandies says:
        11 Nov11 November 17:04

        SAS gives Silver status (BA bronze equivalent) for Amex Elite members in the form of 20k status points. Only 45k is needed in total for Star Alliance Gold so pretty good deal if you have some flights as well. Can be combined with a Mastercard providing 12k points more which reduces the way to gold even further.

  • Numpty says:
    11 Nov11 November 08:09

    a Oneworld credit card would probably be too difficult, but changing the BAPP Amex to an IAG PP Amex with 241 voucher would be nice! Throw in Qatar Airways at the same time.

    • Jonathan says:
      11 Nov11 November 09:05

      I think many of us want a change from Avios !

      They keep getting heavily devalued…

  • John says:
    11 Nov11 November 08:19

    Considering that a lot of places in Australia charge 1% or more to use a credit card (and sometimes even debit cards if it goes through visa/mc), earning 0.5 miles per $ isn’t great.

    • Lady London says:
      11 Nov11 November 10:09

      So is it about attracting cardholders who spend OPM to fly? ie corporate road warriors

    • QFFlyer says:
      14 Nov14 November 12:19

      I wouldn’t say a lot, some places do. The interchange cap is 0.8%, so they shouldn’t but they do. And 0.5 miles per dollar isn’t the maximum by any means, sure if you have a basic card with no or a low annual fee, but 1 mile per $1 is easy to achieve, and the major retailers don’t charge any fees for CCs (supermarkets, petrol stations, Bunnings, Kmart, Target, Officeworks, etc.).

      The big ones which do are hotels (almost universally) and airlines, but there are ways to minimise these.

  • Comrade says:
    11 Nov11 November 09:02

    How much someone would pay for *G? I can gift one!

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