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Will the Star Alliance credit card come to the UK? I chat with CEO Theo Panagiotoulias

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On Thursday I was in Paris for the opening of the new Star Alliance non-Schengen lounge in Charles de Gaulle Airport. It is the seventh Star Alliance-branded lounge to open and all of the senior team were present, including Star Alliance CEO Theo Panagiotoulias.

I was able to get time with Theo to ask him about the new Star Alliance credit card which is coming up to its first birthday in its launch market, Australia.

UK star alliance credit card

The Star Alliance credit card in Australia is the first airline alliance co-brand credit card to be issued worldwide. It is of particular interest to us in the UK because both United Airlines and Lufthansa have pulled out of the UK card market in the past five years (and earlier, of course, BMI was acquired by British Airways) leaving a major gap in the market.

It is no longer possible to earn points with a Star Alliance airline directly from UK credit card spend. The only options ‘open to all’ are transferring Amex Membership Rewards points to Singapore Airlines (SAS has already announced it will be leaving Star Alliance and joining SkyTeam) or via a transfer from the Marriott Bonvoy American Express card. HSBC Premier World Elite Mastercard holders can, oddly, transfer points to TAP Portugal but their reward chart is not attractive.

We have long argued that the UK is the perfect market for such a card, with virtually all Star Alliance airlines operating flights here. With no ‘home’ airline, such a card would also avoid competing against its own airline members – no doubt one of the reasons it launched in Australia, too.

Under a partnership with HSBC and Visa, the Australian card comes with a A$450/£250 annual fee (waived in the first year) and the ability to earn Star Alliance points which you can convert to one of seven different Star Alliance loyalty programmes. The big carrot, however, is the ability to fast-track yourself to top-tier Gold status if you spend A$4,000 within 90 days.

UK Star Alliance credit card

I asked Theo how the card is going and whether they had plans to roll it out in more countries. Whilst he wouldn’t be drawn on any future roll out, he did say:

“We’re really pleased with what’s going on in Australia so far. We are definitely looking at other markets, but I can’t share any further information on which ones they are. Based on what we’ve experienced in Australia, it’s been a very worthwhile investment. We’ll continue watching that and determining when the right time is to introduce it into other countries. But we are certainly looking at it very seriously.”

Australia has similar interchange fee caps to the UK and Europe, making it an excellent test bed to stress-test the financial model of the card. I asked him if he saw the Australian card as the model for future rollout or whether they would customise the offer to individual countries:

“By and large, I think it would be similar. We want to look at it a little bit more, because different markets have got different intricacies: you don’t want to apply something generally. From what I’ve seen, it’s worked pretty well so far. So I think it will stay intact and we will just fine tune it, but it will depend on the market.”

What’s the value in launching a Star Alliance card in the first place?

“It’s largely driven around marketing and making sure the travelling public understands how significant Star Alliance is in that market. We’ve got some very important carriers that serve Australia. So it’s really an awareness driver, as well as recognition and incentivising passengers to take advantage of this.”

At the moment, only seven Star Alliance airlines have joined the Australian card programme: Air Canada, Air New Zealand, EVA Air, Singapore Airlines, South African Airways, Thai Airways and United Airlines. There are many more airlines in the alliance, including many smaller ones, but at least for now Lufthansa and the other Miles & More airlines are notably absent.

“I would love to see more and more airlines join, but I think we’re all realistic and practical. We should be introducing products and services that benefit a specific market that sometimes don’t require all 26 members. I don’t think there’s anything wrong with that. If we if we restrict ourselves to only doing products for all 26 members we’d be missing out on important opportunities.

It’s not a bad thing. Different markets have got different focus points for various carriers and I think the carriers that are part of that in Australia are pretty relevant and important carriers with a presence in the Australian market.”

Should a similar card launch in the UK, it would be paramount to get Miles & More onboard. Across the group (Lufthansa, SWISS, Austrian etc) they fly more frequencies to the UK than any other Star Alliance airline, including to more regional destinations. Such a card would be hugely beneficial to those beyond London who fly from one of Lufthansa’s 13 UK airports and connect onwards via Frankfurt or Munich.

Those who had the (now closed) UK Miles & More card will know that Lufthansa keeps extending the expiry date of the miles that were accrued on the card …. a sign that it wants to keep the goodwill of previous cardholders for a future launch. We will see.

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Comments (61)

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

  • BJ says:
    16 Oct16 October 06:25

    I disagree that providing top/any tier status for a credit card is a big carrot. On the contrary I think such a strategy is dumb, forever rendering such a card to ultra-niche status, especially where the annual fee is high. The bottom line is that a *A card in the UK is destined to be niche regardless if the package offered and marketing success, why make it ultra-niche by adding a benefit at high cost that most of that niche market will not need? Sure it will look good in the first year if there’s no fee but it’ll be dumped wholesale by the second year and simply be a dud. It would be far more successful were it to offer a decent points SUB in the first year, and smaller bonuses in subsequent years in return for reaching various spend thresholds like amex Gold. This is nou to say that some would not value the tier status, they would but the pool is very small. For example I mostly fly business and fon’t fly often enough so fon’t really need or value tier status, others will be similar or have their own reasons. Ultimately the problem with most loyalty credit cards is the one size fits all mentality. Take this one for example, were it to launch here then why not give customers a choice of rewards such as status, points bonus or perhaps a system-wide upgrade voucher of some sort?

    • BBbetter says:
      16 Oct16 October 07:43

      Why would they compete with Amex gold?
      Did you read the article written by Rob linked above? The whole point is not to sell miles, but to drive more cash sales to * alliance flights.
      If cardholders like the benefits of Star gold in the first year, they’ll push more cash spending towards Star alliance.
      The real question is if they got the spending thresholds right. £30k to retain gold is a bit too high.

      • BJ says:
        16 Oct16 October 08:18

        It’s nothing to do with competing with amex, it’s about getting the benefits right to attract customers to make the card a success. I don’t think tier status will be right for most, I think more would prefer points or upgrade vouchers. If this card launches here and the only benefit is status and earn per £ then I will not apply which would be disappointing to me because I would like a *A card. They could broaden the appeal by offering a choice of benefit.

        • Mike says:
          16 Oct16 October 16:08

          Since people do “pointless” tier point runs to gain status, what makes you think status isn’t desirable?

          • BJ says:
            16 Oct16 October 17:31

            I didn’t, I said I think it would be less successful in driving credit card uptake than bonus points or upgrade vouhers.

  • David Cohen says:
    16 Oct16 October 07:22

    Since the demise of BMI, Star Alliance is in a sort of no-mans land in the UK. The LH Group is the largest carrier at Heathrow after British Airways; United has 24+ flights a day; Air Canada and Turkish are significant players; Singapore and ANA cover the far east.

    Yet the lack of a credit card, particularly for United is in IMHO the Achilles heel if they want to properly compete against BA. MileagePlus is completely centred on their US-only credit cards. As such the points are worthless if you’re solely earning via flying.

    I guess United have made a calculation that they’re more concerned with US-based folk, than they are with the UK-based which is why I am somewhat surprised by all the HfP coverage on them.

    • Andrew. says:
      16 Oct16 October 09:38

      At least with United you can credit your flight to Aer Lingus, then transfer the Avios to BA.

    • Joe says:
      16 Oct16 October 12:28

      I think united is in bed with chase in the US, so as they expand here, hopefully we’ll see something. I’d value a ba pp competitor with something like united.

  • Alan says:
    16 Oct16 October 07:25

    Certainly handy to know they’ve got it working at Aussie-level interchange fees. If these limit how much they’re able to offer earnings-wise then status is a decent addition and I’d certainly find it potentially useful, esp when flying United within the US where even flying domestic F doesn’t get you lounge access.

    • JDB says:
      16 Oct16 October 07:38

      It works in Australia because the customer pays a credit card fee directly to the merchant for virtually every transaction.

      • LittleNick says:
        16 Oct16 October 07:43

        Does that not put people off using a credit card in Australia?

        • Rob says:
          16 Oct16 October 07:50

          How old are you?! This is what happened in the UK until fairly recently when it was banned.

        • John says:
          16 Oct16 October 09:18

          I have just moved to Australia and it seems like most people happily pay card fees, which differ with every merchant who chooses to pass them on.

          Just like many UK people (including some on here) happily pay the 3% Amex forex fee.

          In general it’s restaurants, takeaways and cafes in Australia which charge fees (and the government! Cheaper to pay for my driving licence by cash than card) Most shops don’t. ALDI seems to be the only supermarket which charges a card fee, but you can avoid it on local debit cards by entering your PIN rather than contactless.

          Also if the card rewards exceed the fee it may make sense to pay it.

          • Charles Martel says:
            17 Oct17 October 01:02

            Similar in New Zealand, you seem to get a filthy look when offering to pay cash to avoid the EFTPOS fee.

      • BBbetter says:
        16 Oct16 October 07:46

        Which is why am surprised Rhys keeps saying it’s similar to UK market.

      • louie says:
        16 Oct16 October 08:06

        That is a huge exaggeration. I’d guess 90% – 95% of the transactions I make (both by value and number) do not attract a fee (I live in Australia).

        I’ve just done a road trip lasting 9 nights, staying mostly in smaller independent places. Not one charged a card fee, it’s mainly the international chains that do. Nor do I pay fees at supermarkets, fuel stations, buying clothes, furniture etc. The main occasion I’d half expect to be charged a fee would be in restaurants or cafes, but even then I doubt if it is more than 50% of such places. Maybe tourists pay more fees because of the nature of their expenditure, but the average Aussie – at whom this card is obviously aimed – does not.

        One of the main differences between the UK and Australian (Amex) cards is that they are mostly effectively free — hubby and I have different cards, his costs I think $195, mine $395 but he gets $200 and I get $400 of Amex Travel credit per annum. I did think about the Star Alliance card but once you factor in the effective loss of that benefit, I decided against. Well, that and because we are already SQ Gold by transferring Amex AU points to SQ.

        • Alan says:
          20 Oct20 October 10:35

          Interesting – that was certainly my impression when I was there in Jan, I don’t remember having to pay a fee for any of my card usage.

  • Richie says:
    16 Oct16 October 07:56

    I’m interested in an AF A220 flight review.

    • BJ says:
      16 Oct16 October 08:28

      A220s are super, nicer to fly than a320 and 737 series. Quieter, better seat configuration, and bigger overhead bins or so it seemed to me.

      • Vit says:
        16 Oct16 October 08:36

        Agreed. Did a couple time with AC (~3 hours flight) and like it more than those mentioned above.

    • Rhys says:
      16 Oct16 October 09:05

      They’re fantastic. Keep meaning to do one but the circumstances haven’t been ideal (busy flights etc) which make it difficult to do.

      • Mikeact says:
        16 Oct16 October 10:04

        Just why are these OT comments never posted in the correct forum ? Very annoying and why don’t the mod’s remove them to where they should go ?

      • Richie says:
        16 Oct16 October 11:22

        Thanks BJ, Vit and Rhys. I’ll have to decide between AMS, CDG, GVA, RIX or ZRH.

        • BJ says:
          16 Oct16 October 13:03

          I’d take Riga from those. It would give you more time to enjoy the experience and you’re more likely to get equipment swaps on other routes mentioned.

  • Mikeact says:
    16 Oct16 October 08:00

    Would be interesting to know their card carrying numbers down under…a market dominated by Qatas with numerous card offerings as well as Amex co-branded and Bank partners. Certainly nothing like the UK market.

  • astra19 says:
    16 Oct16 October 08:37

    Miles and More is so awful as a programme I don’t think I’d want to tie myself to it. I fly with them once a year in business and I have literally never, not once, had points post successfully. In any case, they expire so soon I’m never going to use them so I don’t care.

    • AJA says:
      16 Oct16 October 09:08

      I tend to agree with you regarding Lufthansa’s FF scheme, especially the hard expiry. But holding their credit card stopped that happening which is a positive if a Star Alliance card does the same thing.

    • @thirdpassport says:
      16 Oct16 October 11:56

      Agreed! Over the years I have bought so much rubbish LH merch just to to use up expiring miles. I think I’ve only ever managed to redeem for a flight once and that was terrible value.

      • Jonathan says:
        17 Oct17 October 00:22

        Rob mentioned a little while ago about him spending some 50K points on a intra-Europe flight, and that was literally just to spend some points rather lose them altogether due to the program’s hard expiry, I can’t remember the full details…

        What does half baffle me is that many of the airlines that enforce hard expiry policies, many of them are in Star Alliance, and there’s only a couple or a few programs within the alliance like Air Canada AeroPlan and Aegean’s that have a BAEC type policy on points expiry…

      • Alex Sm says:
        17 Oct17 October 22:27

        Their luggage and backpacks are actually quite good!

        • Peter says:
          18 Oct18 October 19:55

          They were once, yes. Their quality has imploded over the past 3 or 4 years though.

  • Bob says:
    16 Oct16 October 10:19

    Personally , I’d love a Turkish Airlines card. Their planes and Asia connections are great.

  • Lady London says:
    16 Oct16 October 10:23

    I suspect the problem in the UK is the Lufthansa Group isn’t currently willing to starr another LH branded card or hasn’t been able to find a partner they can work with for mutual profit given the interchange cap. Meanwhile I suspect if they participate in a card they’d want it branded Lufthansa and not yet ready to give that up.

    So as someone who knows nothing I’m just guessing Star Alliance would have to make a Star Alliance card work in UK or Europe (basically, Germany) with just the non-LH Group members of *A.

    Sad as there’s possibly room under the very high Amex price in Germany for a Star Alliance card with one of the big three .de banks that corporates might take as a foil to Amex. But Lufthansa has an extremely dominant position for flights from Germany for the likely market and so the numbers of where the business is coming from for the card would have to be done carefully.

    • memesweeper says:
      16 Oct16 October 11:49

      “So as someone who knows nothing I’m just guessing Star Alliance would have to make a Star Alliance card work in UK or Europe (basically, Germany) with just the non-LH Group members of *A.”

      +1

      That’s my view — and provided United or Singapore were in, in contrast to Rob/Rhys, I’d not care if LH were out.

      • memesweeper says:
        16 Oct16 October 13:39

        From Theo: “I would love to see more and more airlines join, but I think we’re all realistic and practical. We should be introducing products and services that benefit a specific market that sometimes don’t require all 26 members“

        — I read that as “we don’t need LH in to launch, but we’d like to have them”

        I think this might actually happen, eventually…

        • Rob says:
          16 Oct16 October 13:45

          I think LH would join a UK card. To be fair there is no strategic logic to joining the Aussie card, given they don’t fly there – although you would assume it’s easy money so why not?

    • Jonathan says:
      17 Oct17 October 00:26

      Although Lufthansa have a very strong market for Germany, a lot of flights are also operated by Lufthansa Group, notably EuroWings that aren’t part of Star Alliance…

      The M&M program has weird rules that vary country to country…

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