SAS's bonus program is worth its weight in gold. Credit card companies, online stores and electricity companies buy airline points to hand out as bait.
Last year, business increased by over 30 percent and the Eurobonus program's turnover exceeded SEK 3 billion.
In the hard-pressed airline industry, loyalty programs have become an important asset – not only for creating loyalty among customers, but also financially.
When SAS spun off its loyalty program into a wholly owned subsidiary, Eurobonus AB, at the beginning of the pandemic, through a transfer of assets, it was valued at SEK 4.6 billion.
There was speculation at the time about an upcoming stock market listing – but instead the subsidiary could be pledged when SAS later began its American Chapter 11 restructuring process.
Last year's financial statements are not completely complete, but according to Eurobonus CEO Aron Backström, growth will be over 30 percent compared to the 2023/2024 financial year, when Eurobonus AB had a turnover of SEK 2.3 billion.
This means that turnover will exceed SEK 3 billion in 2024/2025.
”We are growing extremely rapidly and have doubled our business since before the pandemic,” says Aron Backström.
Revenue comes primarily from external companies that attract customers by awarding airline points. Card companies such as American Express and Mastercard account for ”well over half” of the revenue. More recently, Klarna, Revolut and Lunar have also joined.
”They pay us a certain number of cents per Eurobonus point that they distribute to their customers,” explains Aron Backström.
At the same time, SAS has broadened the group of partner companies. It is possible to collect Eurobonus points when making purchases in online stores, physical stores, restaurants and cafes that are affiliated with the program.
”"For example, it could be a local restaurant that wants to attract customers by giving them Eurobonus points. The same applies to customers who need to shop at a pharmacy, but can choose any chain. And we have nine million members who want to use the points," says Aron Backström.
SAS is thus capitalizing on the loyalty program far beyond the airline industry when other companies turn their backs on Eurobonus' large customer base. The purchase of points becomes a marketing cost for those who want to stand out among competitors.
The latest news is that it is possible to use points as a means of payment at Boozt, while the customer earns new Eurobonus points as a result.
”"E-commerce is a tough industry and this is a way to attract customers. It's super exciting and we also see that our customers have higher average purchases than other customers on Boozt. Right now we are in dialogue with ten to fifteen stores that are relevant and hope that this will spread more during the year."”
The loyalty business is also extremely profitable for SAS. Eurobonus AB has only 17 employees and low costs for most services purchased with points.
”"We have something that most industries don't have - empty airline seats that we are almost certain will not be sold, but which have enormous value for our customers and they collect points to scrape together a seat on the flight to Chicago. So we have higher profitability than SAS in general," says Aron Backström.
In purely accounting terms, however, operating profit remained at just under 76 million during the 2023/2024 financial year, as SAS invoices internally for the bonus seats on flights.
When a member book bonus seats with another Skyteam airline or hotel nights for points with the new partner Scandic, Eurobonus pays them compensation. Conversely, SAS receives revenue when Scandic or Skyteam airline customers use their points to book flights, but they go to the parent company as compensation for the airline seats.
At the same time, the expanded opportunities to earn Eurobonus points without flying have caused protests from some loyal customers, who claim that it has become difficult to find bonus seats.
There is currently a points debt to members worth the equivalent of SEK 1.6 billion. According to Aron Backström, it is in SAS's interest that the points can be used so that customers are satisfied with the program.
”"The focus this year is to ensure that you can get value for your points. The availability of seats was a bit up and down during our first year with Skyteam, but since last autumn we have had a very good booking situation and in January we set an 'all time high' in points used even compared to the Star Alliance period," he says.
Source: DI.SE
