Valuing a frequent flier program

Branz

Registered User
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899
Just came across this
"Virgin Australia Holdings also said on Friday that it would sell a 35% stake of its frequent flyer program to a private equity firm, valuing the program at A$960m."
here
http://www.bbc.com/news/business-28977837

Just wonder where the value is and what kind of multiples are being used.
 
There is huge value in the programme. Quantas sell points to commercial partners who then offer the points as rewards to customers who then exchange them for flights etc. Then there is the value of the data that they hold.
 
There is huge value in the programme. Quantas sell points to commercial partners who then offer the points as rewards to customers who then exchange them for flights etc. Then there is the value of the data that they hold.

And they really do make people more likely to stay with a particular airline.
Mind you it can have the opposite effect; I avoid using Aer Lingus whenever I can because they don't give flights for their Regional services as they choose to subcontract those flights to Stobart Air. Because of that I use BA or other airlines for long haul flights.
 
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