Lufthansa plans to revamp its frequent flyer scheme Miles & More in a bid to boost growth at the business, joining a trend among airlines, some of which have spun them off.
The reorganization is part of a wider restructuring of Germany's largest airline, which aims to boost operating profit to EUR€2.3 billion (USD$3.2 billion) and includes 3,500 job cuts, the expansion of discount unit Germanwings, as well as outsourcing.
The Miles & More reorganization should be completed in the next couple of months, a spokesman for Lufthansa said, declining to provide details.
German newspaper Frankfurter Allgemeine Zeitung (FAZ) earlier reported the airline was planning to spin off the frequent flyer program, which has more than 20 million customers, as a standalone business.
A decision could be taken in the spring and the unit, which would report to the Passenger division, would start operating in the second half of next year, the paper said.
The spokesman declined to comment on the possibility of putting Miles & More into a separate unit, but said there were no plans to sell Miles & More.
Airlines can generate cash by selling loyalty program miles and points to other businesses such as credit card and car rental firms, which in turn use the offer of extra miles to attract customers.
Air Canada sold off its frequent flyer program in 2007 while Air Berlin, Germany's second largest airline, sold 70 percent of its Topbonus program to Etihad Airways for EUR€184 million last year.
According to a 2012 IATA report, when United Airlines filed for bankruptcy in 2002, the only part of its operations that was making money was its frequent flyer program. It also noted Air Canada's Aeroplan raised USD$250 million in 2007 for just 12.5 percent of the company.
Lufthansa does not publish financial figures for Miles & More but FAZ, citing company sources, estimated it contributed around EUR€700 million to group profit last year
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