Airlines serving Norway’s busiest domestic routes will likely be able to relaunch bonus programs that were banned in 2002. Competition authorities warn, however, that lifting the ban may lead to higher fares.
The state banned bonus programs within Norway 10 years ago mostly because of fears they gave Scandinavian Airlines (SAS) an unfair advantage over rival carriers. Now the head of Konkurransetilsynet, Norway’s competition authority, thinks competition is so “robust” on some routes that she’s recommending the bonus-ban be lifted.
Christine Meyer wants to once again allow bonus programs on flights between Oslo and Bergen, Oslo and Stavanger, and Oslo and Trondheim. Those routes attract more than a million passengers annually but fares may rise, Meyer warned. “Bonus programs aren’t free,” she said, suggesting that the airlines will try to cover their cost by raising airfares.
The bonus ban will still apply on other less-trafficked routes where one dominant carrier could run a rival out of business. “If we allow bonus programs all over the country, we fear one of the carriers on a marginally profitable may pull out,” Meyer said. She wants to avoid monopoly situations, especially in northern Norway.
Officials at SAS, Widerøe and Norwegian Air seemed eager to start offering bonus points on their busiest routes. “It will be great to be able to compete for customer loyalty through service, not just price,” an SAS spokesman told Norwegian Broadcasting (NRK).
Views and News staff