The Norwegian Competition Authority has reviewed SAS’ and Norwegian Air Shuttle's frequent flyer programmes aimed at businesses in order to assess whether they violate the regulation that prohibits earning frequent flyer points on domestic routes in Norway.
Most frequent flyer programs give benefits directly to the actual airline passengers. Last year however, SAS and Norwegian introduced a new type of frequent flyer programmes giving benefits directly to the businesses paying for the airline tickets. The Authority’s assessment is that these programmes, as they are currently designed, do not restrict competition in Norwegian aviation.
The prohibition of giving frequent flyer points to airline passengers on Norwegian domestic routes dates from 2002, when the Norwegian Competition Authority intervened against the frequent flyer programme of SAS, Braathens and Wideroe. This laid the groundwork for the entry of Norwegian Air Shuttle into Norwegian domestic routes. In 2007 the Ministry of Government Administration and Reform introduced, through the frequent flyer regulation (“bonusforskriften”), a general prohibition against such frequent flyer programmes for all airlines.
– Frequent flyer programmes may have a lock-in effect in that customers incur a cost if they choose a competing airline. Such lock-in may reduce competition between established companies and raise entry barriers for new players, explains Karin Stakkestad Laastad, Head of section in the Norwegian Competition Authority.
After SAS and Norwegian introduced the frequent flyer programmes aimed at businesses, the Competition Authority had grounds for further investigation. In this connection, the Authority collected information from both SAS and Norwegian. The Authority found, after its review, that these corporate frequent flyer programmes, as they are designed today, do not restrict competition.
The Norwegian Competition Authority has therefore informed SAS and Norwegian that there is no reason to investigate further at the present time. The Authority will, however, monitor developments in the corporate frequent flyer programmes in order to ensure that the frequent flyer regulation is complied with.