Hyundai Card Designed Directly by Korean Air... Card Companies Say "Curious"

Interest Grows in Direct Airline Participation Amid Trend of Benefit Reductions

[Asia Economy Reporter Ki Ha-young] The industry’s attention is focused on the Korean Air exclusive credit card that Hyundai Card will launch at the end of March. As credit card companies are reducing airline mileage card benefits due to declining profitability, there is keen anticipation over whether a product that can change the market landscape will emerge.

According to the industry on the 8th, inquiries about the main benefits and services of the Korean Air exclusive card have recently surged at Hyundai Card. A Hyundai Card official stated, "As airline mileage benefits from credit card companies are being reduced, there has been a noticeable increase in inquiries asking about the extent of benefits provided, since this card is expected to offer customers strong mileage accumulation benefits."

Earlier, Hyundai Card and Korean Air signed a private label credit card (PLCC) partnership agreement last month. A PLCC is a credit card created by a company that wants to directly own a credit card, in collaboration with a card company that has expertise in designing and operating card products. Unlike 'co-branded cards' that add specific company benefits to a card company’s basic product, PLCCs provide all benefits and rewards that customers receive when using the card as benefits from the respective company.

Currently, there are more than 30 co-branded cards offering Korean Air-related benefits such as airline mileage accumulation. Generally, customers can accumulate 1 to 2 Korean Air miles for every 1,000 to 1,500 KRW spent. Cards with higher accumulation rates tend to have higher annual fees and require higher spending thresholds.

Therefore, attention is focused on the benefits of the Korean Air exclusive credit card, where Hyundai Card and Korean Air jointly bear and share the costs and profits involved in the product. Since Korean Air, which directly manages airline mileage, shares resources and participates in operations, it is expected that the card will offer much greater benefits than co-branded cards. In this case, the competitiveness of other mileage cards in the market will inevitably decrease. Additionally, there is interest in the customized benefits and premium marketing that will be provided by utilizing the card payment and airline usage data held by both companies.

An industry insider said, "This is the first time Korean Air is directly involved in the design and operation of a card, so all card companies are closely watching what benefits it will have," adding, "It is like a snack factory directly entering the market to sell snacks instead of just supplying snacks to retailers, so it is expected that there will inevitably be differences in benefits."

This content was produced with the assistance of AI translation services.