"How Big Are the Benefits?"... Korean Air's Directly Designed Hyundai Card Draws Attention (Comprehensive)

Industry Interest in Korean Air Exclusive Card Launch Amid Benefit Reduction Trend

[Asia Economy Reporter Ki Ha-young] Industry attention is focused on the exclusive Korean Air credit card that Hyundai Card will launch at the end of March. As card companies are reducing airline mileage card benefits due to declining profitability, the industry is keenly watching 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 card companies are being reduced, there has been a noticeable increase in inquiries asking about the level 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 jointly by a company that wants to directly own a credit card and a card company with expertise in card product design and operation. Unlike 'affinity cards,' which add specific company benefits to a card company's basic product, PLCCs provide all benefits and rewards that customers enjoy when using the card as benefits from the respective company.

Currently, there are more than 30 affinity cards offering Korean Air-related benefits such as airline mileage accumulation. Typically, 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 to offer much greater benefits than affinity 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 card design and operation, so all card companies are closely watching what benefits it will have," adding, "It is like a snack factory entering the market directly instead of just supplying snacks to retailers, so there is expected to be a difference in benefits."

Hyundai Card is already achieving results in the PLCC market. The Smile Card, launched last year in partnership with eBay, surpassed 700,000 issued cards, and due to the PLCC partnership effect with Costco, the number of members increased by nearly 1 million in the third quarter of this year compared to the same period last year.

A Hyundai Card official explained, "We plan to include various benefits for Korean Air customers in this PLCC, from much stronger airline mileage accumulation than existing affinity cards to services optimized for each customer."

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