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Aeroplan's U.K. loyalty program signs on easyJet

Loyalty cards help drive business for many airlines.

Groupe Aeroplan Inc.'s UK Nectar loyalty program has signed one of Britain's biggest airlines as its partner beginning the end of March.

Nectar members will be able to redeem their points for seats or combine them with cash payments on easyJet flights.

Aeroplan's Canadian program allows members to earn and redeem miles for flights with Air Canada and the other 26 international airlines that belong to the Star Alliance.

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"From our experience with the Canadian Aeroplan program, we know how incredibly valuable flight rewards are to loyalty program participants," said Aeroplan chief executive officer Rupert Duchesne.

EasyJet flies to more than 550 destinations in 30 countries.

Aeroplan said nearly one million Nector members have enough points to redeem for flights to popular destinations such as Amsterdam, Spain's Malaga, or Nice in France.

It estimates that about 300,000 seats will be booked annually using Nectar points.

Grocery partner Sainsbury's will support the easyJet addition through in-store promotional activity as well as other direct marketing initiatives.

Martin Landry of Desjardins Securities said adding an air travel redemption partner won't add direct revenues for Aeroplan but is key to keeping members engaged in the program.

About 75 per cent of miles redeemed in Canada are for air rewards, highlighting the importance of an airline redemption partner.

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Mr. Landry said it remains to be seen whether the agreement will translate into an accumulation partnership since easyJet's low-cost business model makes it less conducive to join a full-fledged loyalty program, such as Nectar.

The 17 million Nectar members represent an attractive customer base for the airline, given the intense competition among European carriers, he added.

The global loyalty business is expected to reach $100-billion by 2015.

Mr. Landry said Aeroplan, as a worldwide leader, is "well-positioned to leverage its strengths to gain market share in this expanding industry."

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