BNZ clips the wings of 200,000 customers

By ALAN PERROTT

More than 200,000 Bank of New Zealand customers using the bank's standard Global Plus credit card now have to spend twice as much to earn themselves airpoints.

The bank has dropped the rate at which the points are earned.

It has also increased the fees attached to the cards saying Air New Zealand has raised the cost of the bulk airpoints it sells to the bank.

The director of the Centre for Banking Studies at Massey University, David Tripe, said the changes showed the scheme had been too expensive for the bank and that the airline was not as well-off as it once was.

He said the only likely beneficiaries from the change might be retailers who had carried much of the cost of the Global Plus reward system.

Australian retailers had blamed reward points schemes for the high costs they faced when processing credit card transactions.

"So if I was a retailer I wouldn't be upset by the change, but I wouldn't hold my breathe waiting for my situation to improve."

Air New Zealand said its supply contract with BNZ was one of several it was reviewing because of higher air fares and increases over the past three years in the cost of running the scheme.

A BNZ spokesperson said the contract with Air New Zealand expired last month.

She said the airline increased its charges for airpoints during the contract renegotiations.

"Despite the increase we have tried to minimise the impact on our customers, as we recognise that people have Global Plus specifically to get airpoints."

The chairman of KPMG's Banking and Finance Group Andrew Dinsdale said the change was part of the economic fallout from the terrorist attacks on New York.

He said that airlines around the world were facing huge balance sheet liabilities for reward points.

"In the new environment that exists, many of these airpoint-based schemes are no longer sustainable, at least not at the price airlines have historically sold them."

He said the banks could not absorb the increased cost because of the uncertain worldwide economic outlook.

He suggested that banks were also re-evaluating their involvement in such loyalty schemes.

This was because they suspected that airpoints were becoming an end in themselves rather than being seen as a reward for using a bank's services.