When I saw a session on Hawaiian Airlines’ experience relaunching its credit card product on the Airline Information Mega Event, I was very excited. This card closed to new applicants earlier this year. It’s been popular for a long time in the travel hacking community for at least three reasons:
- Two banks issued the card, and you could apply for both versions at the same time to earn double the sign-up bonus.
- The cards were easily churned, meaning you could apply, cancel, and apply again to get a second bonus.
- The Hawaiian Airlines award chart wasn’t particularly good, but there were some good transfer opportunities to programs like Hilton (obviously not so good anymore).
There was not much shared at the session about the benefits of the new card or whether the rest of the award program will change. In fact, the presenter switched slides so quickly that Wandering Aramean and I couldn’t take a picture of the new card with our phones. So here’s what we did learn.
The session was mostly about the work Hawaiian Airlines did with a consultant to define its goals for a new card and work with issuers to find partners for the relaunch. I missed the first few minutes and am not really clear on whether there were any problems with Bank of America that led them to leave them in the first place. It did seem that they were happy with Bank of Hawaii.
One of the questions I always had about the card was why Hawaiian Airlines had two issuers. It actually makes a lot of sense.
Customers who got the Bank of Hawaii card treated it much like mainlanders treat other airline cards. They were more frequent flyers, they viewed the miles as a means to an end, they had an existing relationship with the issuing bank, and they saw value in the various other earning opportunities that Hawaiian Airlines and BofH offered. Hawaiian Airlines used the card as a way to deepen existing customer loyalty.
Those who picked the Bank of America card were not normally existing customers. They were less frequent flyers (at least on Hawaiian) and saw the miles as a way to get a free trip to Hawaii. Hawaiian Airlines looked at this card as a way to expand their reach into new markets. But perhaps it also resulted in greater churn, which could have been a deal-breaker for BofA more than for Hawaiian Airlines. (I’m just speculating on this last part.)
We also learned that Hawaiian Airlines has been working on this project for a long time, at least since the beginning of 2012. One downside to being located in Hawaii is that it’s not as easy to take a quick trip to Delaware to talk to the issuers and hammer out the details.
They did seem very pleased with the result of their efforts, so while they shared absolutely no details about the benefits of the card, I can tell you that it will be branded as a MasterCard and will continue to be issued by two banks: Bank of Hawaii will still market to Hawaiians, and Barclays will take over the continental U.S. market. The new card should launch in early 2014.
Will this make it any easier or harder to churn? I’m not sure. FIA Card Services will probably continue to manage Bank of Hawaii’s card. A different issuing bank for the mainland may actually make it easier to get approved for both at the same time — FIA also managed Bank of America’s card and regularly asked why someone would apply for two cards on the same day.
But Barclays’ cards can still be churned, which has happened often in the past with US Airways’ card. It’s also possible to apply for multiple Barclays cards on the same day, so perhaps this move will not limit your ability to apply for other cards like the Barclaycard Arrival. Readers have commented, however, that Barclays has gotten tougher in the past year. If you already have several Barclays cards, you may find it difficult to add one more.
Only time will tell. For now, that’s all the information (and speculation) I have to share!
