Tuesday, 12 May 2020

LifeMiles Remains Strong and Members' Miles Safe as Avianca Initiates Reorganization Proceedings

LifeMiles is a separate business from airline partner Avianca, remains well capitalized and is insulated from Avianca's reorganization process

LifeMiles, Latin America's leading coalition loyalty program, today provided an update on its continued partnership with Avianca.

Due to the impact of the COVID-19 pandemic on the travel industry, Avianca has voluntarily filed reorganization proceedings under Chapter 11 of the United States Bankruptcy Code. This filing will preserve and protect Avianca's business, enabling it to reorganize its financial commitments and operations as demand for air travel recovers. Through this process, Avianca intends to preserve jobs, promote the economic recovery of its core markets and maintain its connectivity and operations. Given that Avianca's frequent flyers, which are LifeMiles members, are its most valuable customers, Avianca plans to continue honouring the LifeMiles loyalty program.  Members will continue to earn miles on Avianca flights as well as pay for Avianca tickets using their LifeMiles as normal.

"LifeMiles members can remain confident that Avianca will continue to honour the LifeMiles program, including rewarding its customers with LifeMiles and accepting LifeMiles as payment for airline tickets, as this is a critical part of Avianca's commitment to customers and its long-term success," said Matthew Vincett, Chief Executive Officer of LifeMiles. "We expect our partnership with Avianca to operate as normal during its Chapter 11 process, and we look forward to Avianca emerging from its financial reorganization stronger than ever."

"LifeMiles members are valued Avianca customers, and they can expect to accrue and redeem miles on Avianca and our partners through the LifeMiles loyalty program as normal," said Anko van der Werff, Chief Executive Officer of Avianca. "Avianca remains committed to continuing to serve customers with safe, reliable air travel and high-quality service, as COVID-19 travel restrictions are lifted."

How Avianca's Reorganization Process Affects LifeMiles and Shared Customers

Avianca will continue to accrue and accept LifeMiles as normal during its reorganization process. LifeMiles is a separate business from Avianca, with distinct legal entities, separate shareholders, and its own majority independent governance body. LifeMiles remains well capitalized and LifeMiles' assets are insulated from Avianca's reorganization process.

LifeMiles sells its miles to a wide range of businesses, including retail and commercial partners, in addition to airlines like Avianca. Historically, Avianca and its air partners have made up approximately 30 percent of LifeMiles purchased. The majority of LifeMiles are sold to banks, commercial partners, and members directly. When a member wants to redeem their miles, it is LifeMiles that pays for their rewards. LifeMiles has a strong financial position, enabling it to meet its financial commitments.

In addition to members' continued ability to earn and use their miles with Avianca and Avianca's air partners, LifeMiles offers a wide array of other ways its members can accrue and redeem their miles.

"LifeMiles remains well-positioned to provide strong value to our members and partners, both in the travel and non-travel related sectors," Vincett said. "LifeMiles has built an extensive network of commercial partners, enabling our members to earn and redeem their miles in the restaurant, retail and gasoline sectors, among many other segments. Members will continue to earn miles on their daily purchases via our commercial partners and our credit cards. These miles can be used with confidence for rewards now and in the future. If our members have any additional questions or concerns, I encourage them to consult www.LifeMilesNews.com, where an extensive question and answers section regarding Avianca's reorganization is available."

LifeMiles Remains Strong, Supported by Broad Partner Network and Loyal Member Base

LifeMiles is operating as normal, supported by its strong financial position, extensive commercial partner network, and loyal member base. The Company has 550+ agreements with a wide variety of commercial partners, including most of the leading financial institutions in each of the countries where it operates. Its nearly 10 million members can continue to earn miles through their everyday purchases by using one of more than 700,000 active LifeMiles co-branded credit cards, and by shopping in its broad network of partners, which includes premier hotels, major car rental companies, popular restaurants, and other commercial establishments such as gas stations, supermarkets and leading apparel brands.

"Our members know LifeMiles are valuable when they are redeemed," Vincett continued. "Accordingly, many members earn miles multiple times on their daily spend. For example, when members pay with a LifeMiles credit card while shopping at a LifeMiles partner, they earn miles both via the credit card and via the miles rewarded to them by the retail or restaurant partner."

The Company continues to add new partners regularly, including the recent addition of Uber and Uber Eats as partners across several countries where LifeMiles operates. "These partners have helped members earn and redeem their miles in services that are especially relevant during the COVID-19 crisis," added Vincett.

LifeMiles has also recently taken other actions to show its commitment to its valued members, including the decision to not expire any miles between April 1, 2020 and December 31, 2020.

"We want our members to feel confident that their miles are safe," Vincett emphasized. "We also want to be a responsible corporate citizen, which implies making adjustments to our programs and policies to protect our members against negative impacts from the COVID-19 crisis as much as possible. That said, we look forward to a bright future and to our members being able to 'live their miles' more than ever very soon."

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