- Air NZ and hummgroup end partnership negotiations
- After prolonged discussions, the two companies decided not to collaborate
- The main reason is that they could not reach commercial terms
Respective shares of Air New Zealand (NZX:AIR) and hummgroup (ASX:HUM) opened lower as partnership talks between them ended. The reason for ending the partnership negotiations is cited as commercial terms between the two parties that could not be reached despite prolonged discussions.
humm is a buy-now-pay-later (BPNL) platform that entered into an agreement with Airpoints, Air New Zealand’s loyalty program, in November 2021.
According to a statement issued by humm, following a prolonged period of negotiations, hummgroup advises that commercial terms between the two parties could not be reached and, as a result, the contemplated strategic partnership will not proceed.
Terms of proposed partnership
The agreement entered into in November 2021 was to be for a period of 10 years and was expected to deliver significant upside to hummgroup and Air New Zealand. Air NZ’s award-winning loyalty program was to launch a portfolio of financial services products and services. These were going to be managed by hummgroup.
hummgroup was expected to bring its expertise in market-leading digital experience and financial product innovation, including with credit cards and BPNL, to Air New Zealand.
The company already has a presence across New Zealand and Australia in the BPNL segment. It already has huge volumes across the two geographies.
With Air New Zealand operating one of the largest customer loyalty programs, this partnership was going to bring volumes and growth to both companies.
Through this partnership with hummgroup, Air New Zealand was going to develop products that would give its 2.6 million loyal customers new ways to earn Airpoints Dollars. This would enable its customers to get the most exclusive travel benefits.
hummgroup is one of the biggest fintech companies in Australia. It is present in Australia, New Zealand, the United Kingdom, and Ireland with more than 2.7 million customers. Its BPNL product is a market leader for purchases over AU$500.
Air New Zealand’s Plans
In its 2021 data book, released on 18 November 2021, AIR New Zealand stressed that it wanted to enhance its Scalable Airpoints™ loyalty program to drive stronger customer engagement. The airline felt that there was an opportunity to offer more to the customers by way of the loyalty program. Accordingly, Air NZ took a review and decided to expand its partnership in this direction to bring improved benefits such as improved upgrades and personalised services to its members. With this aim, it had started negotiating with hummgroup.