Airlines Strategy
Etihad and Vietnam Airlines Launch Mileage Partnership July 2025
Etihad Guest and Lotusmiles members gain reciprocal mileage earning/redeeming across global networks starting July 2025, with new Abu Dhabi-Hanoi flights launching November 2025.
The global aviation landscape is undergoing a seismic shift as airlines seek innovative ways to enhance customer loyalty and expand their market reach. The recently announced loyalty partnership between Etihad Airways and Vietnam Airlines, effective from July 1, 2025, is a prime example of this trend. This strategic collaboration allows members of Etihad Guest and Lotusmiles to earn and redeem miles across both carriers’ networks, offering increased value and flexibility for frequent flyers.
This partnership coincides with Etihad’s upcoming launch of direct flights to Hanoi on November 2, 2025, marking an important milestone in the airline’s expansion strategy. For Vietnam Airlines, the agreement provides access to Etihad’s stronghold in the Middle East and Europe, further enhancing its global footprint. As both airlines report strong financial performances and growing customer bases, this loyalty integration signals a broader transformation in how airlines deliver value to their most loyal passengers.
The partnership stems from a Memorandum of Understanding (MoU) signed in October 2024, which laid the groundwork for broader cooperation. This MoU outlined areas of collaboration including codesharing, cargo operations, and loyalty program integration. The agreement reflects a growing trend in aviation toward “value-based alliances” that prioritize customer experience over traditional equity-based models.
Prior to this loyalty integration, Etihad and Vietnam Airlines maintained an interline agreement that allowed for seamless baggage transfers and through-check-in. This operational familiarity set the stage for deeper collaboration, enabling both airlines to execute a more ambitious loyalty program alignment with minimal disruption.
Economic ties between the UAE and Vietnam have also played a role in this partnership’s development. With bilateral trade exceeding $8 billion annually, the aviation sector is poised to serve as a bridge between the two economies, facilitating both tourism and business travel.
“This collaboration offers Lotusmiles members greater opportunities across an extensive global network… ensuring seamless, rewarding experiences.”, Nguyen Sy Thanh, Director of Lotusmiles, Vietnam Airlines
The timing of the partnership aligns with significant growth trajectories for both airlines. Etihad Airways reported a net profit of AED 1.7 billion ($476 million) in 2024, carrying 18.5 million passengers, a 32% increase year-over-year. Meanwhile, Vietnam Airlines is exploring capital-raising initiatives to strengthen its financial position, including a proposed share issuance to raise up to 22 trillion dong ($866 million).
These financial milestones provide the economic foundation to support expanded loyalty benefits and technological enhancements. The loyalty partnership is expected to further drive premium traffic between Southeast Asia and the Middle East, areas where both airlines are actively strengthening their presence.
By integrating their loyalty programs, the carriers aim to capture a larger share of high-value travelers, particularly business and long-haul passengers who prioritize seamless travel and elite-tier benefits. Etihad’s new route to Hanoi, launching on November 2, 2025, serves as a key pillar of the partnership. Operating six weekly Boeing 787-9 flights, the route connects Vietnam’s capital with Etihad’s Abu Dhabi hub, enabling single-connection access to Europe, North America, and the Middle East.
Vietnam Airlines’ domestic network complements this international connectivity, offering streamlined access to secondary cities like Da Nang and Nha Trang. Coordinated flight schedules will minimize layover times and improve the overall passenger experience.
This route network synergy enhances the loyalty value proposition for both Etihad Guest and Lotusmiles members, who can now use their miles for a broader array of destinations and travel classes.
Etihad Guest, launched in 2006, has grown to over 10 million members as of July 2024. The program features a four-tier system, Silver, Gold, Platinum, and Diamond, based on Tier Miles or Tier Segments. Diamond status, the highest tier, requires maintaining Platinum status and spending $150,000 annually on Etihad flights.
Recent innovations include “Custom Benefits” and “Beyond Benefits,” allowing members to tailor rewards to their preferences. These include transferable elite status, shared lounge access, and AI-driven reward recommendations, supporting a 15% increase in flight redemptions compared to pre-pandemic levels.
These features reflect a broader industry trend toward personalization and experiential rewards, moving beyond traditional mileage-based incentives.
Vietnam Airlines’ Lotusmiles program offers five tiers: Silver, Titanium, Gold, Platinum, and Million Miler. The program includes family account pooling and partial mileage redemptions through its LotusMall platform, enhancing flexibility for members.
The Million Miler tier, requiring 1 million qualifying miles, offers lifetime Platinum-equivalent benefits and exclusive perks such as meet-and-greet services and complimentary Platinum status for family members. This tier targets Vietnam’s growing affluent traveler base and diaspora communities in countries like the U.S. and Australia. During the COVID-19 pandemic, Lotusmiles implemented member-friendly policies such as automatic tier extensions and accelerated status through domestic flights, setting new benchmarks in customer retention.
“We are pleased to offer our members even more ways to earn and redeem their Etihad Guest miles, rewarding guests for every extraordinary travel experience.”, Mark Potter, Managing Director, Etihad Guest
Under the partnership, Etihad Guest members can earn and redeem miles on Vietnam Airlines’ 95-destination network, while Lotusmiles members gain access to Etihad’s global routes. Accrual rates follow each program’s existing structure, with redemption typically requiring 15–20% more miles for partner flights.
This reciprocal access enhances the value proposition for frequent flyers, offering more opportunities to utilize miles and achieve elite status. Both airlines will maintain their independent award charts, but integration efforts aim to minimize friction in the redemption process.
Future enhancements may include elite status reciprocity and shared lounge access, further enriching the customer experience across both networks.
The Etihad-Vietnam Airlines loyalty partnership represents a forward-looking model for airline collaboration. By combining Etihad’s premium service and global reach with Vietnam Airlines’ extensive regional network, the partnership delivers tangible benefits to over 15 million loyalty members worldwide.
As the aviation industry evolves, this agreement highlights a shift toward customer-centric alliances that prioritize flexibility, personalization, and experience. The success of this partnership may inspire similar collaborations among mid-sized carriers seeking to enhance competitiveness without joining traditional global alliances.
When does the Etihad and Vietnam Airlines loyalty partnership begin? Can I redeem Etihad Guest miles on Vietnam Airlines flights? Will elite status be recognized across both airlines?
Etihad Airways and Vietnam Airlines Launch Loyalty Partnership: A New Era of Aviation Alliances
Strategic Foundations and Market Timing
Memorandum of Understanding and Initial Cooperation
Financial Growth and Passenger Demand
Hanoi Route and Network Synergies
Loyalty Program Architecture and Enhancements
Etihad Guest: Tier System and Innovations
Lotusmiles: Competitive Differentiators
Reciprocal Benefits and Redemption Mechanics
Conclusion: A Blueprint for Future Aviation Partnerships
FAQ
The partnership is effective from July 1, 2025.
Yes, Etihad Guest members can earn and redeem miles on Vietnam Airlines’ network starting from the partnership launch date.
As of now, elite status recognition is not fully integrated, but future enhancements may include reciprocal status benefits and shared lounge access.
Sources
Photo Credit: Etihad
Airlines Strategy
MAG Considers Selling Loss-Making Firefly Within Three Years
MAG eyes potential Firefly sale amid losses, monitoring performance through 2028 with jet relocation and market competition challenges.
This article summarizes reporting by The Star.
Airlines Aviation Group (MAG), the parent company of Malaysia Airlines, has publicly acknowledged that divesting its loss-making subsidiary, Firefly, remains a strategic option. According to reporting by The Star, the group has set a timeline of approximately three to four years to determine the carrier’s fate, with a final decision expected around 2028 or 2029.
The potential sale is part of considerations under MAG’s newly unveiled “Long-Term Business Plan 3.0” (LTBP3.0), which covers the period from 2026 to 2030. While the parent group has secured three consecutive years of profitability, Firefly has struggled to contribute positively to the bottom line. Group Managing Director Datuk Captain Izham Ismail confirmed on December 15, 2025, that while no immediate sale is planned, the option remains “on the table” if the subsidiary cannot turn its operations around.
MAG leadership has indicated that Firefly is currently in a critical probationary period. Following a major operational restructuring in August 2025, the airline has been given a window to prove its financial viability. The Star reports that the group intends to monitor performance closely over the next few years before making a “drastic decision.”
This timeline coincides with the expiration of specific aircraft leases, allowing the group to potentially exit the business with lower financial penalties if the turnaround Strategy fails. The decision to wait until 2028 or 2029 suggests that MAG is willing to give the carrier one final opportunity to succeed under its new dual-hub model.
A central factor in Firefly’s recent struggles was the performance of its jet operations at Sultan Abdul Aziz Shah Airport (Subang). In August 2025, the airline moved its entire fleet of Boeing 737-800 jets from Subang to KLIA Terminal 1.
According to industry data, the jet operations at Subang suffered from operational constraints and a lack of connectivity to the wider MAG network, leading to unsustainable yields. By relocating to KLIA, Firefly now operates in direct competition with low-cost carriers, while maintaining its turboprop (ATR 72-500) fleet at Subang for short-haul regional connectivity.
The Financial-Results health of the parent company stands in stark contrast to its subsidiary. MAG reported a net profit of RM54 million for 2024 and is projected to remain profitable through 2025. However, Firefly’s net losses reportedly widened in the 2024/2025 period. Data cited in recent research reports indicates that yields dropped by approximately 19% prior to the operational shift, dragging down the group’s overall margins. The Malaysian aviation sector is facing intense competition as 2026 approaches. Firefly’s move to KLIA Terminal 1 places it in a crowded market dominated by AirAsia and Batik Air Malaysia. AirAsia continues to lead with lower unit costs, making it difficult for Firefly to compete effectively in the value segment without cannibalizing Malaysia Airlines’ premium traffic.
Furthermore, a new state-backed competitor is set to disrupt the market. AirBorneo, owned by the Sarawak state government, is scheduled to take over Rural Air Services (RAS) from MASwings on January 1, 2026. The new airline plans to launch jet operations by July 2026, introducing fresh competition in East Malaysia, a key market for Firefly.
The hesitation to sell Firefly immediately likely stems from the complexity of the local aviation ecosystem. Firefly occupies a difficult “middle ground,” it lacks the massive scale of AirAsia to win on pure cost, yet it cannot drift too far upmarket without confusing the brand proposition of Malaysia Airlines.
From a strategic standpoint, holding the asset until lease expiration in 2028 makes financial sense. It avoids early termination fees and provides a hedge against the new competition from AirBorneo. If the move to KLIA fails to improve yields, a sale to a private equity firm or a regional group looking for valuable slots at Subang would be the logical exit strategy. For now, MAG seems content to use Firefly as a flanker brand, but the patience of the parent company is clearly finite.
MAG Signals Potential Sale of Firefly Amid Continued Losses
The Three-Year Ultimatum
Operational Shifts: The Move from Subang
Financial Divergence
Competitive Landscape and New Entrants
AirPro News Analysis
Sources
Photo Credit: Firefly Airlines
Airlines Strategy
India Approves Al Hind Air and FlyExpress Airlines for 2026 Launch
India’s Civil Aviation Ministry grants approvals to Al Hind Air and FlyExpress, targeting regional routes in 2026 alongside startup Shankh Air.
This article summarizes reporting by Hindustan Times.
The Indian Ministry of Civil Aviation has officially granted No Objection Certificates (NOCs) to two new airline startups, Al Hind Air and FlyExpress, according to reporting by the Hindustan Times. The approvals, issued in late December 2025, mark a significant step in the government’s effort to diversify the country’s aviation sector, which is currently dominated by a few major players.
These new entrants are expected to commence operations in 2026, joining Shankh Air, another startup carrier that received its initial approvals earlier in the year. As noted in the Hindustan Times report, the entry of these carriers comes at a time when the market is heavily consolidated, with IndiGo and the Air India Group controlling the vast majority of domestic traffic.
Based on the regulatory filings and industry profiles associated with the approvals, the two new airlines are adopting distinct strategies focused on regional connectivity rather than immediately challenging legacy carriers on trunk routes.
Al Hind Air is backed by the Alhind Group, a Kerala-based travel and tourism conglomerate with a reported turnover exceeding ₹20,000 crore. According to industry data, the airline will be based at Cochin International Airport (COK) and aims to serve as a regional commuter carrier.
The airline’s initial fleet strategy reportedly involves inducting 2–3 ATR 72-600 turboprop aircraft. This choice of aircraft suggests a focus on Tier-2 and Tier-3 cities in South India, connecting Kochi with destinations such as Bengaluru, Thiruvananthapuram, Chennai, Kozhikode, and Hubballi. While the carrier plans to eventually expand into international operations with narrow-body Airbus jets, its immediate focus remains on regional connectivity.
The second carrier to receive an NOC, FlyExpress, is backed by Fly Express International Courier Cargo Service. Based in Hyderabad at the Rajiv Gandhi International Airport, the airline’s background in logistics suggests a potential hybrid business model that may combine passenger services with cargo operations.
Like Al Hind Air, FlyExpress is expected to launch in 2026. While specific fleet details remain scarce, the carrier is likely to utilize smaller regional aircraft suited for short-haul routes in South-Central India. In addition to the two newly approved carriers, Shankh Air is preparing for a Q1 2026 launch. Unlike its regional counterparts, Shankh Air is positioning itself as a Full-Service Carrier (FSC). It will be the first scheduled airline based in Uttar Pradesh, with hubs planned for the upcoming Noida International Airport (Jewar) and Lucknow.
According to available fleet data, Shankh Air plans to operate Boeing 737-800NG aircraft, offering a two-class configuration. The airline aims to scale rapidly, targeting a fleet of 20–25 aircraft within three years to serve high-demand routes across North India.
The approval of these three carriers highlights a strategic shift in Indian aviation. Currently, the market is characterized by a “duopoly” where IndiGo and Air India Group hold over 90% of the market share. Recent operational challenges faced by major incumbents have underscored the need for greater market stability and consumer choice.
We observe that the government is actively encouraging these new entrants through the UDAN (Ude Desh ka Aam Nagrik) scheme, which subsidizes flights to unserved airports. By establishing bases in regional hubs like Kochi, Hyderabad, and Noida, rather than the saturated Delhi and Mumbai airports, these startups are lowering their entry barriers and aligning with national connectivity goals.
When will Al Hind Air and FlyExpress start flying? What aircraft will Al Hind Air use? Is Shankh Air a budget airline?
India Grants Approval to Two New Airlines: Al Hind Air and FlyExpress
Profiles of the New Entrants
Al Hind Air
FlyExpress
Shankh Air and the 2026 Landscape
AirPro News Analysis: Breaking the Duopoly
Frequently Asked Questions
Both airlines have received their No Objection Certificates (NOCs) as of December 2025 and are expected to commence flight operations in 2026 after securing their Air Operator Certificates (AOC).
Al Hind Air plans to launch with ATR 72-600 turboprop aircraft, focusing on regional routes in South India.
No. Shankh Air is positioning itself as a Full-Service Carrier (FSC) with Business and Economy classes, distinguishing it from the low-cost models of Al Hind Air and FlyExpress.
Sources
Photo Credit: Union Minister of Civil Aviation, Government of India
Airlines Strategy
American Airlines Ends Mileage Earning on Basic Economy Fares
American Airlines stops awarding miles and Loyalty Points on Basic Economy fares purchased after December 17, 2025, aligning with Delta’s policy.
This article summarizes reporting by NBC DFW.
American Airlines has quietly updated its loyalty program terms to remove all mileage and status earning capabilities from its lowest-priced tickets. As of this week, travelers purchasing Basic Economy fares will no longer accrue AAdvantage® miles or Loyalty Points, marking a significant shift in the carrier’s approach to budget-conscious flyers.
According to reporting by NBC DFW, the policy change took effect for tickets purchased on or after December 17, 2025. The move aligns American Airlines more closely with Delta Air Lines, which also restricts earnings on its most restrictive fares, effectively creating a “pay-to-play” environment for travelers seeking elite status.
The update was not accompanied by a formal press release but appeared as a revision to the “Basic Economy” section of the airline’s official website. This “stealth” implementation has drawn attention from frequent flyers and industry analysts who view it as a strategy to further segment customers based on their willingness to pay for premium attributes.
Under the previous structure, Basic Economy passengers earned 2 miles and Loyalty Points per dollar spent, a rate that was already reduced by 60% compared to standard Main Cabin fares. The new policy eliminates this earning potential entirely.
The revised terms apply specifically to the date of purchase rather than the date of travel. According to the updated terms on AA.com:
While the ability to earn status has been removed, American Airlines has retained certain amenities that distinguish its Basic Economy product from ultra-low-cost carriers. Passengers traveling on these fares are still permitted one free carry-on bag and one personal item. Additionally, standard in-flight perks such as complimentary snacks, soft drinks, and entertainment remain included.
Travelers who already hold elite status will continue to receive their applicable benefits, such as priority boarding and upgrades, when flying Basic Economy, even though the flight itself will not contribute to retaining that status for the following year.
This policy update places American Airlines in direct alignment with Delta Air Lines regarding loyalty earnings on basic fares, while widening the gap with other competitors. Delta Air Lines currently awards zero miles or status credit for Basic Economy tickets. By matching this restriction, American has effectively standardized the “no-earn” model among two of the “Big Three” legacy carriers.
United Airlines takes a different approach. United allows Basic Economy passengers to earn Premier Qualifying Points (revenue-based credit) but does not award Premier Qualifying Flights (segment counts). However, United is significantly more restrictive regarding baggage, prohibiting full-sized carry-on bags for non-elite Basic Economy passengers on domestic routes.
In contrast, carriers like Southwest, Alaska Airlines, and JetBlue continue to offer loyalty incentives on their lowest fares, though often at reduced rates compared to standard tickets.
We view this move as a calculated effort by American Airlines to force a clearer choice upon the consumer: pay a premium for the possibility of status, or accept a purely transactional relationship with the airline.
By removing the trickle of Loyalty Points previously available on Basic Economy, American is signaling that its elite ecosystem is reserved exclusively for higher-yield customers. For a traveler spending $100 on a ticket, the loss of ~200 redeemable miles is negligible in terms of redemption value. However, the inability to earn Loyalty Points is a major blow to “status chasers” who rely on segment volume and cheap fares to reach tiers like AAdvantage Gold or Platinum.
Furthermore, the retention of the free carry-on bag suggests that American is wary of ceding too much ground to Spirit and Frontier. While they are willing to cut loyalty costs, they appear unwilling to adopt United’s strict baggage ban, likely to avoid alienating the general leisure traveler who prioritizes luggage space over frequent flyer miles.
If I bought my ticket last week but fly next month, do I earn miles? Does this affect Main Cabin tickets? Can I still bring a carry-on bag?
American Airlines Eliminates Mileage Earning on Basic Economy Fares
Details of the New Earning Policy
Key Changes and Effective Dates
Remaining Benefits
Industry Context: The Race to the Bottom?
AirPro News Analysis
Frequently Asked Questions
Yes. If your ticket was purchased before December 17, 2025, you will earn miles and points under the old policy (2 per dollar).
No. Standard Main Cabin fares and higher continue to earn miles and Loyalty Points at the standard rates (starting at 5 per dollar for general members).
Yes. American Airlines has not changed its baggage policy for Basic Economy. You are allowed one free carry-on bag and one personal item.
Sources
Photo Credit: American Airlines
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