Credit Card Companies Vie for Airline Customers in Fierce Competition

The Israeli airline credit card market has seen a significant shake-up following the unexpected move of Flycard, a flagship product previously associated with Israir, to Isracard. This shift, orchestrated by Isracard CEO Itamar Forman and Flycard CEO Moshe Morgenstern, has dramatically altered the competitive landscape. Flycard, linked to El Al's frequent flyer program, boasts approximately 3.5 million members, with 550,000 holding the credit card itself. The club's valuation at the time of the transfer to Isracard was estimated at around 2.7 billion shekels.

Isracard anticipates the Flycard acquisition will generate an annual pre-tax profit of 120-160 million shekels over the next decade, potentially totaling 1.2 to 1.6 billion shekels. Meanwhile, former partner Cal, under new CEO Yafit Grynian, responded aggressively by suing Flycard for breach of contract and launching its own competing card, Flyall, with a significant marketing investment. Cal reportedly acquired around 100,000 customers for Flyall in a short period.

A new player, Superfly, has emerged through a collaboration between Rami Levy, Israir, and Isracard, starting with an estimated 200,000 Rami Levy customers. Israir acquired a 10% stake in this venture, valued at approximately 315 million shekels. Max is also participating with its Max Travel card, offering cashback for the travel sector.

The intense competition, involving significant investments in bonuses and marketing campaigns exceeding 100 million shekels, centers on the benefits offered. Cards directly linked to airlines, like Flycard and Superfly, offer advantages such as flight tickets and upgrades, appealing particularly to business travelers. Cashback-focused cards like Flyall and Max Travel aim to capture the broader tourism market.

Isracard currently holds a strong position, backing both Flycard and Superfly, which are directly tied to airlines. This dual advantage allows them to offer more integrated flight-related benefits than cashback alternatives. Rami Levy's extensive retail network provides a significant advantage for Superfly's customer acquisition strategy.