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SYDNEY-Australia's first frequent-buyer program has been introduced in a massive joint effort by the country's No. 1 retailer, leading oil company and largest financial institution.

Fly Buys, which offers free plane tickets for points earned with purchases, is similar to Air Miles, a U.K.-based program from Loyalty Management Group, London, that's been successfully exported to Canada but flopped in the U.S.

Although other retailers, oil, travel and bank marketers have been discussing similar programs for Australia for months, Coles Myer, Shell Australia and National Australia Bank have formed a formidable trio to introduce a program intended to lure 1 million participants in the first year with the hope of adding hundreds of millions of dollars to their businesses.

The three combined have an estimated 5,000 outlets across the country, including supermarkets, department and specialty stores, liquor stores, fast-food restaurants, service stations and bank branches.

A heavy marketing campaign will reach more than 92% of Australians through mid-November, said Peter Langkamp, general manager of Loyalty Pacific, the joint venture running the program.

Fly Buys is getting a $16 million three-month marketing effort. By patronizing the marketers, consumers earn points for free air travel on participating airlines that so far include Qantas Airways, Ansett Airlines and Air New Zealand. There is no fee to join.

The program rolled out Aug. 28 in a blaze of advertising and publicity, with up to $1 million in promotional freebies, like baseball caps and stickers at Shell stations.

DDB Needham has created 45-and 15-second commercials with the theme "The more you buy, the more you fly."

One spot links shopping and holiday experiences by showing a shopper laden with bags diving straight into a swimming pool in a South Pacific resort. In another, a family of skiers pushes shoppingcarts down a slope, and in a third a Myer Grace Bros. department store shopper takes an escalator that magically brings her into the arms of a smiling flight attendant welcoming her aboard her free flight.

Page ads with a similar theme are running in major newspapers.

DDB Needham subsidiary Rapp & Collins is handling a direct mail campaign, distributing 10.8 million brochures to all households in the country. It also will mail newsletters to those who sign up. The agency and its subsidiaries also handle Air Miles.

Sign-up forms are also appearing in all new Myer Grace Bros. department store catalogs.

Coles Myer subsidiaries also are participating: Coles and Bi-Lo supermarkets; Kmart, Myer Direct and Target discounters; Katies clothing stores; Liquorland stores; and Red Rooster fast-food outlets. Shell Australia is running separate newspaper ads by George Patterson Bates, noting, "The more points you earn on the Fly Buys program, the sooner you'll earn free flights." Shell plans to add TV spots later.

In monthly statements, National Australia Bank advises customers how to earn points with credit card purchases. TV spots are planned later in the year. The bank's main agency is Clemenger BBDO.

Other companies that have discussed forming similar programs include Mobil Oil, Caltex Oil, Citibank, Jetset travel agency and Harvey World Travel.

But not all rivals are impressed.

Partners usually pay airlines for these points, cutting their own profits. And in the U.S., consumers quickly grew tired of keeping track of points, especially the spending needed to earn a free trip.

"Maybe promotional gimmicks work, but I'm not at all confident, and I've been in this business since 1954. Woolworths is content to provide top quality merchandise at low prices," Paul Simons, executive chairman of Woolworths in Australia, said at the company's annual general meeting Sept. 7. Would Woolworths follow suit? Both he and Managing Director Reg Clairs sitting next to him spontaneously chorused "No!" "Emphatically, no," Mr. Simons added.

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