The UK's biggest supermarket chain Tesco has taken over a popular air miles customer loyalty scheme from its arch-rival J Sainsbury.

Under the scheme, Tesco's 10 million loyalty card holders will be able to redeem points earned from purchases at the store for airline tickets.

It is estimated that shoppers spending �60 a week at Tesco stores would earn enough points to fly to Paris and back twice a year.

Air Miles, the company which operates the scheme, chose Tesco as its main retail grocery partner in November 2001 after a six-year stint with Sainsbury.

Battling for customers

Analysts have said that the new loyalty scheme, which goes live at Tesco's on Friday, could extend the retail giant's lead in market share over Sainsbury, its closest rival.

But Sainsbury has claimed that the air miles programme was becoming less popular with its customers.

Air Miles, which in 2000 issued a total of about 1 billion air miles, has also run customer loyalty programmes in partnership with Nat West bank.

Tesco shares were trading 3.75p higher at 243p in early trade on Friday, while Sainsbury stock slid 2.75p to 400.25p.