US Airlines Leaning on Loyalty Programs to Secure Long-Term Success

Airline executives representing the largest carriers in the United States believe loyalty programs and award miles could help the industry thrive despite the looming threat of an economic recession.

According to Reuters.com, loyalty programs have become a major source of income for airlines, as third-party partners—such as credit card companies—award miles to customers based on how much they spend and pay carriers based on miles awarded.

IdeaWorksCompany data showed the share of revenue generated by loyalty programs for the five largest airlines in the U.S.—Alaska, American, Delta, Southwest and United—increased to 16 percent in 2021 from the 12 percent recorded pre-pandemic.

“Credit card spending isn’t going away,” Southwest Airlines vice president Jonathan Clarkson told Reuters.

Delta Air Lines revealed that its partnerships with American Express and other companies generated $5.7 billion in sales in 2022, a total equal to 14 percent of last year’s passenger revenue. American Airlines reported earning $4.5 billion in payments from its partners during the same period, amassing 10 percent of passenger revenue.

Carriers understand the value of the loyalty programs and are looking to expand with new partners. United Airlines recently announced new deals with Norton and SimpliSafe, while Alaska Airlines is working with a mortgage company to award 50,000 miles to customers who secure a home loan.

While the airline industry rakes in the money with loyalty programs, pressure from the U.S. government after a series of high-profile near collisions forced the Federal Aviation Administration (FAA) to issue a safety alert for airlines, pilots and flight control operations calling for “continued vigilance and attention to mitigation of safety risks.”

The National Transportation Safety Board (NTSB) said six runway incursions have been reported since January, forcing the Department of Transportation to host a safety summit last month.