Airlines Find New Ways to Leverage Loyalty Programs for a Post-Pandemic Era
Photo Credit: United is considering selling 15 percent of its loyalty program Pixabay / DirkDanielMann
Skift Take
Frequent flier programs have a lot of value for airlines. Is it better to raise cash by selling them or to retain them and tap the resource for short-term cash needs? Either way, it's clear that loyalty is poised to enter a new era for creative approaches.
The pandemic caused an economic disaster for the airline industry, which has lost an estimated $200 billion. The sector’s few beneficiaries included its cargo operations and its loyalty programs.
Cargo had a stellar year in 2021, with demand up 19 percent compared to the previous year, the International Air Traffic Association said recently. Similarly, the three global U.S. airlines lauded the performance of their loyalty programs on their January earnings calls. Now, United may raise capital by selling part of its loyalty program while bankrupt Aeromexico bought back its loyalty program for $405 million.
“One thing that has strongly survived the pandemic is the airlines’ ability to generate cash from co-brand programs,” said Jay Sorensen, president of Milwaukee-based IdeaWorks, a travel brand consultant. “I think you’re seeing some airlines behave in a way t
