Are Loyalty Programs Fair? The Backlash Against Airlines’ Most Valuable Asset

Loyalty is big business for airlines. In 2023, American Airlines raked in around $6.5 billion from AAdvantage alone — that included revenue earned from mileage redemptions with credit cards and marketing the program. Delta Air Lines reported deferred revenues of $8.4 billion from its SkyMiles program, and United Airlines had about $7.1 billion in deferred revenue from MileagePlus. 

Besides revenue from tickets — actually flying people places — loyalty programs are one of the most significant revenue streams for an airline. These programs are so critical that some executives refer to them as a “north star.” United calls MileagePlus its “crown jewel.” At American’s investor day in March, CEO Robert Isom said around 65% of its revenue was driven by AAdvantage members. 

But now these cash cows have been under attack from all corners. 

As airlines raise spending requirements to earn status, some passengers have begun to question if these programs are worth it. 

“For a person who is interested in this, who enjoys the game, it can be a good deal,” said Ben Edelman, a frequent flyer based in Seattle who tracks consumer complaints in the airline industry and recently filed one with the Department of Transportation. “But for regular people, my own sense is it's kind of stopped being a good deal.”

Edelman has noticed that it’s become more difficult to get redemptions for business class flights, and that for most people, loyalty programs require too much spending to reach status. 

“The fundamental deal, how much you have to spend, how many flights you have to take to get how much benefit, that deal really isn't being honored anymore,” Edelman said. “And a lot of people are kind of frustrated.”

The federal government had also been circling prior to the recent U.S. election. The DOT, the Justice Department and the Consumer Financial Protection Bureau all have inquiries into the loyalty programs for the four largest airlines. There are also two bills in Congress that seek to put more regulations on credit cards and points and miles. 

Recently, the Senate declined to put the Credit Card Competition Act to a vote, with some senators believing that the bill would not pass Congress. 

It’s likely that these initiatives will die down once President-elect Donald Trump takes office in January. The discontent among tr