Frequent Flier Credit Cards Generate More Than
$4 Billion for Major U.S. Airlines - A Report from IdeaWorks
Card issuers, such as American Express, Bank of America, Chase, Citi, and US Bank,
are attracted by annual charge volumes estimated to be in excess of $337 billion.
Frequent flier programs were launched more than 25 years ago as a tool to identify the highest
revenue-producing travelers, establish regular customer communication, and enhance brand
loyalty. In today’s revenue hungry environment, airline management now places a greater
demand on the profit-producing power of these programs. Airline marketers readily admit it’s
difficult to fully quantify the loyalty effect of frequent flier programs. But you can be assured
airline CFOs know the exact ancillary revenue produced from the sale of miles to the largest
program partners - - the card-issuing banks.
Frequent flier programs no longer serve to drive customer communication and brand loyalty
alone - - but rather to deliver extra cash, mostly through the sale of miles to card-issuing banks.
These programs do provide meaningful marketing benefits. However, these are now largely
secondary to the goal of harvesting millions of dollars in ancillary revenue from frequent flier
members. IdeaWorks estimates the sale of miles generates more than $4 billion annually for
the seven frequent flier programs included in this analysis.
Co-branded credit card activity is largely based upon program participation levels. The
following table lists membership levels for the 7 largest mileage-based programs in the USA:
Frequent Flier Program Membership
Airline and Program Name
Alaska Airlines - Mileage Plan
American Airlines - AAdvantage
Continental Airlines - OnePass
Delta Air Lines - SkyMiles
Northwest - WorldPerks
United Airlines - Mileage Plus
US Airways - Dividend Miles
7 Airline Total
Sources: a) Webflyer.com and confirmed by airli