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Home » Why Should People Care About Airline Loyalty Programs? No, Seriously…
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Why Should People Care About Airline Loyalty Programs? No, Seriously…

FlyMarshall NewsroomBy FlyMarshall NewsroomOctober 10, 2025No Comments8 Mins Read
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In the past, I’ve written about the evolution of the miles & points hobby over the years. There’s no denying that a lot has changed — the whole hobby has gone a lot more mainstream, and points are also much easier to earn than ever before, yet at the same time, the programs aren’t as useful as they used to be.

In this post, I’d like to pose a broad question that has been on my mind lately. As we all know, the major US airlines essentially operate as loss leaders for their loyalty programs — they might not make a lot of money actually directly transporting passengers, but they do make a lot of money from their programs.

Not only are the “big three” airlines already generating billions per year in revenue from these programs, but they still see a ton of upside. I want to talk about that a bit. These programs get less and less useful by the year, yet there’s no end in sight for consumer interest. Will something eventually have to change, or…?

Airline loyalty programs are becoming a tough sell for consumers

Obviously everyone should join airline loyalty programs and earn miles for the flights they take anyway, since there’s no downside or opportunity cost to doing that. However, that’s also not where airlines are making money.

Ultimately the way airlines make money with their loyalty programs is by getting consumers to apply for their co-branded credit cards, and have other qualifying partner activity (like booking hotels or rental cars through their portals). Generally speaking, the biggest incentive for consumers is supposed to be that they can earn elite status and earn miles for credit card spending. But how exactly are consumers supposed to be enticed, at this point?

When it comes to earning elite status, back in the day, the biggest benefit was complimentary first class upgrades on a space available basis. Nowadays airlines sell a vast majority of their first class seats (including selling cheap last minute upgrades), so upgrade percentages have gone way down. Maybe going back many years, a top tier elite might get upgrades 80% of the time, while now they might get upgrades 20% of the time, if they’re lucky.

Beyond the benefits you’d get from a basic co-branded airline card, the actual perks of elite status just largely aren’t worth pursuing. And I say this as someone who is obsessed with airline loyalty programs, and who has had top tier status with one airline or another since I was 15 years old. After 14 years, I finally said “you know what, I’m done chasing AAdvantage Executive Platinum,” because I realized I was earning it out of habit, rather than for any particular good reason.

I think the other thing that has really intrigued people about airline loyalty programs is the ability to redeem miles for first and business class experiences. Sure, maybe most people can’t do it consistently, but the intrigue of being able to redeem for flights that might otherwise seem unaffordable has certainly been one of the things that makes many people engage in these programs. It’s kind of like going to a casino, and knowing you can win big.

The current state of premium cabin award availability to and from the United States is really, really sad. Admittedly this is due to a combination of many factors, including that airlines are increasingly restricting award space to their own members, there’s increasing competition for these seats, there are tools that automate the process of finding award space, etc.

To give one example of how things have changed, try redeeming Air Canada Aeroplan points for transatlantic business class at this point. Sure, maybe you can lock in Lufthansa first class within two days of departure. But at this point, Lufthansa and SWISS business class award availability has basically dried up, United has restricted business class award space to its own MileagePlus members, and it’s not like Air Canada has many reasonably priced long haul business class awards.

Similarly, look at American AAdvantage. I’d argue that AAdvantage is actually the best of the lot at this point, as the program makes a fair bit of premium cabin award space available on American flights. But want to travel on Etihad, Qatar Airways, etc.? Well, I hope you’re not planning on originating in the United States…

It’s becoming hard to get excited about loyalty programs

What’s the actual value proposition of these programs at this point?

To the credit of airlines, there’s actually no sign of the interest or success of these frequent flyer programs slowing down. That’s despite the fact that I almost feel like they operate in a vacuum, and think that consumers don’t have alternatives.

I hate to say this, but when non-miles & points people ask me for credit card or elite status tips nowadays, I kind of tell them not to bother with many airline programs. I typically encourage people to earn cash back with their credit cards, or at a minimum, earn rewards with transferable points currencies, and then transfer to foreign programs.

I used to be able to easily tell people “hey, here’s why earning miles & points is super valuable,” but that’s just not the case anymore. Like, what’s my pitch supposed to be?

  • “If you’re fine planning travel within 48 hours of departure and can position to any gateway, you too can fly Lufthansa first class!”
  • “Oh yeah you can book All Nippon Airways first class, just refresh Seats.aero every 10 minutes to see when the one first class award seat across the entire calendar next opens up”
  • “There might not be any Qatar Airways business class award availability now, but if the airline launches a new route, maybe it’ll load a bunch of business class award space by mistake, and then you can book that… I’ve heard Mogadishu is lovely!”

I’ll also often ask people outside the miles & points hobby about their existing strategy, and how they use their airline miles, and the answers are… almost always pretty uninspiring. Like, they don’t seem terribly delighted with what they’ve been able to book, but that doesn’t stop them from continuing with their strategy.

Let me be clear, I still think there’s value in maximizing credit card rewards, and taking advantage of big welcome bonuses, spending bonus categories, etc. But what’s the actual value proposition of specifically wanting to earn points or get a credit card with a major US airline, beyond just a free checked bag benefit, or something?

I guess I’m curious if I’m alone with having this perspective. Ultimately consumers often make decisions against their own best interests, so is the continued growth of airline revenue from loyalty programs reliant on consumers making bad decisions and not maximizing their rewards, or is there something else I’m missing? I suppose the common belief is that “I live in X city and fly Y airline most often, and therefore I should use the credit card from Y airline for my spending.” I guess that’s exactly what airlines want, even if it doesn’t make much sense to me.

What’s interesting about Delta, as an example, is that the airline has really tried to sort of turn itself into a “lifestyle brand.” Now, that absolutely blows my mind, but it’s true. It does feel like some people have Delta credit cards and spend on them simply because they love the brand so much… or what else is the justification?

Airline redemption options aren’t what they once were

Bottom line

The miles & points industry has evolved massively over the years. The changes are a mixed bag, as I’ve covered in the past.

However, what I find most interesting is that the success of the “big three” US carriers is so heavily reliant on the continued revenue growth of their loyalty programs. That’s despite the fact that actually justifying engaging extensively in these programs is becoming a tougher sell, between the decreasing value of elite status, plus the increasingly limited ways to get outsized value with miles & points.

Consumers have choices in terms of their credit card spending, yet airlines seem to have people sold on the concept of using their co-branded credit card simply because they fly a particular airline frequently. Will these programs continue to be more and more lucrative for airlines, or is there a point at which this trend will reverse?

Where do you stand on the evolution of airline loyalty programs? Can the “big three” US airlines do no wrong with these programs, or is there a point at which consumers may actually shift their behavior?

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FlyMarshall Newsroom
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