I think she bought a flight. The airline believes she has bought loyalty. Credit: Iurii Maksymiv via Canva.com
There was a time when airlines made money by flying planes. Doesn’t it seem obvious? You buy tickets and they take you to your location and hopefully make a little profit. However, that’s not the case. Now some of the most important airline profits come from selling royalty points to banks, not from flying.
You might say your boarding pass is a “passenger”, but behind the scenes you are just a data point with truly potential spending. Within that model, flights are roughly next to the point. The real game is on the ground between banks, airlines and billions of people they exchange and exchange for your loyalty, and once you see it, you won’t see it.
Miles, not miles traveled.
I used to be grateful for the loyalty programme set up by the airline. You flew a lot and they gave you perks for it. If you played your card correctly, it’s a free flight, but the system has been reversed. Currently, these points are products.
Airlines not only offer travelers, but also sell large quantities to banks. The banks then bundle into credit card offers and pitch to customers chasing their rewards, and the cycle begins.
Points flow faster and money flows faster with flights. They seem almost secondary.
- Delta and American Express’s Partnerships generate billions of dollars more per year than some airlines make from ticket sales.
- These are not side transactions;They are some tough quarter lifelines. The sale of loyalty points keeps carriers profitable and is not a flight.
Wild is how unseen behind the scenes that all of this makes you feel. Tap the card, earn miles somewhere, and the airline just made money without taking off. It’s no longer just a loyalty program. It’s like a winged financial product.
How airline credit cards work
What’s interesting is that your free flight is someone else’s revenue stream. When banks offer sign-up bonuses and target at 50,000 or 80,000 miles a year, they don’t just pull random points out of the thin air.
- They buy them directly from the airline
- It provides just a small portion of the perceived values.
- The airline records it as immediate income.
- Even before a single engine is turned on, money changes hands and changes real money.
This setup is great and how easy it is.
- Airlines There are also billions of points with little overhead costs
- bank Get customer acquisition bait
- Cardholderchase these red dates.
To give a more specific example, seat availability becomes rare, taxes and fees increase, and redemption power losses become more frequent. But even so, the system continues to function as it is built on premises that amount to freedom, upgrades and elite perks.
The reality of the situation is that if you’re lucky, you’re in the middle of the other country. What’s the best part about those airlines? Loyalty never complains, doesn’t need fuel, doesn’t need to hit, doesn’t need snacks in flight, you’ll sit on your balance sheet and look quietly.
What does this mean for passengers?
Regular passengers fly several times a year, use branded credit cards and accumulate those miles, but you’ll find that they’ll be charged an additional $200 tax and fees in addition to double the points of a free flight.
The reward is not really appreciated, but it’s like a puzzle without edges, as you’re told to make sure the seat you want is blocked and the date doesn’t match and you’re told to keep checking.
This system was not designed to rule you out, but has evolved to prioritize spenders over travelers. In some cases, people who have never jumped out in a year but who have executed their credit card bills will have more perks than those who boarded the plane.
Is it about what you swipe, and the airline, not where you go? Whether you fly or not, the money is already in the bank, so they’re fine with that.
The whole picture
You might think you’re just flying for a few hours in the sky and on an airline or something. Purchase history, profile and potential conversion flights were transactions, but now it’s a marketing funnel.
You can also change the park, or get status upgrades, but you can notice the next time you board. It’s not just airplanes. You are a product.
