The airlines of the United States have extra-special status. How special? Many of them may get a second pile of coronavirus relief money before citizens who can’t afford to fly get another $1,200 check.
But as carriers have made their case to legislators in recent months, some have also been pitching banks — using their customers’ faith in free travel as a kind of collateral.
United and Delta have been using their frequent-flier programs as support for their efforts to raise more cash with the help of Goldman Sachs and other banks. And the boasting the two carriers have done as they’ve raised billions of dollars amounts to this: They and their lenders think they have customers, over 100 million of us in each program, right where they want us.
Take it from a Delta securities filing from last month, which called the foundational aspect of frequent-flier programs “the fundamental aspiration of earning a free flight.” Because of our desire for freebies, Delta added, it can “manage costs by modifying inventory levels and value.”
In other words, the airline can raise the prices of trips and upgrades, in miles, at any time. And it believes it can do so with relative impunity from a passenger revolt or from intense protest by American Express cardholders.
Even as the coronavirus pandemic has sapped the ability and desire to travel, miles programs are a winner for the airlines. In the first half of 2020, Delta’s passenger revenue fell 60 percent, but the cash the airline got from American Express’s purchases of miles for its customers fell less than