Frequent-flyer schemes provide airlines with a lifeline
Many carriers are using them as collateral
WHEN EXECUTIVES at American Airlines unveiled the world’s first frequent-flyer programme 40 years ago, they probably didn’t imagine it would one day be worth more than the airline itself. Last year analysts valued the scheme at around $18bn-30bn, eclipsing the company’s current market capitalisation of $12.9bn. Such programmes have proved a boon to American carriers in the pandemic. Firms including American Airlines have raised $30bn in debt backed by the schemes.
This article appeared in the Finance & economics section of the print edition under the headline “Lifting off”
Finance & economics November 20th 2021
- China seeks to extend its clout in commodity markets
- Germany grapples with weird ways to dodge its debt brake
- The case of Japan’s curiously quiescent inflation rate
- Baillie Gifford and the three quandaries of fund management
- As housing costs rocket, governments take aim at large investors
- Frequent-flyer schemes provide airlines with a lifeline
- The violence in Ethiopia imperils an impressive growth record
- Janos Kornai understood capitalism by studying its opposite
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