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Are Rewards Programs Keeping Airlines Afloat? They just might be.
The program was initially launched in 1981 as the “Delta Airlines Frequent Flyer Program” and was renamed SkyMiles in 1995. The recent ad spot is Delta’s first major investment in marketing the loyalty program. Why the recent focus on marketing the 42-year-old event?
Unsurprisingly, the COVID-19 pandemic.
How airlines are making their own bank
Although the pandemic hit travel demand and spending in 2020, Delta was able to generate cash raise $6.5 billion Pay through the SkyMiles program and co-branded credit card partnership with American Express.
Delta is not alone in using this approach – United used a similar strategy Generate cash from your loyalty program during the pandemic, and recent reports have found that some popular rewards programs more value than airlines,
In late 2020, Delta formed its subsidiary Skymiles IP Limited which essentially acts as the company’s own “bank” from which it can purchase miles to use as financial leverage.
With this move, the success of the SkyMiles program is now integral to Delta’s success, so investing in the development of the program is a no brainer for the company. The more miles it can reward loyal customers, the more potential capital the airline can leverage if travel demand slows down again.
“Grow Your World With Every Mile” may be the first piece of material promoting Delta SkyMiles, but it certainly won’t be the last.
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