Treasure Trove of Behind the Scenes Data on Frequent Flyer Programs

Via Travel Data Daily I stumbled upon a treasure trove of current data on frequent flyer programs published at the beginning of the year. Some airlines have disclosed newer data in investor filings over the past three months since this was published, however it’s still largely current.

How Many Members Of Frequent Flyer Programs?

In 2013 American AAdvantage had 74 million members. Once you added in US Airways Dividend Miles (and de-duped) they were up to 100 million.

Here are some membership numbers for international airline programs:

Airline # Members
Air China 51 million
LATAM 30 million
Emirates 20 million
Qantas Airways 12 million
Virgin Australia 9 million
Avianca 8 million
SAS 5 million+
El Al 2 million

How Much Do Airlines Tell Their Accountants That Redemptions Will Cost?

Here’s how much revenue US and international airlines have deferred to cover redemptions:

Airline Revenue Deferred to Cover Redemptions
Alaska Airlines $1,725 million
American Airlines $8,822 million
Delta Airlines $6,321 million
Hawaiian Airlines $322 million
JetBlue $502 million
Southwest Airlines $2,667 million
United Airlines $4,783 million
Air China $530 million
Air France – KLM $983 million
Air New Zealand $232 million
Avianca $384 million
BA/IB/EI Avios $1,406 million
Copa Airlines $50 million
El Al $104 million
Emirates $611 million
LATAM Airlines $1,218 million
Lufthansa $2,608 million
Qantas Airways $1,709 million
SAS $213 million
Virgin Australia $344 million

What Percentage of Miles Will Never Be Redeemed?

United and Alaska both disclose how much ‘breakage’ — or miles that will expire unredeemed — they expect.  United says 18% and Alaska says 17.4%. United tells me they do not plan to revisit that accounting assumption even though they are going to allow fewer miles to be redeemed for travel.

Will Miles Be Redeemed Immediately or Over Time?

Of miles that have already been earned with US airline frequent flyer programs and will be redeemed, what percentage will be redeemed with the next 12 months or over a greater period of time?

Airline Liability Within 12 Months Liability > 12 Months
American Airlines 35% 65%
Delta Airlines 44% 56%
United Airlines 46% 54%
Southwest Airlines 60% 40%
Alaska Airlines 37% 63%
JetBlue 23% 77%

How does this compare to non-US airlines that disclose their accounting breakdown between current and future liability?

Airline Liability Within 12 Months Liability > 12 Months
Emirates 53% 47%
Air China 20% 80%
Qantas Airways 39% 61%
Avianca1 45% 55%
Air New Zealand 48% 52%
Copa Airlines 34% 66%
El Al 67% 33%

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Good data. Here are the more important question – what is the cost per mile redemption and what is the cost when redemption is on a partner flight.

  2. The BA numbers must be wrong. Surely they generate review on redemptions with the fees they charge 🙂

  3. With the new trend if transferable currencies I’m sure redemption percentages are up because people will usually transfer right before booking.

  4. Does AA have lower in year redemption rates (than UA/DL) because they restrict availability so severely that members can’t redeem for flights, or because their members are chronically dis-engaged with the AA program?

    Either way, those numbers look like a significant problem for the program.

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