AIRLINES & ALLIANCES

GLO Featured. Tony Piedade: A quick reflection on a big moves in the airline loyalty in 2025.

From “frequent flyer” to “frequent spender” • Dynamic pricing & the quiet devaluation of miles • Loyalty programs have become huge businesses • Points are moving from “dream trips” to everyday value • Experiments with subscriptions, passes…. and some failures • Qantas, Alaska & others: tweaking the formula • Ecosystems, AI & startups: the next wave • So… is airline loyalty still worth it? • The big picture.

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GLO

09 December 2025. 

By Tony Piedade, Deputy Chairman GLO / Independent Consultant 

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As we close out 2025, here are some reflections on the movements we have seen in the airline loyalty space.

From “frequent flyer” to “frequent spender”

For decades, status was mostly about how far you flew. Now, it’s increasingly about how much money you spend.

• British Airways is moving to a fully spend-based model for both rewards and elite status, following a path US airlines pioneered years ago.
• Finnair Plus has already made the jump: members now earn Avios and tiers purely based on how much they spend, not how many miles they fly.
• Across major US carriers, elite status now typically requires thousands of dollars of annual spend, Some analysis demonstrates how 2023–24 changes have made the path to status noticeably harder almost across the board.

The logic from the airlines’ side is simple: reward your highest value customers, not just the ones who can string together cheap long-haul mileage runs. For travellers, it means:

• Fewer “hacky” ways to earn status
• More emphasis on premium cabins, last-minute fares and co-branded credit card spend

Dynamic pricing & the quiet devaluation of miles

The biggest frustration for frequent flyers is that the goalposts keep moving.

• Many airlines have shifted from fixed award charts to dynamic pricing, where the miles needed can change day-to-day based on demand. A recent analysis across six big carriers found the average “price” of a reward seat jumped about 36% in recent years.
• US regulators have noticed. The US Department of Transportation opened a probe into major carriers over concerns about retroactive devaluations – increasing the points required for redemptions or status even after customers have already earned them.
• Another review highlights how airlines like United have repeatedly increased the miles required for “free” flights, further eroding value.

In plain English: the same trip often costs more miles than it used to, and you have far less certainty about what your points are really worth.

Loyalty programs have become huge businesses

Behind the scenes, loyalty schemes aren’t just marketing; they’re financial engines.

• During the pandemic, American, Delta, and United used their loyalty programs (especially their co-branded credit card portfolios) as collateral to borrow around $19 billion to survive the crisis.
• Banks, fintechs and neobanks love partnering with airline schemes because they bring huge, affluent customer bases and strong emotional pull, making miles a kind of “shadow currency” in the financial system.

This is why you can now earn airline miles on everything from your grocery shop to your Netflix bill: points are the glue holding together a massive ecosystem of airlines, banks, retailers and travel portals.

Points are moving from “dream trips” to everyday value

Rising living costs mean many people aren’t hoarding miles for that once-in-a-lifetime business-class trip anymore.

In Australia, Virgin Australia’s Velocity Frequent Flyer program reports a big behavioural shift:

• Over half of Australians say they feel more financially under pressure than last year.
• Nearly half of Velocity members are now using points for everyday purchases and holiday expenses; think groceries, retail and household items, rather than saving purely for flights.
• There’s been a 40% rise in points earned through non-travel partners like Coles, Bunnings and 7-Eleven, and redemptions for things like air fryers and headphones are booming.

This tells you where loyalty is heading: flexibility and practical value matter as much as aspirational trips.

Experiments with subscriptions, passes…. and some failures

Airlines are also trying new formats beyond classic points-plus-status.

Paid status & passes

• American Airlines recently launched an AAdvantage Gold Pass, pay around $5,000 and you get instant Gold status, 100,000 bonus miles and 15,000 loyalty points, plus perks like early boarding and a free checked bag.

That’s essentially loyalty as a product: instead of earning status over a year, you buy it in one go.

Subscription clubs that didn’t work

• In Europe, Ryanair launched a “Prime” membership in 2025, charging £79/€79 a year for discounts, insurance and free seat reservations. Around 55,000 members joined – but passengers ended up saving too much money.
• The discounts and benefits cost the airline over €6 million, versus about €4.4 million in fees, so Ryanair pulled the plug after just eight months, citing a €1.6 million loss. Existing members keep their perks until their term ends, but no new sign-ups are allowed.

It’s a good reminder: airlines are still feeling their way around new loyalty models, and not every experiment sticks.

Qantas, Alaska & others: tweaking the formula

A few other interesting moves:

• Qantas has announced changes to its loyalty scheme that, by the airline’s own admission, will mean many members spend more points and more in fees for similar rewards – effectively a controlled devaluation.
• Alaska Airlines’ Mileage Plan continues to evolve with extra benefits for elites and credit-card holders, plus tighter integration with sister carrier Hawaiian Airlines, reinforcing how important co-branded credit cards have become to “loyalty economics”.

Ecosystems, AI & startups: the next wave

Loyalty is also expanding beyond the airline:

• Travel and loyalty platforms talk about “interconnected ecosystems” where airline, hotel and experience rewards all blend together, powered by AI-driven offers and personalised perks rather than simple point balances.
• Chase Travel, for example, integrates flights, hotels and experiences into a single bank-run travel platform with rewards and perks, so the “loyalty” relationship is as much with the bank as the airline.
• Travel-tech startups are piling in too, arguing that airline programs have lost passenger trust with complexity and devaluations – and pitching simpler, more transparent reward models as an alternative.

The battleground is shifting from “whose card is on your keyring” to “whose ecosystem you live in when you plan and book travel”.

So… is airline loyalty still worth it?

Short answer: yes, but only if you play more deliberately than before.

A few practical takeaways:

1. Pick one or two core programs
   Don’t spread yourself too thin. Choose based on where you actually fly, who your local hub carrier is, and which credit cards or bank partners you can realistically use.
2. Think in value, not in points
   Compare the cash price vs miles price for every redemption. If dynamic pricing makes a ticket poor value, save your miles for when they do unlock outsized value (often long-haul premium cabins, upgrades, or last-minute flights).
3. Use flexible currencies when you can
   Bank or card points that transfer to multiple airlines give you a hedge against any one program’s devaluations.
4. Don’t hoard forever
   With ongoing devaluations and program tweaks, miles are a declining-value asset. Have a rough plan to use them within a few years rather than “saving for retirement”.
5. Decide if elite status actually fits your life
   If your employer pays for flexible, premium-cabin tickets, status can still be hugely valuable. If you mostly hunt for the cheapest fare, chasing status on one airline might no longer be worth the time and money.

The big picture

In my view, what’s going on with airline loyalty programs is basically this:

• They’ve become massive financial businesses in their own right, tightly linked to banks and credit cards.
• Airlines are shifting from rewarding miles flown to money spent, and from fixed charts to dynamic pricing.
• Regulators are starting to pay attention to devaluations and transparency.
• Travellers, especially in markets under cost-of-living pressure, are treating points more like everyday currency than lottery tickets for lie-flat seats.

Airline Loyalty programmes can still represent good value (for some) but the rules of the game have changed. If you treat miles as a tool, not a treasure, and stay alert to program changes, you can still make these schemes work for you rather than the other way around.

Source: GLO