Forget the baggage fees, the flight change charges, fuel surcharges, and the seat tariffs. The money is in bankcards as today’s WSJ notes.
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Every major U.S. carrier earned more from credit-card and loyalty programs in the second quarter than during the year-earlier period, financial disclosures show.
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For many airlines, those increases outpaced overall sales growth.
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Much of the revenue comes from the credit cards associated with loyalty programs, though the programs don’t necessarily require customers to have a credit card.
Between card loyalty program loyalties, and point exchanges, we are talking big bucks.
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Revenue from American’s loyalty program grew 7% to $1.4 billion in the second quarter, while overall revenue at the world’s top airline by traffic rose 4%.
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The loyalty program accounted for 12% of the carrier’s overall sales, roughly flat from a year earlier.
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Revenue from nonfare, ancillary sources such as bag fees and loyalty programs accounted for 11% of global airline revenue last year, up from 5% in 2010…
Everyone’s a winner…
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The program contributed 15% of Southwest’s second-quarter revenue of $5.7 billion, the largest percentage among major U.S. airlines.
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As the graphic shows, it was 12.8% of Alaska Airlines revenue, 11.8% of American Airlines, 9.3% of United, 8.8% of Delta, 7.8% of Hawaiian Airlines and 4.3% of Jet Blue.
If only airlines can pick up something from the credit card industry, such as transparent pricing, on-time delivery, and never losing a data file.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group