How important are airline frequent flyer programs? United, Delta, and American Airlines have each mortgaged their frequent flyer programs for between $6.5 billion and $9 billion apiece. Stifel analyst Joe DeNardi says that without the ability to attract this cash, both American Airlines and United Airlines would be in bankruptcy.
Speaking on a panel at the Loyalty Summit online conference on Wednesday, DeNardi made this bold claim – but one that’s backed squarely by the numbers around cash burn and how much airlines have raised.