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% |
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.
How many people in this case are getting bonus check $ gUaP $? L 😛 L
The BA numbers must be wrong. Surely they generate review on redemptions with the fees they charge 🙂
Chinese airlines are destined to lead the pack in membership numbers.
With the new trend if transferable currencies I’m sure redemption percentages are up because people will usually transfer right before booking.
I’m sure the majority of Korean airlines’ miles liabilities lie beyond 12 months… Their miles are valid for at least ten years!
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.