How United Airlines Mortgaged Its Frequent-Flier Program

United Airlines aircraft at San Francisco International Airport in 2015. (Louis Nastro/Reuters)
Loyalty programs are providing a cash buffer that may stave off bankruptcy.

NRPLUS MEMBER ARTICLE T he airline industry isn’t exactly a lodestar of innovation. Because all flights are more or less created equal, airlines have little room to differentiate their product offerings. In order to make money, they resort to cramming passengers into ever-tighter spaces, as well as charging baggage fees, reservation fees, booking fees, and whatever other fees they can think up. Such is life in a perfectly competitive industry.

But in procuring capital, airlines are proving surprisingly innovative. With revenue plummeting during the coronavirus pandemic, cash-burning airlines have had to devise complex financing schemes in order to stay alive. After abandoning a $2.3 billion


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