A mid-size airline could earn an additional $175 - 210 million a year from passengers it already has. The catch: its loyalty program was never designed for them. Learn from our experts how to turn this opportunity into loyalty gold.
Take a mid-size airline carrying 20 million passengers a year. Assume – conservatively – that 70% of those passengers fly the airline once or twice a year or have never flown it before. That is 14 million occasional travelers. Now ask a simple question: what would it take to persuade just 5% of them to book one additional flight? The answer, at an average ticket price of $250 to $300, is between $175 million and $210 million in incremental annual revenue. No new routes. No new aircraft. No costly customer acquisition campaigns. Just a better relationship with people who already know the airline.
Scale that to a major carrier with 50 to 80 million passengers and the numbers become extraordinary. And yet this opportunity sits almost entirely untouched – because the loyalty programs that could unlock it were not designed for these passengers at all. They were designed, and have remained designed for four decades, for the frequent flier.
The loyalty program that could unlock hundreds of millions in revenue was never built for the passengers who represent the majority of every flight.
A ladder most passengers can’t climb
Between 50% and 90% of passengers on any given flight have either never flown that airline before or do so only once or twice a year. This is particularly true of passengers traveling outside the carrier’s home market – the holidaymaker from Germany on a Gulf carrier, the business traveler from Southeast Asia on a European airline – who may have no prior relationship with the brand at all, yet fill a significant share of seats on every long-haul departure.
The architecture of virtually every major frequent flyer program has barely changed since American Airlines launched AAdvantage in 1981: earn miles per flight, accumulate enough to redeem for rewards, qualify for status tiers by hitting annual thresholds.
In recent years, many carriers have added revenue-based thresholds alongside flight segments – requiring members to spend a minimum amount, not just fly a minimum number of times, to maintain or earn status. This shift has made the ladder even harder to climb for the occasional traveler, who neither flies frequently nor spends at the levels corporate accounts do.
The American market operates somewhat differently: the deep integration of airline miles with co-branded credit card programs means that a significant portion of miles in the US are earned on the ground through everyday spending, partially compensating for infrequent flying.
Outside the United States, however, that credit card ecosystem is far less developed, leaving occasional travelers in most markets with no meaningful way to accumulate or protect their balances between flights. The entire structure remains a ladder with the rungs set far apart – and for most of the world’s occasional flyers, the bottom rung is already out of reach.
For the occasional traveler, this creates what might be called the cold start problem. Flying twice a year generates a modest balance of miles. This is rarely enough to redeem for anything meaningful before they expire. The passenger signed up, engaged with the program, and was ultimately rewarded with nothing. Worse, their miles were quietly cancelled. Programs that create the expectation of reward and then fail to deliver generate more negative sentiment than having no program at all.
Five years of loyalty, gone in one
The cold start problem afflicts occasional travelers from the outset. But there is a second problem that strikes those who have actually earned their loyalty: the status downgrade. A passenger who spent five years as a Gold or Platinum member – choosing the airline even when a cheaper competitor was available, recommending it to colleagues – misses their requalification threshold because of a job change, a project that wrapped up, parental leave, or a period of illness.
With mechanical indifference, the airline strips their status. They return the following year as an ordinary customer: no priority boarding, no upgrade eligibility, no acknowledgement of the relationship built over half a decade.
The contrast with the hotel industry is instructive and uncomfortable. Marriott Bonvoy, Hilton Honors, and World of Hyatt all offer lifetime status tiers – recognition earned through cumulative nights and spend over years, carried permanently regardless of activity in any single year. The hotel down the road from the airport has already understood something the airline has not: people who have given you years of loyalty deserve to keep something for it.
Nor is the concept of status protection entirely foreign to airlines. During the Covid-19 pandemic, carriers across the world froze and extended elite status when travel collapsed overnight. If the logic was sound enough to apply across the board during a global crisis, it is surely sound enough to extend to an individual member navigating a career change. The pandemic proved that airlines know how to protect the relationship when the pressure is sufficient. The question is whether they will apply that same principle in ordinary times.
What other industries already know
The solutions airlines need are not theoretical. They are already operating at scale in adjacent industries. Mobile operators long ago recognized that low-frequency customers still churn, still recommend, and still influence the decisions of those around them. The T-Mobiles Tuesdays rewards program offers benefits to every subscriber regardless of plan size. Tenure-based recognition – perks for staying, not just spending – is standard practice. Supermarket loyalty schemes from Boots to Carrefour reward every transaction, keep redemption thresholds accessible, and never punish a customer for a quiet month. Starbucks Rewards uses gentle gamification to keep even the occasional visitor engaged between visits.
None of these programs reset the relationship to zero at the end of a calendar year. All of them treat the length and continuity of the relationship as something worth recognizing. Airlines, almost uniquely among major consumer industries, do the opposite.
Good objections – none of them good enough
Airlines have not ignored this problem out of blindness. The objections are rational, and they deserve to be named. Expiring miles are not a program flaw but a profit line: every mile that lapses unredeemed is near-pure margin, and slower expiration means a larger liability on the balance sheet. Loyalty program levels are a status symbol – Gold is valuable precisely because most passengers do not have it, and lounges and upgrade lists are physically finite. And many revenue managers doubt that occasional travelers respond to loyalty at all, believing they book on price and schedule alone.
Breakage revenue matters, but it is unlikely to outweigh the value of additional engagement and retained spend. Status dilution is not an inevitability; it is a design challenge. Airlines can reward occasional travelers without eroding the exclusivity of elite tiers, just as hotel programs have done for years. And the assumption that occasional travelers do not respond to loyalty incentives is less a proven fact than an artifact of existing program design.
Fixing it without breaking it
Answering the design question does not require dismantling the frequent flyer system. It requires layering in a parallel logic – one that acknowledges relationship value alongside transaction volume.
For the occasional traveler: milestone-based rewards that recognize the first, second, and fifth flights rather than just the fiftieth; points that expire slowly or not at all; experiential perks – a lounge day pass, an upgrade token, priority boarding – accessible at low thresholds; and a partner ecosystem rich enough to keep engagement alive between journeys.
For the downgrade problem: a genuinely slow descent, where a member loses one tier only after two or more consecutive years below the threshold rather than one – giving loyal passengers a real runway to recover their standing. Status hibernation for members facing documented life changes – a concept airlines like Qantas have already proven with parental-leave status holds, but which remains the exception rather than the standard, and rarely extends beyond parenthood to career changes, illness, or relocation.
The same applies to lifetime tier banking, where cumulative history protects a minimum floor status that can never be erased by a single quiet year. And proactive, personalized re-qualification offers that reach lapsing members before disengagement becomes defection. The underlying principle is simple: a seven-year member who flew twice last year is not the same as a new passenger who also flew twice last year. The program should be able to tell the difference.
The 1981 model in a 2026 market
The frequent flyer program was a brilliant innovation for its moment. In 1981, it solved a real problem: retaining a small, high-value segment of business travelers in a newly deregulated market. It worked. It still works mostly, for that segment. But the travel market of 2026 is not the travel market of 1981. Today’s passengers are more diverse, less predictable in their patterns, more influenced by how a brand makes them feel, and more willing to broadcast both positive and negative experiences at scale.
The occasional traveler who feels genuinely valued will tell people. The one who watched their miles expire or returned after a career break to find their status gone, will also tell people – more loudly, and for considerably longer. The cost of re-acquiring a lapsed loyal customer is consistently estimated at five to seven times the cost of retaining them (or even higher, depending on the customer segment). Every downgraded member who defects to a competitor represents not just a lost ticket sale, but a full acquisition cycle the airline will eventually have to fund – on someone it already had.
The passengers are already there, in their tens of millions, on every flight and in every cabin. The revenue opportunity is real, the mechanics of capturing it are proven, and the only thing standing between airlines and that additional $175 - 210 million – or multiples of it – is a loyalty philosophy that has not meaningfully evolved in four decades. The airlines that change that first will not just capture incremental revenue. They will redefine what it means to compete in a market that has, for too long, reduced loyalty to a points balance and a tier color.
Want to explore what a broader loyalty architecture could look like for your airline? Reach out to Lovrenc Kessler or Chris Bergmann.
