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While airlines are experiencing cash flow issues; Giants like United Airlines, to keep their heads above water They sought loans worth billions of dollars. But getting a loan
While airlines are experiencing cash flow issues; Giants like United Airlines, to keep their heads above water They sought loans worth billions of dollars.
But getting a loan required a mortgage, and United’s most valuable asset was, surprisingly, The loyalty program was MileagePlus.
In the first wave of Covid-19 For companies like United, cash had become the key to survival. To continue its activities, the company has A $5 billion loan was requested But the collateral required for the loan required slightly more than the value of the company.
Right now United’s most valuable asset MileagePlus loyalty program has been activated. A detail in the documents filed with the SEC revealed that the program had a massive valuation of $21.9 billion.
This situation, Such as Delta and American Airlines It showed that other major airlines have loyalty programs with similarly high ratings.
According to Wall Street analysis, those are the market values of airlines under the financial value of loyalty programs to stay.
Basically loyalty programs, airlines has become their most valuable asset. and even shows that they have more value than the companies themselves.
In other words: airlines Most market values are It actually comes from loyalty programs.
Normal at first earn miles when buying airline tickets programs; Over time, this has allowed you to earn miles in a variety of areas, such as credit card usage, hotel reservations, and car rentals.
Expansion of airlines create their own virtual currency and allowed them to control the supply of their currency.
Frequent flyer programs, It’s actually something of a financial miracle. Airlines act like their own central banks and create and manage their own currencies.
So the airline industry; from a business model based solely on the sale of airline tickets, customer loyalty and Convert brand loyalty into financial benefit It evolved into a much more complex structure.
What do you think of this strategy of the airlines?
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Source: Web Tekno
Alice Smith is a seasoned journalist and writer for Div Bracket. She has a keen sense of what’s important and is always on top of the latest trends. Alice provides in-depth coverage of the most talked-about news stories, delivering insightful and thought-provoking articles that keep her readers informed and engaged.
