LOYALTY: A NEW SOURCE OF REVENUE FOR MANY ADJACENT INDUSTRIES

Loyalty can become a significant source of revenue

Across airlines, hotels and retail, loyalty programs encourage customers to return and give companies new ways to earn revenue from commercial partners. For a social platform, the lesson is that a loyalty system can do more than reward users: it can help create a lasting commercial relationship around activity the platform already generates.

Why U.S. airlines are a useful comparison

Airlines earn revenue by selling seats, but running flights is expensive and exposed to changing fuel, labor and operating costs. Their loyalty programs work differently. Banks pay airlines for miles linked to co-branded credit cards. Members earn those miles through card spending, whether or not they fly, and may later redeem them for flights or other benefits.

This creates a partner-funded source of cash tied to customer activity. The airline can also use its loyalty program to keep members engaged with its own network.

What “more valuable than flying” means

It does not mean that airlines earn more loyalty revenue than passenger revenue. It means investors and lenders have placed substantial value on the predictable cash flows and financing potential of airline loyalty programs.

United estimated in 2020 that MileagePlus could be worth about $21.9 billion, based on a 12-times multiple of its 2019 EBITDA. Delta later raised $9 billion using SkyMiles assets as collateral, and American Airlines raised $10 billion using AAdvantage assets. These deals showed that loyalty assets could support significant financing, particularly when airline operations were under severe stress.

What this could mean for your platform

Your platform already helps people discover places, make plans and meet in the real world. WAM proposes testing whether local merchants will pay when that activity leads to a verified outcome. Your platform could issue its own branded points to eligible users, while merchants fund campaigns under agreed terms.

The airline comparison supports the commercial logic of partner-funded rewards. It does not prove that WAM will produce airline-scale economics, or that social platforms should copy airline miles programs. WAM’s participation, merchant pricing, reward costs and platform revenue would need to be measured in a pilot.

Measurement note: Delta’s and American Airlines’ figures are gross partner payments, not stand-alone loyalty profit, so they should not be compared directly with airline operating income. The relevant point is the scale and potential financing value of partner-funded loyalty cash flows.