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Are rewards programs keeping airlines afloat? They just might be.
Delta Airlines is taking a different marketing approach in its latest video called โGrow Your World With Every Mileโ highlighting its SkyMiles program.
The program was initially launched as the โDelta Airlines Frequent Flyer Programโ in 1981 and was renamed SkyMiles in 1995. The recent ad spot marks Deltaโs first major investment in marketing the loyalty program. Why the recent focus on marketing a 42-year-old program?
Unsurprisingly, the COVID-19 pandemic.
How Airlines Are Creating Their Own Banks
Though travel demand and spending decreased due to the pandemic in 2020, Delta was able to generate cash by raising $6.5 billionย through the SkyMiles program and payouts from its co-branded credit card partnership with American Express.
Delta isnโt alone in using this approach โ United used a similar strategy to generate cash from its loyalty program during the pandemic, and recent reports have found that some popular rewards programs are worth more than the airlines. ย
In late 2020, Delta created its subsidiary SkyMiles IP Ltd. which essentially serves as the companyโs own โbankโ that it can purchase miles from to use as financial leverage.
With this move, the success of the SkyMiles program is now integral to the success of Delta, so investing in the programโs growth is a no-brainer for the company. The more miles it can award loyal customers, the more potential capital the airline can leverage if travel demand dips again.
โGrow Your World With Every Mileโ may have been the first piece of content weโve seen promoting Delta SkyMiles, but it certainly wonโt be the last.
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