United’s potential sale of frequent-flyer stake may spur a gold rush

As United considers selling part of its MileagePlus program, other carriers are likely to consider a similar move to open a significant -- if risky -- source of capital in uncertain times. Frequent-flyer programs are among the most lucrative assets at major airlines, typically bringing in as much profit as passenger tickets. But with travel junkies hungry for miles, carriers generally have resisted selling their loyalty plans, preferring to keep the stable cash flows and steady profits they offer. The few airlines that have offloaded the programs regretted the decisions almost immediately. In-house loyalty plans have provided critical financial lifelines during periods of financial duress, allowing carriers to presell miles to raise cash and serve as collateral. United, American Airlines and Delta all raised money in 2020 to survive the pandemic by issuing bonds backed by their programs. The rationale against outright divestitures has been that these programs are innately tied to the underlying product -- air travel -- and separating them doesn’t make business sense.<br/>