No, airlines wouldn't be operating at a loss without loyalty programmes

Few things trigger us more than the old wives’ tale that airlines only make money from loyalty programmes and don’t make money from flying. The tale has several variations and sequelae, and generates a range of misconceptions. Some of this stems from a poor understanding of the airline business by commentators, but it mostly stems from a poor understanding of financial accounting practices.

This isn’t to say that loyalty programmes aren’t an immensely important and profitable part of the airlines business, but it’s become a hit-and-run critique of specific airlines and the industry as a whole. We wanted to tackle this question in a sober manner by outlining the financial accounting practices of airline loyalty programmes, not just to dispel the myth, but also to allow readers to better appreciate the actual importance of loyalty programmes.