According to recent news reports, US airlines are negotiating with major card-issuers to have the banks pre-buy miles. Most airlines have been hit hard by Covid-19, grounding as many as 70% of flights—and putting the industry in desperate need of cash. Card-issuers would buy airline loyalty points and link them to card spending as an incentive to drive card use. The proposed deal would see card-issuers pre-purchase large volumes of points at discounted prices.
Should deals between card issuers and airlines go through, expect to see an increased number of innovative card-linked offers tied to airline miles. Banks have seen a decrease in card spending and are likely to use lucrative airline loyalty miles to reverse the trend, including making card-linked offers that tie loyalty mile-earning to e-commerce.
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