The End Of Pretend Loyalty

David J. Danto

Travel thoughts in my own, personal opinion

eMail: ddanto@IMCCA.org Follow Industry News: @NJDavidD on

When Pretend Loyalty Stops Paying – November 2025

If you’ve ever wondered why airlines treat their passengers like an inconvenience rather than a customer, here’s a hint – their real customers aren’t sitting in 23B. They’re sitting in glass-and-chrome bank towers approving credit-card marketing budgets. For years, the big carriers have relied on selling miles to banks as one of their most profitable engines – often propping up core flying operations that would struggle to turn a profit on their own. Actual customer loyalty hasn’t mattered in ages – not to them, anyway. The frequent-flyer program became the product, and you and I were simply the cost of goods sold.

The numbers never lie. The banks buy billions of miles from airlines to hand out as sign-up bonuses, spend multipliers, and “free” travel perks that sound generous until you actually try to redeem them. Airlines issue these points for pennies and treat them as pure profit. Then they pack flights tighter, slice elite benefits thinner, and act shocked when passengers realize their loyalty doesn’t matter. Loyalty was replaced by a financial instrument – a curious hybrid of monopoly money and Wall Street derivative – and it worked spectacularly for the airlines. Right up until now.

Because here’s the twist – the credit-card world just hit turbulence. There was just a big settlement between card networks and merchants waiting to be approved. One of the key changes is that vendors who accept credit cards will now be able to treat different cards differently. They can reject or surcharge high-fee cards like premium “Infinite” or “World Elite” tiers, even while accepting others in the same network. Think about that. For years, the magic formula held steady: airlines sold miles to banks, banks sold “free travel” fantasies to consumers, and merchants paid quietly in the background. But now merchants have permission to look at that high-fee affinity card and say, “No thanks.” And the moment merchants start saying no, the entire loyalty-inflation economy begins wobbling like a Max 8 in a microburst. You might even see some cards declined at stores where they once worked fine, creating a new, confusing layer of “tier discrimination” for consumers.

If banks can’t push the expensive travel cards everywhere, they can’t justify buying miles at the same rate. If they buy fewer miles, airlines lose one of their biggest profit engines. And remember, that engine is far more important to the airlines than your loyalty to them – or the pretend loyalty they offer back. Even if fee reductions wind-up being modest, the strategic shift is what matters – the economic assumptions that propped up loyalty programs are now officially in play.

This shift could finally expose how fragile the mileage universe really is. Loyalty programs have always been a bit of a Ponzi scheme – airlines minting a currency they can devalue at will, customers hoarding points that lose value faster than any airline’s on-time departure promises, and banks footing the bill so everyone can pretend they’re getting something for free. But if merchants stop funding the cycle by rejecting those pricey rewards cards, the illusion collapses. And when that collapse comes, expect a lot of passengers to learn that the miles they’ve been earning, saving, cherishing, and bragging about were never a promise – they were a marketing tactic.

The fallout won’t be pretty. As the loyalty gravy train slows, airlines will do what airlines always do – raise fares, add fees, create new “preferred” categories, sell everything that isn’t bolted down, and maybe a few things that are. When the credit-card revenue stream weakens, the airline industry won’t magically become more customer-friendly. They’ll squeeze harder. The champagne will still flow in the boardroom, but out at the gate the boarding group numbers may go from nine to nineteen. And don’t look for the credit card issuers to provide relief. Their fees will likely go up as a result as well, as they get less revenue per transaction in the new deal.

But here’s the silver lining: when a system built on fantasy money stops working, sometimes reality improves. Maybe airlines will finally rediscover the long-lost concept of actual loyalty – you know, rewarding people for repeatedly choosing their product. Maybe miles will become simpler, more transparent, more predictable. Maybe the programs will go back to being benefits rather than balance-sheet assets. Maybe...

OK, I’m sorry for that momentary fantasy. I know that will never happen in our lifetime. These companies make the pre-ghost Scrooge look like an angel. After all, this is the same industry that is currently arguing in court that a window seat without a window is still, somehow, a window seat. So yeah, we all will get less for more. Surprise, surprise.

What is clear is that a major shift is coming. If this settlement is finalized, it would crack the foundation of one of the most profitable financial partnerships in travel history. For decades we’ve lived in a world where the make-believe loyalty narrative propped up a very lucrative mileage scheme. Airlines haven’t been honoring loyalty for years. Instead, they’ve been taking cash from banks and handing out IOUs for future travel that they can devalue whenever they want – and that they hope most people never redeem. That whole era is ending. And whether airlines like it or not, the sky-high fake-loyalty cash cow is now plummeting from thirty-thousand feet back toward earth in a ‘… we’d better foam up the runways…’ kind of hurry.

If you’ve been saving your points for that dream trip to Tokyo, now might be a good time to book it before the value evaporates faster than it already did. Because when this house of (credit) cards finally collapses, the only thing left soaring may be the ticket prices.

After decades of candid travel commentary – from loyalty program “magic tricks” to hotel check-in roulette – I’ve decided to turn some of that honesty into apparel. These aren’t novelty shirts; they’re the exact truths every road warrior wishes they could say out loud. Whether you’re quietly muttering “My loyalty points devalued while you read this shirt” or admitting “If delays build character then I’m the whole movie’s cast” you’ll find plenty of familiar sentiments… and more. Everything is produced by a reputable outfit, with black tees that work under a sport jacket plus hoodies and wicking travel gear for life on the road. The site also has my honest and snarky takes on technology trade shows. Take a look at Tinyurl.com/TechAndTravelWear. Even if you’re not buying they’re fun to read and commiserate – and if you do buy something, maybe I’ll break even. If you want a style you don’t see, just email me and I’ll add it.

This article was written by David Danto and contains solely his own, personal opinions.

All image and links provided above as reference under prevailing fair use statutes.

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As always, feel free to write and comment, question or disagree. Hearing from the traveling community is always a highlight for me. Thanks!