If you dabble in the world of points and miles, chances are you’re a member of one or more airline loyalty programs. But have you ever wondered why loyalty programs started in the first place? I did. Here’s what I found out.
The very first frequent flyer program was created in the early 1970s. Devised by a marketing company for United, it gave awards to its passengers in the form of plaques and awards.
Frequent flyer programs that were closer to how we know them today began not long after U.S. airline deregulation in 1978. That’s when airlines had to market themselves more, and sometimes differently, so they could appear to be “the best,” because there was more competition for passengers’ money. So in the first decade or so after deregulation, we saw the development of:
1979: Texas International Airlines (ETA: NOT Texas Instruments. I’m a dope. Thanks for the heads up, David M.!) created the first frequent flyer program that used mileage tracking to “reward” its passengers. The program was dismantled within a year and TIA was eventually acquired by Continental Airlines, which, of course, eventually merged with United.
1980: Western Airlines created a Travel Bank – it eventually became part of Delta’s program when they had a merger in 1987
1981 was the year of the frequent flyer explosion. American Airlines’ AAdvantage program launched; its basis was to give special fares to frequent customers, although it never really got off the ground (do you see what I did there?) and eventually morphed into a more typical “miles flown” program. United’s Mileage Plus, Delta’s oh-so-creatively named “Delta Air Lines Frequent flyer Program” (later changed to SkyMiles), Continental’s & Eastern’s (combined) OnePass, and Air Canada’s Altitude programs also all launched that year. Virtually all of these programs were originally based on mileage flown, and nothing more.
1982: British Airways introduced their Executive Club
1985: Diners Club introduced the first credit card that was linked to an airline loyalty program – boy, did they open up a can of worms! 😉
1987: Southwest’s The Company Club loyalty program begins – their points were awarded based on number of trips, not how far you had flown.
Nearly all of the frequent flyer mile programs’ scope and, let’s face it, rules of earning, and resulting ability to be used, have morphed over the years (i.e., right now Alaska is the only U.S. airline that still awards miles based on miles flown, not price paid), but their main reason for being remains the same – they’re a marketing technique for you to (hopefully) be more loyal to their respective brands.
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This post first appeared on Your Mileage May Vary
9 comments
I think you mean Texas International, not Texas Instruments. 🙂 Also, Continental’s “One”Pass was called that because it was one program for both Continental and Eastern.
OMG, did I really write Texas Instruments? LOLOL! My bad. Fixed and gave you cred 😉 And thanks for the “One pass” info!
The important thing to understand is that frequent flyer programs replaced expensive, less targeted, and far less nimble forms of marketing.
Airlines used to take out magazine ads, reserved months in advance, and they’d have no way to track performance of a specific marketing campaign…!
Cool, didn’t know that. Why can’t I find that kind of stuff when I research it? 😉
wasn’t Northwest Airlines on of the early ones too? I recall getting free flights from mileage with them decades ago.
I might have been; I wasn’t paying much attention at the time (I think I flew 4 round trip during the entire decade LOL). But while I was researching, I didn’t find a whole lot about the early days of loyalty programs, least of all with most of the airlines that no longer exist (as it was, there were about 3 articles that all seemed to get their info from the same source LOL).
The BA Executive Club as a FF program did not launch until 1990.what you cited was a previous incarnation which was solely a paid lounge program and had none of the characteristics of a FF program. Also you miss out on TWA, Pan Am and Northwest here!
A significant aspect of the 1980s FF programs was to reward the individual flyers for directing their corporate travel spending onto the airline offering the FF miles. Because of that, they rewarded for miles traveled, to make it harder for corporate expense departments to claim the benefits for the corporations.
That also made it easier for the IRS to call the benefits “de minimis” even though they amounted to employers kicking in for employees’ personal travel.
Air Canada did not launch its frequent flyer program until 1984 when Government of Canada rules finally allowed these programs in Canada. The program was called Aeroplan. Canadian residents could belong to U.S. frequent flyer programs, but no one was allowed to earn credit for transborder flights or domestic flights within Canada.
Air Canada Altitude did not begin until about 2016 when it identified what had previously been the Elite status categories in Aeroplan to distinguish Air Canada status from Aeroplan status. For a while Aeroplan was owned by another entity, but has since been reacquired by Air Canada. Up to 1984