> In short, SkyMiles is no longer a frequent-flier program; it’s a big-spender program.
This is probably how frequent-flier programs should have been run in the first place. Airline don't care that you fly alot, they care that you are a profitable customer.
That means business customers and the wealthy will still be their main clients. This just means they lose the churners and the price sensitive bargain hunters, which almost every airline would be happy to trade away for more business customers.
It's a win for the airline as they keep their core customers happy as their rewards won't change and they'll lose the unprofitable customers who used their rewards programs alot without spending much.
> A 2020 analysis by the Financial Times found that Wall Street lenders valued the major airlines’ mileage programs more highly than the airlines themselves. United’s MileagePlus program, for example, was valued at $22 billion, while the company’s market cap at the time was only $10.6 billion.
This looks alot like car companies whose leasing arms became more profitable than their manufacturing arms for part of the 2000s.
But wallstreet loves companies that they can easily value and this "conglomerate" style business has been out of favour for a while now.
Sooner or later some airlines will spin out their rewards business into a separate company to get the maximum valuation from it. Just like how deregulation lead to the consolidation of airlines, I wouldn't be surprised to see only a couple of rewards programs that every airline uses in a decade.
As usual PE will be the winner. I'd bet Blackstone or Apollo will roll up multiple programs into one or two uber rewards/credit card programs that are spun out into public companies. VISA and Mastercard won't care who owns them. As long as it drives more credit card usage, they'll be on board.
>That means business customers and the wealthy will still be their main clients.
I think you're grossly overestimating the fallout from this. I am the aforementioned business customer. Literally the only way you'd ever hit the dollar amounts they're looking for is flying multiple times across the Atlantic paying full fare business class - which I don't do. But I do fly multiple times a month across the continental US. Previously I would book Delta regardless of price for both business and personal travel due to status. They've made it basically unobtainable unless you're paying full fare first class on every flight AND booking your cars and hotel through them.
Going forward I'll just book the cheapest flight available and drop their card. They will be losing at minimum 10s of thousands a year in profit from my travel and card spend alone.
Merchant credit card fees are at most 3%. I doubt airlines pocket a big portion of their branded cards’ fees as profit, and I would bet they get less than even 1%. The vast majority of the fee probably goes to the banks and card networks.
Even assuming 1%, for an airline to lose $10,000 in profit, you would have to be spending $10,000 / 0.01 = $1M per year on that credit card.
And if you are spending a minimum of $1M on your credit card per year, I doubt you are spending your time optimizing “miles” and “points”.
I assume there are lots of smart people working at airlines that can work out which of their policies earn and lose money, especially now that all the competition is minimal except on the most popular routes.
>Even assuming 1%, for an airline to lose $10,000 in profit, you would have to be spending $10,000 / 0.01 = $1M per year on that credit card.
I think you missed the part where they're losing ALL of my business, including dozens of flights a year.
>I assume there are lots of smart people working at airlines that can work out which of their policies earn and lose money, especially now that all the competition is minimal except on the most popular routes.
I assume they think customers with lots of miles banked won't go through the effort of dropping them entirely. I think they're wrong.
When you're losing customers that have million miler+ status, you've made a pretty poor decision.
> I assume they think customers with lots of miles banked won't go through the effort of dropping them entirely. I think they're wrong.
I agree with you on this. Nobody who flew Delta did it for the value of SkyPesos anyway. The airline miles on Delta have historically had the lowest value among US major carriers and that hasn't gotten any better, so frankly I have no issue giving up my miles. I flew Delta for better hard product and a better set of co-brand + FF perks. By changing the latter, the difference on the former is mostly ameliorated, and the miles are basically meaningless. At most a skypeso is worth maybe 1 cent. A million skypesos is only worth $1k in EV, and that's being generous. A one-time cost of $1k that isn't even a fully realized loss (I can always use the miles later without seeking status) is nothing compared to the betrayal of the program changes.
Mostly agreed, but still ... I used to fly United/American from PHL to LHR all the time because .. well, its a hub city and I lived there and they were the best deals and had convenient departure times for the transatlantic crossing.
Then I moved to New Mexico, and found that Delta was the obvious choice for getting to London from here. And OMFG ... the difference in the product was just spectacular. Seats. Food. Movies. Uniforms. Air quality (not kidding). Probably will still use them when I do this journey.
Domestic flights it's a big difference, but for international flights if you're in Polaris at the front of the bus, United is actually better than Delta, although the United food is pretty horrid even in Polaris. The best news though is with United you can fly Turkish Airlines, Lufthansa, or Singapore Airlines on United. Singapore Airlines has the best business class hard product in the world. United and their partners also heavily operate 787s, which are great for noise and air quality.
United domestic routes are disgusting though. Most of the planes are falling apart CRJs without IFE and WiFi, and if they do have WiFi they charge you for it, and the domestic United staffers are not good. I would put United service quality on-par with Spirit or Frontier. Easily the worst in the big 3.
That said, I'd still rather develop status on United, take directs, and then fly Polaris full-fare or Singapore Airlines biz class for my personal / international trips now that Delta has made these changes to the medallion program.
I guess we will have to let it play out and see. I’ll take the bet that the same airlines that exist today will be there earning the same measly profit margins in 10 years (except JetBlue, which may not be around).
10 years ago there was USAirways and Continental, and Northwest a little before that. Reduced competition buoys the remaining survivors, but the history of bankruptcies in the industry certainly lends quite a bit of doubt towards your assumption.
The assumption is that as they become fewer, the ones that remain gain staying power. Which is why I excepted JetBlue since they could get sold or fail, I think they are hoping their Spirit purchase goes through.
Crazy to think JetBlue wanting Spirit. I remember when JetBlue started, their goal was to provide a better experience than all the other airlines. It is really a cutthroat business. Virgin Airlines had to be folded into Alaska too.
I think in many cases they are just buying routes/gates. If the airports are maxed out in gates how is the company supposed to grow? And a company that doesn’t grow is a “bad” company, or at least management doesn’t get paid as well for high profitability/low growth it seems
I imagine they meant the airline as a whole is losing out on the $10s of thousands due to lost loyalty resulting from removing convenience. Not just the 1%, but the whole spend is lost.
In that case, airlines have sub 5% profit margins, so $10,000 / 0.05 = $200k spend on flights before the airline comes close to earning $10k in profit.
Huh? Citation? Delta's profit margin last quarter was 12%, and that's a horrible way to calculate per-ticket profit. When I'm spending $1200 on a ticket to fly 500 miles round trip on a flight that's packed, they're making a LOT more than 12% on that ticket.
Did you actually bother to verify those links? They're wildly inaccurate. It claims Delta is making $50B/quarter??? They make roughly $13B/quarter. Your very first link claims Delta's profit margin 6/20/23 is 5.36% - it was 11.72% per their earnings report. 12/31/22 - claims 2.61%, it was 6.17%. Garbage in, garbage out.
And again, that doesn't address the fact their net profit margin has literally 0 relation to their profit margin on MY TICKET which is CONSIDERABLY higher than 11.72% on average.
And page 63/64, it seems like Macrotrends is using “net income/loss” row and the “total operating income” row, and Google is also using the same, so not sure why the quarterly figures are different. Macrotrends does look erroneous here.
>And again, that doesn't address the fact their net profit margin has literally 0 relation to their profit margin on MY TICKET which is CONSIDERABLY higher than 11.72% on average.
Yes, the delta bosses are not considering the profit margin from your specific flights, but assuming the vast majority of their business is flights where their airline miles come into play, then I figured it is a good assumption that, on average, losing a flight costs them the around the same profit margin.
Of course it is possible they lose so many flights that it cuts into their fixed costs, but I assume they are smart enough to make those calculations.
The allocation of profits down to specific activities depends on the allocation of revenues and expenses amongst activities, and all such allocations are inherently arbitrary. They depend on the stories we tell.
I worked with accounting enough to know that it is unable to provide a proper analytical framework for social or economic problems. Or, as Lenin put it, "For practical work, we need to have figures ... But we will defer the verification of the accuracy of the figures, the estimated percentage errors, etc., to a later period.”
The macrotrends graphs are clearly labeled TTM (trailing twelve months), and seem accurate to me cross-checking just a few Delta measures against published financials.
> especially now that all the competition is minimal except on the most popular routes.
I guess airlines are betting sufficient passengers have no better option, and I would bet that too. I cannot remember the last time I got to pick an airline without heavily inconveniencing myself and wasting tons of hours with extra stops. Even a busy airport like Newark, you are basically flying United for 90% of destinations if you want to get there in the shortest amount of time with the fewest stops.
You're generalizing to the overall population, but "tw04" already said he was leaving the airline, so I guess he's determined that alternatives do exist and aren't that inconvenient.
True but moreso than your average business, airlines are dependent on the revenues from the customers at the margins. In the short term, the plane needs to fly whether it's full or not. Even the lowest fare customer brings in more revenues than the added costs of flying them. It's the fixed costs that need to be spread across a plane full of passengers in order to make it all profitable.
An airline like Delta will adjust but there will be pain for them in the short term and pain for customers in the medium and long term with fewer, more expensive flights. All of this assumes these changes actually lead to customers changing their behavior rather than simply saying they will.
SkyMiles MQDs (flight spend, basically) is only 12K/yr for Platinum and 20K/yr for Diamond now, rising to 18K/yr and 35K/yr next year. IMO, the current thresholds, despite being higher than last year, are still too low, resulting in over-crowded lounges and difficult upgrades for their most frequent fliers.
Even next year's thresholds are not that high if you're crossing the continental US multiple times per month and are surely less than the flying you're doing on Delta if the loss of your business represents "10s of thousands a year in profit".
Delta's gross margin percentage is roughly 25%. For them to lose just 2 10 thousands in profit on you, you'd be spending $80K with them and doing so would continue to easily qualify you for Diamond, whereupon you'd get more reliable upgrades and service from them due to fewer people making Diamond each year.
I'm a little torn. I've never had a problem with spend, but there have been years where I didn't hit my MQMs, and just to make status, I'd fly a trans-pacific. It's giant waste for everyone involved, so I'm glad to not have to do that anymore.
I can spend $35k on flights, but I can also fly private for about the same amount, excluding most trans-oceanic. So I'm not sure what I'm going to do about next year. I'm not sure if it's really worth it. It's a weird calculus. To hit the number, it's basically buying a bunch of F/J fares. If I'm already doing that, I don't care about upgrades.
> I think you're grossly overestimating the fallout from this.
Really, I think if anything I might be underestimating the fallout from this in that I don't see it being an issue at all and I think most airlines will follow with the same changes in the future.
Since I lost all my status during COVID I changed my approach: no frequent flyer programs, far fewer flights, and only ever book first class.
No more worrying about upgrades, middle seats, air-ragers, and all it took was a little more money.
Of course now sometimes I fly on airlines I’ve never heard of whereas previously, I had taken exclusively American for my last 200 or so legs. I think the effects of shaking up these programs will be to make consumers like me much, much less brand sensitive.
Keeping in mind this was really made for business flyers who enjoy the benefits of the miles personally for a ticket paid by the employer. I guess the switch creates an incentive for those travellers to go for the more expensive flight, not sure how that will go with employers.
To be honest the whole approach always felt like some form of corruption/kick back to me. You give an incentive to the employee that is dissociated from the interest of their employer.
As someone who has employed many people that need to fly a lot I encourage it. Frequent travel can lead to quick burnout because of the constant stress of being in an unfamiliar place and interfacing with people you don’t know. It’s important to add as much consistency as possible to these experiences. So airlines and hotels bring the same help a lot. You don’t have to think about it and the subconscious mind is not at stress about it. You can focus on your work.
There’s indirect benefits to the business as well since they’ll be first to be put on a flight after cancellations, can get guaranteed lodging in areas that sell out often, and can use their points to upgrade making their trip nicer.
So it’s unwise to chase that as an employer. Let them get points and be comfortable and use them to take the family somewhere.
Exactly - traveling for work can be fun for a year or two, but once the novelty wears off it's just tiring and stressful. Having preferred status with airlines and hotels makes things much more bearable, and all the miles that you rack up can be spent on the occasional trip with your partner, who has to endure you being away from home so often.
Even as much as knowing there will be a bottle of water in your room or what type of meals will be served on your flight make a huge difference. It’s one less thing to think about. There’s a lot of these types of things and being a regular is important. I’m grateful I did my turn of it when SPG was still a thing. Damn they treated us well.
> the constant stress of being in an unfamiliar place
Is this a thing for most people?
Being in an unfamiliar place is one of my greatest joys. I am never more relaxed than my first day in a new city where I know absolutely nothing, and turning each new corner is a revelation.
> You give an incentive to the employee that is dissociated from the interest of their employer.
This is mitigated by the employer setting rates, per-diem, rules on what seats you can purchase, etc. and the employer can't use the points from the frequent flyer program anyway. If there's, say, a $50 fare difference and that causes an employee to choose a more expensive flight (because the comparable flights are comparable) because they get points it's fine and basically an added benefit. In consulting for example that's a stated benefit in employee handbooks.
Of course that's not to say employees of companies can't go against the interest of their employer here, but it's up to the employer to set guidelines and for the employee to follow them.
>and the employer can't use the points from the frequent flyer program anyway
This isn't always true. Some employers insist you book through their internal travel department or use their corporate FF accounts, which kick all the mileage and hotel night benefits to them. It's not common, fortunately, but it does happen.
Yep I was just going to say I'm flying and staying in a hotel for a conference next month and although I have loyalty programs with the airline and the hotel I am getting zip for those because I had to book through my employer's travel system.
Some of those companies have discovered that those travel departments are a profit center and so they can make more money by booking the most expensive economy seat.
Many government-type travelers are obligated to go with the cheapest airfare that’s reasonable. I know folks who take 5:30am Delta flights so they can get loyalty benefits while obeying those rules, but these new spending levels makes gaining status that way impractical.
Due to technology, the old use case of banks is mostly obviated. There is no technical reason everyone should not just have an electronic money account at the Fed itself for receiving and sending money. And earn the federal funds rate directly rather than have it go through a middleman who is basically just operating a database.
And lending does not have much to do with receiving people’s cash deposits.
>There is no technical reason everyone should not just have an electronic money account at the Fed itself for receiving and sending money.
Yet you complete leave out the non-technical reason why that's a terrible idea.
Systemic Single-Point of Failure, extreme vulnerability political exploitation, no robustness or process/partition based discorrelation to stave off or slow down financial contagion.
Robustness is entropic. It uses more energy, but gains in it's ability to remain up in the face of a myriad of quantifiable stimuli instead of falling apart at the slightest touch.
All eggs in one basket is a bad idea. No one makes a good enough basket.
There is an opportunity cost to letting that money sit and not work, and therefore companies trade use of money now for a gain later (lending money or investing).
The more successful, the larger the pile of money and more likely to look bankish.
> deregulation lead to the consolidation of airlines
Explain. I see a handful of identical mega corps with a government protected monopoly (regulations + access to airports). Hasn't regulation increased consolidation to share the cost of compliance?
Like the pork barrel shops in the airport, why is this a private business at all?
I presume they are referring to the airline deregulation act of 1978. There used to be dozens of regional airlines whereas now we notably have 3-4 giant corporations after decades of aggressive mergers and acquisitions.
You’d be surprised but there are still regional airlines. This is because a company like delta franchises some routes basically. You might go on a delta flight and ride on a delta plane, but the operating company is some almost unheard of regional one.
I’d guess also you wouldn't have to handle the maintenance end of these smaller planes eg. your bombardiers and what have you if you’ve spun off all those flights
>I see a handful of identical mega corps with a government protected monopoly (regulations + access to airports)
I see the opposite: new, brightly-colored airlines seem to pop up every year, each offering substantially the same thing: sub-$100 direct tickets to Florida (and probably other) destinations from low- and mid-tier airports. And they're all catering to the people who these rewards programs are shedding.
GP is referring to the deregulation of the late 1970s. Before that, there were a large number of smaller regional airlines in the US, that have since mostly disappeared.
That's the nature of financialized business, isn't it? Since they're only gaming the numbers, there isn't anything of substance happening when they spin out rewards this year, and reacquire it the next.
> deregulation lead to the consolidation of airlines
Assuming you're talking about the 1978 deregulation, I don't think that's the cause. Starting around about the same time (maybe under Reagan?) the US basically stopped enforcing the anti-trust laws that are on the books. This has led to mergers across the board, not just for the airlines.
I've been a United "Global Services" customer for years. How to you reach this level? Spend! The threshold--which they don't publish--is around $75K/year spend gets you into it, adjusted a bit for region and VIPs.
>Sooner or later some airlines will spin out their rewards business into a separate company to get the maximum valuation from it.
Isn't this effectively what we have with Chase, Amex, Capital One, and Citi? Each earns points that can be used directly or transferred to airlines and hotels.
And then as further evidence, Avios points can already be used across several airlines (BA, Iberia, Aer Lingus, Qatar, and soon Finnair). Not to mention the ability to book flights on different airlines with miles sometimes (eg booking Delta from KLM).
>Isn't this effectively what we have with Chase, Amex, Capital One, and Citi? Each earns points that can be used directly or transferred to airlines and hotels.
Not really. Those companies aren't sellers of points, they horse trade the interchange fee. They're basically giving away a portion of their revenue just to stay competitive.
If I have the monopoly of buying miles from airlines at 1c/mile and then sell them to co-branded credit card companies for 1.3-1.5c, what I have is a fucking license to print money.
> That means business customers and the wealthy will still be their main clients.
I am both of those things, have held status with Delta for a number of years along with a co-brand credit card that I run $60k-$100k/yr through. I typically take 15-20 trips per year, and when I'm /not/ flying on business I only fly first class/Delta One. The new program means where formerly I was always PM/DM each year in status, I would be lucky to hit GM without greatly changing my spending habits, and the lounge changes massively devalued even carrying a co-brand card. I live in a competitor's hub (Denver) and chose Delta over the competitors specifically because of better quality of hard product, better on time rates, and a good co-brand program with Amex (who I'm a loyalist for).
I am actively investigating alternatives, and at this point am likely to cancel my Delta Amex (I'm keeping my Amex Plat of course) and switching to the United Club Infinite card as my primary travel card / credit card. Delta makes more money from their co-brand relationship with Amex now than they do from operating flights, and they're losing both of my business because of these changes.
Business travelers almost only get booked into economy/main cabin in the US, because of corporate policies and no health and safety regulations in the US requiring higher tiers of service for long flights (EU residents generally get booked into business for transatlantic flights for healthy and safety reasons, DVT is no joke). Being able to maintain status off a reasonable amount of travel and co-brand spend so I get upgraded into FC on business flights and can buy FC with some perks on personal flights is the core value proposition of airline frequent flyer programs. Delta just killed that for their core customer base. To be clear, I had already bought 6 Delta One tickets for next year, and I haven't even booked my end-year trips yet. I purchased 7 Delta One tickets this year and 6 domestic First Class tickets, I'm also on track to run $90k through my co-brand card this year.
They're losing a not inconsequential amount of business with my departure to United, which when they're finished will have over 100k sqft of lounge space in the Denver airport, plus a Polaris lounge, and offers unlimited lounge access with their top-tier cobrand card and I can attain status even /easier/ than the /current/ medallion program, much less the new one. With this change the only advantage Delta gives me for having to eat a connection on every domestic flight to go through SLC/ATL/LAX/JFK, is that they have free wi-fi on board. That's great, I guess, but I hardly ever even use it, I'd rather unplug and read a book while I'm in the air. The hard product is marginally better on domestic Delta flights, but Polaris is actually better than Delta One anyway, and United has better international partners in Star Alliance, like Singapore Airlines, than Delta does (although I do love KLM).
I find the changes in the medallion program to be incredibly short-sighted, and I am expecting it to backfire horribly. Delta built a lot of brand loyalty with travelers. People like me who will choose Delta over anyone else even though I'm in a non-hub location and it implies always eating a connection, partly because the Sky Clubs were high quality lounges, broadly available even in non-hub sites, and they had a solid FF program w/ good co-brand perks. They've just lost most of their advantage except their operational quality, which also has taken a nosedive post-pandemic. Explain to me why I would choose Delta over United, when I live in a United hub and get can get better perks on the co-brand card, for someone who can afford to pay for multiple full-fare business-class international tickets a year?
I was never quite at the level of spend that you were reaching, usually straddling silver/gold medallion with my own travels, but my use cases and takeaway are the same as yours: realistically, this change means I have no reason to prefer Delta on brand loyalty grounds for either business or personal travel. On domestic travel, I'd occasionally mix airlines for scheduling reasons regardless. But what this really means is I'll no longer prioritize getting in those long haul international flights on Delta or a partner airline because it helped secure status.
Its stunning to me that these changes have managed to alienate so many people across the spectrum. Its not just the higher barrier to entry for the lowest tier that is earning complaints. The value of the miles earned was always much less important to me than the value of the occasional upgrades the status provided, or very occasionally the special support phone lines.
Perhaps the reality for the program really is that only the "whales" matter. We certainly see that play out all over the software industry. But if that's the case, it sure changes my porpoise-sized travel habits. My loyalty will now be to Amex moreso than an individual airline.
You and I seem similar in travel and Delta medallion status.
I'll enjoy my last year with GM in 2024 I guess.
Of the options I have for BOS <> SFO, Delta still probably has the best hard product offering there. But this is definitely changing my dogged loyalty. I'll be trying Alaska soon enough. Not sure I'll ever do United again...
The points business is already being separated from the airlines; some of the “best” travel cards you can get like Chase Sapphire are not cobranded with one airline, but use a more generic points system that can convert to miles/points in many loyalty programs.
some airlines have already done this, having fully owned subsidiaries. consider Lufthansa and their "Miles and More" subsidiary.
that said, I doubt airlines will ever fully relinquish control over their loyalty programs - they are too critical to the core business and offer a 'secret sauce' of differentiation to what is an otherwise commoditized product (i.e. flying from point A to B).
>This is probably how frequent-flier programs should have been run in the first place. Airline don't care that you fly alot, they care that you are a profitable customer.
Wow, okay, big jump here buddy. What happened to being profitable and actually committed to offering a core competent service to customers?
Airlines are sub 5% profit margin businesses, with huge risk factors.
As the joke goes, “how do you become a millionaire? Start with a billion dollars and buy an airline”.
It is only recently the airline business has had steady positive years, due to consolidation, and even then, COVID hit and almost wiped them out were they not bailed out.
Source that they are they ignoring their core competency?
Modifying a rewards programs should require a very miniscule portion of ann airline’s available labor hours, and aligning rewards to be proportionate to profitability seems like a common sense business move.
Yes, often. It has been the same experience (satisfactory), except some have newer planes. Avoid buying the lowest tier pricing (stick to economy, or whatever has free carry on and lets you pick a seat).
I end up paying roughly $50 per hour of flight plus or minus, and it’s been consistent for my adult life (15+ years). Which is surprising considering inflation.
The only problems I have with flying are TSA and airport runway congestion itself.
If you're flying at all, it's likely you are going to be spending some amount of money. In reality, it would be wildly unlikely that a person could afford a $200 ticket and not a $300 one with proper planning.
It's really about the whole expereince. Once I'm on the airplane, it's usually pretty OK. The security anal exam and general airport experience of modern-day air travel is what makes it unpleasant and is largely not the airlines' doing.
But yeah I agree, if it's less than 6 hours I'll almost always just drive.
5% margins? Becoming banks? Scarce innovation in the space? Lack of cleanliness on airplanes? How depressed every other attendant seems to be these days? The safety issues we’re seeing with counterfeit parts?
That they should spend more money and lower profit margins even more? Or that they should increase prices so that they can spend more money to improve the things you listed?
Surely, airline employees are more knowledgeable about how much customers are willing to pay than non airline employees.
They should be broken up to increase competition. European (and asian) airlines provide better service at lower cost. The US airlines get bailed out every 10 years and so there is no incentive for them to improve their companies at all.
Banks are the convergent evolutionary endstate of business, much like crabs are observed to be somewhat of a hobby of Nature in terms of the end state of evolution of many crustacean species. Or the capacity to send email is the evolutionary end state of software. Or politics is the end state of most fotms of online rhetorical discourse.
There is one step, and it is bank (Past a particular threshold).
This is probably how frequent-flier programs should have been run in the first place. Airline don't care that you fly alot, they care that you are a profitable customer.
That means business customers and the wealthy will still be their main clients. This just means they lose the churners and the price sensitive bargain hunters, which almost every airline would be happy to trade away for more business customers.
It's a win for the airline as they keep their core customers happy as their rewards won't change and they'll lose the unprofitable customers who used their rewards programs alot without spending much.
> A 2020 analysis by the Financial Times found that Wall Street lenders valued the major airlines’ mileage programs more highly than the airlines themselves. United’s MileagePlus program, for example, was valued at $22 billion, while the company’s market cap at the time was only $10.6 billion.
This looks alot like car companies whose leasing arms became more profitable than their manufacturing arms for part of the 2000s.
But wallstreet loves companies that they can easily value and this "conglomerate" style business has been out of favour for a while now.
Sooner or later some airlines will spin out their rewards business into a separate company to get the maximum valuation from it. Just like how deregulation lead to the consolidation of airlines, I wouldn't be surprised to see only a couple of rewards programs that every airline uses in a decade.
As usual PE will be the winner. I'd bet Blackstone or Apollo will roll up multiple programs into one or two uber rewards/credit card programs that are spun out into public companies. VISA and Mastercard won't care who owns them. As long as it drives more credit card usage, they'll be on board.