How Airlines Quietly Became Banks
Why Hacker News recommends it
HN commenters point to it whenever airline economics or frequent-flier miles come up, since it clearly shows loyalty programs are worth more than the airlines themselves.
What it is
A Wendover Productions explainer arguing that major airlines make much of their profit from loyalty programs and co-branded credit cards rather than flying. It frames airlines as quasi-banks that sell points in bulk, using United's pandemic-era loan as a hook.
Recommended by 5 HN commenters across 3 different months, 2021 to 2026.
What Hacker News said
Strong rec somethingsidont · 2023-09 · on “Airlines Are Just Banks Now”
One of my favorite YouTube videos on this subject: [this video] Key point: airlines are more powerful than normal banks - they are central banks, with complete control of the money (point) supply. On the trilemma [0], they chose to control the exchange rate (points to flight value) and have an independent monetary policy (how many points to issue to flyers or other buyers). [0] [LINK]
Recommends hourislate · 2022-02 · on “Things Delta told the SEC about its SkyMiles program”
Wendover Productions has a video on how airlines are banks now. Their Loyalty Programs are worth several times more than the Airlines and flying is basically a secondary business for them. How Airlines Quietly Became Banks [this video]
Recommends trimbo · 2023-09 · on “Airlines Are Just Banks Now”
Wendover Productions had a good video about this, framed around United getting a loan during the pandemic: [this video]
Recommends rapatel0 · 2026-05 · on “Let's Buy Spirit Air”
Fundamental problem: Flights don't make money. Airlines actually make all of their money through loyalty programs and credit card payments. They basically should have turned into regulated utilities long ago, but loyalty program revenue saved them. Unless this initiative will turn into a credit card company (which nobody likes or wants to do) it won't go anywhere Private equity will likely sell the company for parts. There is no operational improvements for cash flow that they can do. Useful watch (skip to 2:20): [this video]
Recommends risfriend · 2026-05 · on “Let's Buy Spirit Air”
> how the major airlines now are more of a "bank that happens to have planes" Here is a decent video explaining it [this video]
Cites alpineidyll3 · 2021-12 · on “The Case Against Crypto”
There are casinos in every major place I've lived. (La, Austin, Chicago) which are negative sum games (not zero like crypto) Mileage: [this video] There are, absolutely, crypto Ponzi schemes. (And stablecoins are largely such things) However there are also valid uses of crypto/Defi. I've used them myself to send funds easily. They are enabling truly symmetrically fair exchanges etc. If you don't like crypto, don't buy it, don't mine it. Following eth 2.0 the energy usage will be minimal and it won't be harming you. Preserving positive freedoms generally and avoiding negative freedoms (constraints on others) is a good thing imo.
Cites supercanuck · 2022-01 · on “American Airlines and The Points Guy are suing each other”
One thing that has changed in the airline industry that wasn't the case when the points guy started, is that the Airline Frequent flier miles are worth more than the actual airline themselves making the airlines essentially banks. [this video]
Cites vineyardmike · 2022-01 · on “American Airlines and The Points Guy are suing each other”
It obviously causes them harm. The points are often redeemed at a discount to their regular tickets... which are often loss leaders for their points business. Most airlines lose money on every ticket, and make it up in their rewards programs. Only to lose money again on redemption. They really only make money on some of the inefficiencies.. Easy to follow source: [this video]