Lufthansa’s Miles & More loyalty program is being monetized as a high-margin profit center, revealing its role in offsetting pressure on core airline earnings
Executive summary: Lufthansa has begun emphasizing Miles & More as a key profit driver, with internal analysis showing the loyalty program generates significant earnings through partner commissions, point sales, and ancillary services. The program’s profitability helps stabilize Lufthansa’s overall earnings amid cyclical pressures in aviation, but may lead to tensions with customers if perceived value erodes due to devaluations or higher redemption thresholds.
Who is involved: Lufthansa Group, Miles & More management, commercial partners (hotels, retailers, financial institutions), and frequent flyers participating in the program.
Likely next: Lufthansa may expand Miles & More’s financial services offerings, pursue further data licensing, or consider spinning off or partially listing the loyalty unit to unlock value, especially if investor pressure grows.
Lufthansa has identified its Miles & More frequent flyer program as a particularly profitable revenue stream, leveraging partnerships, point redemptions, and data monetization to generate earnings that exceed those from flight operations in some periods. The program’s strength masks underlying volatility in the airline’s core business, where yields and demand remain sensitive to macroeconomic cycles and fuel costs. While this shift improves overall profitability, it raises questions about long-term customer loyalty if redemption value diminishes or fees increase. The development reflects a broader industry trend where airlines treat loyalty programs as financial assets, sometimes valued higher than the airline itself.
Timeline
- — Miles & More: Lufthansa macht aus Vielfliegermeilen eine Gewinnmaschine (Handelsblatt)
Analysis — what this means
Likely next events
- Lufthansa Q3 2026 earnings release expected late October 2026, where Miles & More contribution may be detailed
- Potential announcement of new co-branded credit card terms with banking partners by end of Q4 2026
- Possible investor day presentation in early 2027 focusing on loyalty as a standalone asset
- Review of Miles & More terms and conditions anticipated mid-2027, which could affect point valuation
Sectors affected
- Airline loyalty programs
- Travel rewards credit cards
- Customer data monetization in travel
- Ancillary revenue in aviation
Regulatory implications
- EU consumer protection rules may scrutinize transparency in point devaluations (under Directive 2019/771)
- German BaFin could assess if loyalty points constitute financial instruments under MiFID II if heavily securitized
- Potential GDPR implications if Lufthansa expands commercial use of Miles & More member data for profiling
Historical parallels
- Delta Air Lines’ SkyMiles program generated over $7 billion in revenue in 2023, exceeding its operating income
- Air France-KLM’s Flying Blue contributed significantly to 2022 EBITDA amid pandemic-related flight capacity cuts
- American Airlines’ AAdvantage was used as collateral during its 2020 bankruptcy restructuring