Loyalty programme securitisation is not a new concept, but most frequent flyer members have no idea it happened to their miles. During the COVID-19 pandemic, the three largest US carriers collectively raised approximately $25.8 billion by pledging their reward schemes as loan collateral, according to DWU Consulting and Legal 500. The question that rarely gets asked is what that means for the people who earned those points.
How Loyalty Programme Securitisation Deals Were Structured
The structure is considerably more involved than a straightforward loan agreement. When United Airlines needed emergency financing in 2020, the MileagePlus brand was not simply pledged as collateral in the conventional sense. According to a United Airlines Holdings filing with the US Securities and Exchange Commission, two newly created subsidiaries, MIPA and MPH, were established to receive transferred assets covering the programme's brands and member data. These subsidiaries took on the role of borrowing entities, with Goldman Sachs Lending Partners, Barclays Bank PLC, and Morgan Stanley Senior Funding among the lenders holding security over those transferred assets.
The SEC filing shows that United entered a commitment letter on 12 June 2020 for a term loan of up to $5.0 billion secured by MileagePlus. The airline ultimately raised $6.8 billion against the programme, as both DWU Consulting and Legal 500 confirm, and the SEC filing records that United valued MileagePlus at approximately $21.9 billion, calculated by multiplying 2019 EBITDA by twelve.
Legal 500 reported that Delta initially sought $6.5 billion from its SkyMiles transaction, but the deal grew to $9.0 billion. DWU Consulting reported that American Airlines raised $10.0 billion secured against its AAdvantage programme, making it the largest of the three transactions. The same outlet confirms that DWU Consulting reported the total across the three carriers reached approximately $25.8 billion.
Why Loyalty Programmes Are Worth So Much to Lenders
A loyalty programme is, in financial terms, a business that sells miles to banks and retail partners and redeems them against flight inventory. It generates cash regardless of whether the airline itself is profitable, which makes it attractive security for lenders who need certainty of repayment.
The scale of what this financing represented becomes clear in the SEC filing. United projected that its total available liquidity would reach around $17 billion by the close of Q3 2020, with the MileagePlus transaction sitting at the heart of that calculation. Separately, the filing notes that up to $4.5 billion was expected to be accessible through the CARES Act Loan Program, to be secured against slots, gates and routes. That the loyalty programme commanded a higher valuation than the airline's physical infrastructure speaks volumes about where lenders saw the real value.
Delta and American pursued comparable approaches. Legal 500 reported that American raised $2.5 billion using its New York and Heathrow slots as security, then followed that with a further $1.2 billion backed by its brand and domestic slot portfolio. Delta's route to the SkyMiles transaction began earlier: Legal 500 also reported that in April 2020 the carrier had already secured $5 billion through bonds and loans collateralised against its slot holdings at New York airports and Heathrow, before turning to its loyalty programme for the larger raise.
What Members Actually Own
Here is the structural point that matters most to passengers. When you earn miles, you are accumulating a contractual entitlement governed by the programme's terms and conditions, which the airline can amend. You are not a creditor, and you hold no security interest in the assets that your airline just pledged to Goldman Sachs.
In the event of a bankruptcy, secured lenders rank ahead of unsecured creditors, and passengers holding unredeemed miles typically fall into the unsecured category. You can explore the financial and operational background of carriers using our Airline Search tool, which covers the major US and international operators.
This is not a risk that exists only in the abstract. Edward Hasbrouck, writing for The Practical Nomad, reported that Spirit Airlines held the unwanted distinction of being the largest US-based carrier operating under bankruptcy protection as of 2025. Spirit's predicament serves as a pointed reminder that airline collapses are a genuine possibility, and that frequent flyer balances can become entangled in the process when they occur. The speed at which aviation-linked financing can deteriorate is equally striking: our own reporting on the 777 Partners fraud shows just how rapidly such structures can fall apart, and on what scale.
How the Landscape Has Changed Since 2020
The pandemic-era deals were always intended as temporary emergency structures, and some have been unwound. DWU Consulting reported that United's MileagePlus term loan was retired by a prepayment in July 2024 and the notes were redeemed in July 2025, effectively returning the programme to its pre-pandemic structure.
Delta and American have moved more slowly. DWU Consulting reported that both carriers still carried loyalty-secured debt as of 2026, and that both amended their structures again that year. The scale of the original transactions means that unwinding them is a multi-year process, not a switch that can be flipped.
The Bottom Line for Frequent Flyer Members
Loyalty programme securitisation did not change what your miles are worth today, and in most scenarios it never will. But it does illustrate a structural reality: frequent flyer programmes are worth more to lenders than many passengers realise, and that value is built on a legal framework that prioritises financial creditors over member balances in a stress scenario.
The practical implication is straightforward. Miles sitting in an account have no redemption value until they are spent, and the terms under which they can be spent remain at the airline's discretion. The closer an airline is to financial difficulty, the more urgently that logic applies. Watching how Delta and American manage the remaining loyalty-secured debt over the coming years will tell us a good deal about how airlines balance the interests of lenders and members when both are in the same room.
This article draws on information from U.S. Securities and Exchange Commission (United Airlines Holdings filing) and reporting by DWU Consulting, Legal 500 and Edward Hasbrouck / The Practical Nomad.
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