$7.8 Billion in Airline Rewards Gets More Flexible

Airline loyalty points are becoming more flexible as airlines offer customers greater choices over utilizing their accumulated rewards, PYMNTS reported on October 2. American Airlines announced that AAdvantage members will soon be able to combine miles with cash when purchasing tickets, allowing them to select how many miles to use at checkout and pay the rest in cash.

United Airlines and Delta Air Lines already provide similar options for eligible customers. Southwest also offers a Cash + Points program for Rapid Rewards members, enabling them to combine points with another form of payment. These programs make loyalty rewards more divisible, allowing travelers to use their miles for smaller purchases.

Other industries are also expanding the use of rewards, with American Airlines expanding AAdvantage redemption to gift cards and card and merchant programs offering more redemption options. Loyalty programs are broadening how points can be earned and redeemed across various shopping experiences. The balance of airline loyalty programs, which totaled around $33.4 billion as of June 30, includes miles and points bought by banks and partners, which airlines then distribute to customers, generating revenue.

In the first half of 2026, American recognized $2.2 billion in loyalty revenue, Delta recognized $2.3 billion in passenger revenue from loyalty travel awards, United recorded $1.9 billion, and Southwest recognized $1.4 billion. More flexible redemption gives consumers additional ways to use their loyalty balances, addressing concerns from cardholders who face difficulties redeeming rewards due to insufficient points or lengthy redemption procedures.

Cash-plus-points lowers one barrier by allowing consumers to redeem rewards in smaller increments without needing enough points to cover the entire purchase. This increased liquidity offers consumers more choices, enabling them to accumulate miles for larger awards, use smaller amounts for tickets, or even spend rewards elsewhere, depending on the program.

For airlines, these decisions impact the redemption of billions of dollars in outstanding loyalty obligations while continuing to generate billions from card partners. Greater flexibility makes more of an accumulated balance usable for consumers.