The first airline loyalty program was launched in 1981, when American Airlines introduced a way to reward repeat travelers. At the time, the U.S. airline industry had just been deregulated, unleashing a wave of competition. New carriers offered lower fares, often due to leaner operations. In response, legacy airlines needed a way to retain their customer base and defend market share.
Inspired by price stamps used in retail, American Airlines developed a frequent flyer program to reward repeat travel—and the concept of airline loyalty was born.
How airline loyalty programs evolved
In its earliest form, loyalty was all about miles flown. The more you flew, the more miles you earned. But there was a catch: you had to redeem those miles within a year. United Airlines changed the game by removing that time limit, sparking a wave of innovation. Airlines soon introduced status tiers, offering more perks to higher-status travelers. Then came a pivotal shift: rewards started to depend not on distance but on dollars spent. Miles transformed into a form of currency. Banks began purchasing miles in bulk and offering them to credit card customers. Loyalty programs evolved from marketing gimmicks into massive profit centers — sometimes becoming more valuable than the airlines themselves.
Gen Z travelers are changing the loyalty equation
A new generation of travelers is now shifting expectations.
Gen Z is emerging as a powerful force in travel, and they’re not buying into loyalty the way previous generations did. Only 65% of Gen Z are enrolled in airline loyalty programs, compared to 70% of Millennials, 80% of Gen X, and 89% of Baby Boomers. This generational gap signals a looming disruption in the loyalty landscape.
Why the disconnect? Gen Z cites several key pain points:
- 61% report inconsistent travel with a single airline
- 14% slow reward redemption
- Only 17% of loyalty members under 30 believe the rewards are worth it, compared to 30% of those over 50
Traditional loyalty programs were designed for frequent business travelers and brand-loyal consumers. Gen Z, on the other hand, prioritizes flexibility, instant gratification, and personalization. They travel differently — often mixing work and leisure, hopping between carriers, and seeking experiences over transactions.
What comes next: gamified loyalty experiences
To stay relevant, airlines must adapt. One compelling approach is to apply gamification–designing loyalty programs with elements of play, progress, and reward.
Borrowing from the gaming world, airlines can create engaging, goal-driven experiences. Think progress bars, unlockable perks, surprise-and-delight bonuses, and community-based challenges. Instead of waiting months to see rewards, travelers feel a sense of progress every time they fly.
This model still uses points as the primary currency but layers in micro-rewards that deliver more frequent engagement. Travelers receive feedback and gratification each time they interact, creating momentum and increasing brand connection.
Technology enablers for gamified loyalty
To make this model effective, airlines should consider the following technology enablers:
Real-Time Loyalty Engines
Enable micro-rewards for specific actions taken throughout the journey — like checking in early, scanning a boarding pass, purchasing in-flight services, sharing post-flight feedback, or skipping printed receipts to support sustainability goals. These instant “wins” reinforce the behaviors airlines want and keep travelers engaged and coming back.
Digital Badging
Offer travelers unique digital assets or badges tied to specific achievements, such as “5 cities in 5 months” or “Red-Eye Warrior.” These can unlock exclusive content, priority perks, or co-branded partner rewards. Think collectible, brag-worthy, and shareable. This is similar to achieving a fitness milestone on your Apple Watch fitness app, and you get a badge that can be shared on social media or other friend groups.
Social Media Integration
Turn loyalty into a social experience by encouraging travelers to share how they’ve earned or redeemed miles, unlocked new ranks, or reached travel milestones. Reward them for tagging the airline or referring friends. Just like users share Spotify Wrapped or Wordle streaks, these social moments boost visibility, foster friendly competition, and organically grow program participation.
Mobile-First Loyalty Design
Today’s loyalty should live where Gen Z lives: on their phones. A modern mobile app experience should show interactive progress, trigger dynamic milestone reminders, and feel more like a fitness app or mobile game than a static loyalty dashboard. Visibility and momentum are key.
What other industries teach us about engagement
Gamification is not new. In healthcare, it has helped improve user participation and outcomes.
In 2023, UnitedHealthcare launched UnitedHealthcare Rewards, a program that offered up to $1,000 a year for completing simple health activities, like walking, tracking their sleep, or going paperless with billing. The program connects with fitness trackers and smartphones, turning small healthy choices into chances to earn real rewards. Similar approaches in healthcare have led to people being more active and even helped lower healthcare costs. For airlines, this shows that loyalty doesn’t have to be limited to flights. Small wins throughout a customer’s journey can keep people interested and coming back.
Why loyalty needs a new definition
Airline loyalty programs were once designed to reward frequent travelers. But to remain competitive, they must evolve into experiences that meet customers where they are.
Gamification isn’t just about points and prizes. It’s about creating an emotional journey that gives travelers a reason to stay engaged, even when they’re not flying. When done right, it builds brand affinity that goes beyond rewards — it builds community, identity, and fun.
Airline loyalty started as a way to incentivize repeat travel. But to stay relevant, it needs to evolve into a personalized, rewarding journey in and of itself.
The future of loyalty is interactive, personal, and mobile
Gen Z isn’t rejecting loyalty. They’re demanding that it meet them where they are.
Airlines that embrace gamified loyalty experiences can differentiate themselves in a competitive landscape and build stronger bonds with the next generation of travelers.
In the 1970s, airlines competed on price. Today, the next frontier is loyalty, and that just might be the industry’s biggest opportunity in decades.
It’s time to rethink loyalty. Airlines that act now have the chance to lead the next era of customer engagement. Start by piloting gamified experiences that deliver instant rewards, foster community, and meet Gen Z on their terms: mobile-first, playful, and personalized. Don’t just reward travel—make every interaction part of the journey.
