$7.8 Billion in Airline Rewards Gets More Flexible

Loyalty points are becoming more liquid as airlines give customers more choices over when and how much of their accumulated rewards to spend.

American Airlines said in a Friday (Oct. 2) press release that AAdvantage members will soon be able to combine miles with cash when buying tickets, PYMNTS reported the same day. Members will choose how many miles to apply at checkout and pay the remainder in cash.

The approach is already available elsewhere. Money + Miles from United Airlines lets eligible customers choose how many miles to redeem at checkout and pay the rest of the ticket price with money. Delta Air Lines offers two distinct options, including Miles + Cash on eligible award tickets, although it isn’t available on every flight or in every market, and Pay with Miles for eligible Delta SkyMiles American Express cardholders. Southwest’s Cash + Points lets Rapid Rewards members combine points with another eligible form of payment, with redemption options starting at 1,000 points.

The programs make rewards divisible. A traveler with 5,000 miles doesn’t necessarily have to leave them untouched until the balance is large enough for an award ticket. The miles can enter a purchase today while the traveler decides how much cash to use alongside them.

Similar changes are appearing outside airline tickets. American this year expanded AAdvantage redemption to gift cards, while card and merchant programs have been expanding ways for consumers to apply rewards during purchases. Loyalty programs are broadening how points can be earned and redeemed across shopping journeys, PYMNTS reported June 30.

Redemption Moves Billions of Dollars Through Airline Books

American, Delta, United and Southwest carried about $33.4 billion in loyalty-related deferred revenue or liabilities as of June 30, per company filings. American reported $11.6 billion in liabilities, including program mileage credits, Delta $9.6 billion, United, just under $8 billion and Southwest $4.2 billion.

The balances reflect how airline loyalty programs generate and recognize revenue. Banks and other partners buy miles and points that they distribute to customers, giving airlines cash before all the associated rewards are used. Revenue tied to future award travel is deferred and subsequently recognized as customers redeem their rewards.

The flow is substantial. American recognized $2.2 billion of loyalty revenue during the first half of 2026. Delta recognized $2.3 billion in passenger revenue from loyalty travel awards, while United recorded $1.9 billion as travel miles were redeemed and Southwest recognized $1.4 billion of passenger revenue from redeemed points during the same half-year period, according ot the filings.

More flexible redemption gives consumers additional ways to use the rewards represented by these loyalty balances. Cash-plus-points allows rewards to be redeemed in smaller increments while the customer pays the remainder of the ticket price in cash.

Consumers have their own reasons to want that flexibility.

The PYMNTS Intelligence report “The Credit Economy: The Role of Reward Programs in Consumer Credit Usage” found in January that 26% of cardholders who had difficulty redeeming rewards said they didn’t have enough rewards for the purchases they wanted. Another 31% cited lengthy redemption procedures. Cash back, one of the simplest forms of rewards value, was received by 36% of cardholders during the 90 days before being surveyed.

Usability also affects where consumers spend. The PYMNTS Intelligence report “How Consumers Decide Which Credit Card to Pay With” found in May 2025 that more than 1 in 4 shoppers regularly alternate between entry-level and co-branded cards based on the rewards and benefits available.

Cash-plus-points lowers one barrier because the consumer doesn’t need enough rewards to fund the whole purchase.

More liquidity gives consumers another choice. Miles can be accumulated for a larger award, used in smaller amounts against a ticket or, depending on the program, spent elsewhere.

For airlines, these decisions affect the redemption of billions of dollars in outstanding loyalty obligations while the programs continue generating billions of dollars from card partners. For consumers, greater flexibility makes more of an accumulated balance usable.