Incentivize people to visit areas that need the economic boost the most. We know where people go, economic activity follows, writes Loud-Hailer CEO Jack Chen.

Yes, the airlines can offer the world a $200 billion dollar stimulus package to boost further the global economy.

Sometimes it takes an extreme event to help us understand what is the most obvious. As the world shut down due to the coronavirus outbreak, and people stopped leaving their homes, I realized some simple truths:

  • People are social creatures and seek out each other’s company. For all the talk about people being isolated in their homes and disengaged from the world, the preponderance of people not only go out to interact with others for work, they actively seek that social interaction with others.
  • When people move, from the second the step out that door, they generate economic activity. It could be the powering of their electric vehicle that they paid to charge, the fare for public transport or buying that bagel and coffee for breakfast. As people move, they create ripple waves of economic activity. When they stay home, those ripple waves end.
  • The airlines are a vital part of the global civilization. Much like public transportation are the circulatory system of a city, the airlines connect people to each other around the world in a way that was unimaginable a few decades ago. Major trade shows (Mobile World Congress), sports events (The Arnold Classic) and music festivals (New Orleans Jazz Festival) attract attendees from around the world to come together for communal experiences that Zoom cannot replace.


While I am not a fan of flying, I do love visiting airports as they display the vibrancy of civilization. The frantic activity of thousands of travelers from diverse backgrounds at an airport, as they make their way around, on their journeys to different locations around the world is an example of our vitality.  

As the Congress passed the $2.2 trillion dollar stimulus package last month, I realized that the airlines themselves can implement their own multi-billion dollar stimulus plan.


Let me explain.

The authors of Creating Wealth  have estimated that U.S. airlines have issued around 14 trillion miles to passengers. Using an average value of 1.3 cents per mile, we get $182 billion dollars.

To stimulate the economy, we need people to travel. To do so they need money to spend. While the airlines may not have the cash to give people, they have something nearly as good: airline miles. In fact, airline miles are digital currency.

Airlines have the currency

While many sectors have implemented loyalty / rewards programs, airline miles are among the oldest, most successful and widely accepted loyalty programs in the world. How are airline miles similar to digital currency?  

  • Both are digital assets. They have no physical form so you cannot touch them.
  • They are accepted by others in exchange for a financial benefit, whether in receipt of a good or performance of a service. Unlike Starbucks stars that are accepted only at Starbucks, I can redeem airline miles for an endless list of options, including food, electronic goods and experiences.
  • There is a defined set of rules by which anyone can earn miles. I can take a trip, answer a survey or convert cash to miles by buying them.
  • Airline miles may also be transferrable, depending on each airline’s rules.  

I am not arguing that airline miles are decentralized, anonymous transactions. That does not interest me because the transfer of $1 between two people anonymously does not generate the kind of intrinsic economic activity we need right now.

Moreover, there is one characteristic that airline miles have that dominates all the other digital currencies. I can spend an airline mile in the real world. I can redeem miles to buy food or pay for lodging around the world. Good luck trying to do that with crypto outside of northern California.

Airlines are uniquely positioned to move you

Airlines are so important to long distance travel that I often find that once I decide to attend an event or meeting at a city that requires me to fly, the very first choices I must make are the flights that I will take to travel to and leave that city. Will I take the red eye and save a hotel night? Which airport do I fly to in the city if there is more than one?  Should I try for a direct flight or opt for a layover? In fact, all of my other subsequent travel decisions (hotel, rental car) are all dependent on my flight itinerary.


What the airline industry stimulus package should do

  • Incentivize people to visit areas that need the economic boost the most. We know where people go, economic activity follows.
  • Work with the local businesses by making it easy for them to join the rewards program. And convert any miles they receive into cash quickly, or even better, allow their suppliers to receive airline miles as payment. 
  • Enable the transfer of airline miles between people more easily. Let your members be able to donate their miles to healthcare professionals and hospitals so they can use the miles to pay for food or equipment.
  • Facilitate the conversion of miles from one airline to another. This will allow people to aggregate their miles into spendable levels.
  • Encourage people to spend every mile in their account. Imagine how much more economic activity that will generate.
  • Accept more types of merchants into the loyalty program. What if I can use miles to not just buy takeaway but groceries and pay for gas or rent? Or for childcare? I understand the need for airlines to receive government support as part of this recent government package. But there is much that they can do and they should spend, or rather get their loyalty members to spend, the currency that they have.

About our guest author, Jack Chen

Jack Chen is the CEO and Co-Founder of Loud-Hailer, which has a patented beacon-free technology platform specializing in hyperlocal engagement and services. He’s always thinking about the convergence of technology, airlines and retail -- not just because it’s his job, but because he’s (well, on pause until the skies open regularly again) a frequent flyer.