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Frequent Flier Program Soars in Value

United weighs selling off Mileage Plus, worth $2B more than carrier

By Heather McPherson,  Newser User

Posted Jul 24, 2007 4:59 PM CDT

(Newser) – United Airlines' frequent flier program may be worth more than the carrier itself, according to projections for a still-speculative sell-off. The program would be worth about $7.5 billion, a Bear Stearns analyst says; United makes $19.3 billion a year, but its overall value is only about $5.45 billion—the air travel game is tough these days.

So far, United is keeping quiet on its frequent-flier plans. "We are managing our Mileage Plus program to the benefit of our customers and shareholders and will continue to do so," says a spokeswoman. Meanwhile, analysts say spinning off the program could nearly double United's share price.

A United Airlines flight during take-off. United has not yet divulged any plans regarding the future of its potentially profitable customer loyalty program.
A United Airlines flight during take-off. United has not yet divulged any plans regarding the future of its potentially profitable customer loyalty program.   (Wikimedia Commons)
The popular Mileage Plus program allows frequent fliers to use their miles as flights, or as credits with partnered businesses.
The popular Mileage Plus program allows frequent fliers to use their miles as flights, or as credits with partnered businesses.   (Shutterstock.com)
By leveraging the Plus program, United could spin a $3.8 billion liability into a $7.5 billion business, according to analysts.
By leveraging the Plus program, United could spin a $3.8 billion liability into a $7.5 billion business, according to analysts.   (Shutterstock.com)
A United Airlines plane leaves San Francisco International Airport, in this July 31, 2006 file photo. A New York investment bank estimates the value of their Mileage Plus program at $7.5 billion. (AP Photo/Paul Sakuma, file)
A United Airlines plane leaves San Francisco International Airport, in this July 31, 2006 file photo. A New York investment bank estimates the value of their Mileage Plus program at $7.5 billion. (AP...   (Associated Press)
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