The Traveler Trust Loop

Why it’s time to reimagine airline loyalty

One of our fundamental beliefs at Caravelo:

Online travel booking innovation has mostly been an illusion. At least in the past ten years.
Bold statement, but think about it.

The internet era promised travelers convenience, choice, and transparency.
And for the first decade or so (say, until 2015), that was largely true, with airline websites, OTA booking engines, and metasearch platforms enabling travel booking at our fingertips.

But after that?

What has truly improved?

Instead of simplicity, travelers now face a marketplace that feels rigged. They endlessly shop around, trying to decode dynamic fares, dodge hidden fees, and scroll through hundreds of comparison sites.

Case in point: 5 of the top 9 booking pain points today relate directly to a lack of price transparency.

Some might even argue that booking flights has become the definition of corporate indifference to customer experience. Travelers feel trapped in a system designed to maximize airline revenues at the expense of trust.

Airlines, in turn, haven’t prospered either. Barely profitable, they face commoditization: customers treat them as interchangeable, switching brands at the slightest change in price or schedule.

To counter this churn, airlines doubled down on Frequent Flyer Programs. These schemes did create repeat business, but mostly by locking travelers in through thresholds, sunk costs, and status, not because customers genuinely felt connected to the brand. Loyalty remained transactional (or at best retentional), but never truly relational.

That model was never meant to last. And it’s cracking as we speak, especially with younger, digital-first travelers who refuse to be gamed by point traps or dubious pricing tactics.

What the next generation of travelers wants is not lock-in, but log-in: a voluntary, trust-driven engagement with brands that consistently deliver value and a real wow-factor.

We call this progression the Traveler Trust Loop.

It charts the evolution from:

• LOOKING AROUND (transactional churn),
• to LOCK-IN (retentional loyalty),
• to LOG-IN (relational trust).

This article – the first in a new content series from us – will unpack each stage of this loop.

1. Looking Around: endless clicks, zero loyalty

Let’s start with Phase 1: the default stage in today’s travel booking environment, and arguably the reality for the majority of leisure travelers who book once or twice a year.

This “standard” flight booking process is defined by its deeply transactional nature. With little transparency around pricing and minimal differentiation between airlines, travelers are trapped in a cycle of endless comparisons, hopping between portals, OTAs, and metasearch engines in search of the elusive “best deal.”

The data confirms this tireless process: Expedia Group found that travelers spend an average of 128 minutes on airline websites during the path to purchase. That’s more than two hours spent hunting for fares. While a handful of travelers may enjoy the research, for most it’s pure frustration. In fact, over three-quarters of travelers say comparing airline prices is too time-consuming.

And it doesn’t stop with flights. When planning entire trips, the problem gets worse. In 2023, travelers visited 141 different web pages before booking a trip (flight + hotel + extras), up from just 38 in 2013. In the U.S., that number spikes to 277 pages per trip.

Instead of improving, the booking experience has deteriorated. If online travel innovation had really delivered, those numbers would be trending down, not up.

At its core, this is no longer just a transparency issue; it has become a trust problem.

The root lies in fare unbundling and the constant fear of hidden fees. According to Travelport, two in three travelers cite hidden fees as their #1 concern when booking flights.

Airlines may defend these practices as “revenue optimization,” but the fallout is undeniable: 72% of travelers abandon their booking mid-process because they feel overwhelmed. That’s lost business, even if some return and give it another try.

This is what the Looking Around phase represents: a transactional loop of wasted time, frustration, and distrust. Two decades into online booking, and airlines still haven’t solved the most basic customer need: clarity. Until they do, loyalty will remain out of reach.

And here’s the real challenge: mistrust has now crept so deeply into the traveler’s mindset that it’s hard to escape this phase, even for more premium carriers. It’s no longer about fluctuating prices, hidden fees, or too many ancillary services; it’s the broader perception that the system is designed against the customer.

Travelport’s research confirms this: airlines (together with hotels, facing similar criticism over opaque pricing) are now ranked as the second most misleading industry when it comes to pricing transparency.

Our takeaway: this isn’t one airline’s problem, or just a low-cost carrier issue. It’s an industry problem. And as long as the Looking Around phase dominates, mistrust will keep travelers endlessly shopping around instead of building meaningful relationships with the brands they fly.

2. Lock-In: the loyalty cure?

Airlines have long believed they have found the cure to the transactional Looking Around phase, at least for their most active passengers. Frequent Flyer Programs (FFPs) promised to turn churn into commitment, giving regular travelers a reason to stick around.

And commercially, it’s hard to argue with the results. Taken together, the world’s top 10 airline loyalty programs now form a $120 billion empire – more than four times the airline industry’s global profits last year.

Especially in the U.S., FFPs have become profit engines of staggering scale thanks to their deep integration with banks and credit cards. Here’s the play: airlines sell billions of dollars’ worth of miles each year to banks, who in turn use them as rewards for co-branded credit cards.

• For airlines, this is pure margin: cash upfront, no planes required, and redemption often delayed or never fully realized.
• For banks, it’s a powerful acquisition tool in a hyper-competitive credit card market.

The result is a scale effect unique to the U.S.: loyalty programs aren’t just retention schemes anymore; they’re billion-dollar financial products in their own right.

Some would even say these companies aren’t airlines with loyalty programs. Instead, they’re loyalty businesses that happen to fly planes. The numbers back that up.

Take Delta Air Lines:

• Without its loyalty arm, Delta would have posted a –2% operating margin in 2024.
• With it, the airline soared to an 11% margin, generating nearly $6 billion in operating profit last year.

And Delta isn’t an outlier. The same dynamic holds true for all of the U.S. majors. Strip out their loyalty programs, and their core airline operations would be loss-making.

Given these numbers, it’s no wonder that Wall Street values the loyalty arms of the “Big Three” U.S. carriers more highly than the airlines themselves.

Put differently: the business of perks and points outperforms the business of aviation itself, even though moving billions of people safely through the skies remains one of humanity’s greatest engineering achievements.

On the surface, these numbers suggest the industry cracked the code: that it moved travelers into a new phase of repeat business. And in one sense, it has.

But that success story comes with cracks that are getting harder to ignore.

And in our view, the bottom-line impact of loyalty programs is so compelling that it tempts airlines to look away from the deeper truth: FFPs lock customers in, but they rarely build real trust or emotional connection. Commercial success is masking strategic stagnation.

Lock-In means over-milking the loyalty cow

There are two main drivers that explain why Frequent Flyer Programs create what we call retentional loyalty, not true relational connection.

The first point is that airlines have pushed their programs too far in pursuit of financial returns.

In recent years, most airlines have restructured their programs to extract more value, often at the expense of their most loyal customers.

• Status tiers and rewards have been quietly shifted from mileage-based tracking to revenue-based models.
• In practice, this means fewer perks, harder-to-reach thresholds, and benefits that don’t stretch as far as they once did.
• Unsurprisingly, the backlash has been loud. Frequent flyers increasingly complain that the systems no longer deliver the rewards they signed up for.

Yet airlines don’t seem to take these concerns seriously. Financial optimization appears to weigh more heavily than customer satisfaction. The data shows just how wide this disconnect has become.

A recent iSeatz study found that 92% of loyalty providers (including airlines) believe their programs deliver real value to customers. Ask travelers themselves, and only half of them agree.

This gap is not theoretical. It already translates into diminished loyalty behavior, even if airlines don’t see it reflected in their bottom line yet.

According to Boston Consulting Group, airline loyalty members in Europe actually show the lowest brand exclusivity across all loyalty categories.

• Just 13% of frequent flyer members fly exclusively with their loyalty airline.
• The other 87% occasionally or regularly choose competitors, despite their membership status.

That’s a striking contrast to cheaper consumer categories. People are more loyal to a $15 streaming subscription like Netflix than they are to a $500 plane ticket with Air France, Lufthansa, or British Airways.

This erosion isn’t just anecdotal either; it’s been building steadily over time.

McKinsey data shows that airline loyalty members’ willingness to fly more often with their respective airline has fallen dramatically.

• In 2017, one-third of members said they intended to fly more frequently with their loyalty airline.
• By 2023, that number had dropped to just 17%.

The message is clear: what airlines see as “loyalty” is increasingly nothing more than financial lock-in.

And the more they milk their programs for profit, the more they risk alienating the very travelers those programs were designed to engage.

Lock-In means ignoring the majority of today’s travelers

This brings us to the second driver behind the retentional (not relational) nature of today’s airline loyalty programs: the very travelers these programs were designed to serve are changing.

Another McKinsey study shows that interest in loyalty programs is deteriorating across the entire travel sector, not just in airlines. Hotels, car rentals, and even cruise operators face similar trends. That’s important because it suggests the issue isn’t limited to one product category or pricing model; it’s a broader shift in consumer behavior.

What used to be an easy win for travel brands (keeping customers hooked with points and perks) no longer works the way it once did.

At the same time, enrollment trends are steadily declining.

• Back in 2019, two-thirds of active travelers (defined as those flying at least twice per year, surveyed across 16 key markets) were enrolled in a frequent flyer program.
• Today, that share has fallen below 40%.

Why? Demographics.

We see a clear generational divide: the younger the traveler, the lower the interest in classical airline loyalty.

• Millennials (born 1981–1996) and Gen Z (born 1997–2012) simply don’t buy into legacy loyalty mechanics.
• Surveys show that the two youngest commercially relevant groups are significantly less likely to enroll in or actively use airline loyalty programs.

Critics might argue that younger travelers have always been less invested in loyalty programs, since they tend to have lower incomes and fewer trips to leverage for elite status. But this time, it’s different. The gap isn’t just about age or income, it’s about values.

• Younger generations simply don’t buy into the old idea that tier thresholds and status badges equal value.
• For them, loyalty must mean more than upgrades and lounge access.

And this matters more than ever, because purchasing power is shifting fast.

Millennials and Gen Z already account for over half of all airline ticket sales in 2024. Within the next five years, they will represent 75% of total airline spending.

The reasons behind this generational rejection are complex, but the core essence is clear. Today’s travelers operate differently. They are digital-first, experience-obsessed, and constantly in motion – both physically and mentally.

• They don’t want to be locked into anything.
• They want a reason to log in (willingly and repeatedly) because they trust the brand behind the wall.

For too long, airlines have ignored these demographics, dismissing them as commercially irrelevant due to lower purchasing power. That excuse no longer holds. The future revenue base of the industry lies with a generation that rejects forced loyalty.

And here’s the risk: if airlines continue to cling to FFP mechanics as their primary loyalty play, they’ll mistake financial lock-in for genuine customer connection. Forced lock-in is not trust. And once the next generation calls that bluff, the entire loyalty model risks collapsing like a house of cards.

3. Log-in: when loyalty becomes trust

The “log-in moment” is the ultimate (aspirational) signal of modern customer loyalty.

Yes, log-ins already exist today for Gold members and frequent flyers, but in our model, their meaning shifts fundamentally. It’s not about points, perks, or complicated tiers anymore. It’s about a single, low-friction gesture (clicking log in) that says: “I’m in, because I know what’s behind this wall is worth it.”

This is the fundamental difference between retention and trust.

• Retention is manufactured through transactional perks and thresholds.
• Trust is earned through consistent value, relevance, and emotional connection.

Travelers return voluntarily, not because they’re trapped, but because they genuinely believe in the experience and the sense of purpose.

And this shift couldn’t come at a more critical time.

• For previous generations, travel was (mostly) a luxury, a once-a-year event. For business travelers, it was a status and occasional upgrade game.
• For today’s travelers, it’s part of life. Remote work, cross-border relationships, and a culture of mobility have turned flights into digital infrastructure. Travel is how this generation stays connected, sane, and curious. It’s no longer a reward; it’s a recurring need.

Research confirms it: three out of four Millennials and Gen Z will travel significantly more than older generations.

Even more striking, about half of both groups consider travel spending non-negotiable, placing it on par with rent or groceries.

In other words: Millennials and Gen Z don’t view flying as a bonus. They see it as a baseline. A recurring budget item. A regular routine.

If travel is now a recurring part of life – and part of identity – one critical question remains:

What do you offer in exchange for that log-in, for that act of trust?

It’s the question we’ll explore in our next article: a deep dive into what makes the log-in moment so powerful, and how airlines can design it to reset the broken relationship with their customers.

Stay tuned.