Untapped issuing opportunities: How airlines can capture value through four key best practices

by WAF_Contributor | Jun 20, 2025 | Airlines, Digital Transformation, Payments

Edgar, Dunn & Company, strategy consultancy specialised in payments with dedicated expertise in travel and airline payments, shares its perspectives on airline payments.

Throughout 2025, Edgar, Dunn & Company (EDC)’s travel payments practice continues to explore the evolving role of payments in the airline industry. The first article presenting an overview of key pain points for airlines can be accessed here. Following our discussions on payment acceptance, this article shifts focus to a frequently overlooked lever for growth and differentiation: issuing opportunities for airlines.

While most airlines have invested considerable effort in optimising payment acceptance, far fewer have capitalised on the opportunities that lie in issuing their own payment products. This gap is surprising, and strategic. Airlines enjoy a unique position of trust with their customers and partners such as travel agencies, possess rich behavioural and transactional data, and already operate robust loyalty programmes. And yet, most airlines have not fully explored how issuing solutions can support customer loyalty, improve margins, and unlock new revenue streams.

The missed opportunities in issuing

Compared to other sectors, airline-issued payment products are still underdeveloped. Working closely with our clients across the globe, we observe four recurring challenges that have limited the development of issuing programmes:

1. Limited product offerings by audience segment: airlines rarely differentiate their issuing solutions across customer segments. Consumers, business travellers, corporate buyers and travel agents all have different payment preferences and needs yet often face a one-size-fits-all payment offering, if any.
2. Disjointed payment and loyalty ecosystems: while many airlines operate sophisticated loyalty programmes, these are seldom integrated with payment tools. As a result, opportunities to drive engagement, capture data, or reward spend in real time are lost or not optimised as much as they could be.Yet, other industries offer compelling inspiration. For example, in Episode 44 of our EDC Podcast, Suryaveer Singh, Head of Loyalty, CRM and Data Analytics at Emirates National Oil Company (ENOC), discusses how their Yes Rewards programme successfully integrates loyalty and payments to engage customers beyond core services, creating value through data-driven strategies and cross-sector partnerships. This kind of approach offers a blueprint for how airlines could better align loyalty and payment ecosystems.
3. Lack of a tailored issuing model: airlines often rely on “traditional” co-branded credit cards issued via third-party banks or financial institutions and targeting consumers. These partnerships generate revenue through sales of miles to issuers, but the model can be suboptimal and could be more tailored for other segments. EDC encourages airlines to consider a wider range of issuing models depending on their strategic objectives and which segments they want to focus on.
4. No issuing strategy or ownership: in many airlines, issuing is not treated as a core product or strategic lever. There is often no internal sponsor, roadmap, or cross-functional coordination. As a result, issuing initiatives are fragmented or seen as marketing-led rather than product-driven limiting their ability to scale, adapt, or deliver long-term value. Clear ownership and product thinking are critical to unlock the full potential of issuing solutions.

As passenger confidence and travel volumes are back to pre-Covid levels, the time is ripe to rethink how issuing can support broader commercial goals for airlines.

Why issuing matters, now more than ever

The traditional airline business model is under pressure. With operating costs rising in many cases and price competition intensifying, airlines must look beyond fares to drive differentiation, profitability and generate new revenue streams. Issuing can support three strategic objectives:

1. Strengthening customer engagement: payment products embedded in mobile apps or integrated with loyalty programmes increase usage frequency and deepen brand affinity.
2. Enhancing spend visibility and data: issued products give airlines access to transaction-level data beyond ticket sales. This data can be used to personalise offers, create ancillary bundles, and better understand non-travel-related spend patterns.
3. Capturing new revenue streams: depending on the issuing model, airlines can benefit from a range of revenue sources, including card fee revenue, transaction fee revenue, FX margins, etc.

Where the market is moving and how airlines explore issuing to unlock new value pools

A few airlines have already started to explore issuing opportunities, often in collaboration with fintechs, traditional banks, or BaaS (banking-as-a-service) platforms. Though still relatively rare, these initiatives highlight the flexibility of issuing models and the wide range of card products that airlines can leverage, such as traditional co-branded cards to enhance loyalty, UATP cards designed for corporate travel, SME-focused cards and virtual cards for simplified business payments, prepaid gift cards aimed at consumers, stored-value cards for travel credit or ancillary services, and multi-currency cards to support international travellers.

Some examples illustrate how these different models can be applied in practice:

1. AirAsia has integrated a digital wallet into its “super app” ecosystem, which operates across several Southeast Asian markets, including Malaysia, Thailand, Indonesia, and the Philippines. The wallet, branded as AirAsia pocket, enables customers to store refunds, purchase ancillaries like baggage or meals, and pay for non-travel items across lifestyle merchants, aiming to streamline in-app payments and encourage repeat usage. Following this, the Super App saw a 236% year-over-year increase in monthly active users, reaching over 10.6 million in Q2 2022, with average transactions per user increasing from one to seven. In Q1 2024, non-aviation businesses generated over $132 million, contributing 12% of total group revenue.
2. GOL Linhas Aéreas has leveraged its Smiles loyalty programme through co-branded credit cards issued by multiple major Brazilian banks, including Bradesco, Banco do Brasil, and Santander. This multi-bank partnership model is particularly innovative, as most airlines typically rely on a single co-brand issuer. By engaging several banks, GOL has significantly expanded the reach of its credit card offering, tapping into a broader range of customer segments and acquisition channels. These cards allow customers to earn Smiles miles on everyday spending and have helped grow the programme’s user base, particularly among leisure travellers. With over 20 million members, Smiles has become a key driver of customer loyalty and ancillary revenue.
3. United Airlines, in partnership with Chase, offers co-branded credit cards specifically tailored to small businesses in the US. These products include business-focused spend categories, employee card controls, and deeper integration with United’s loyalty programme. This segmentation approach goes beyond consumer co-brands and aligns more closely with the travel needs of SMEs.
4. Air Canada issues UATP accounts through its ACGlobe and ACGlobePlus programmes, providing travel agencies and corporate clients with a centralised payment solution for air travel in Canada. This positions Air Canada as both a carrier and a B2B payment issuer within the corporate travel ecosystem.
5. Air France and KLM have partnered with Nium to roll out Nium Airline Payments (NAP), a “closed loop” virtual card solution targeting travel agents. NAP replaces traditional card schemes with UATP rails and bank transfers, enabling lower payment costs, faster settlement, and simplified reconciliation. The solution gives airlines more control over B2B payments and strengthens their commercial relationships with selected agents, starting with a rollout in Italy.

While such initiatives are not yet widespread, they reflect growing interest in bringing issuing closer to the core airline value proposition. Success will depend on aligning the issuing model with each airline’s commercial priorities, technical capabilities, and market context.

Choosing the right issuing model

There is no universal blueprint for issuing success. Airlines must first define their strategic objectives such as strengthening relationships with specific customer segments, collecting actionable data, generating cost savings, or developing new revenue streams. They must then carefully evaluate different models along three key axes:

1. Who? Customer segmentation: a robust issuing strategy caters to distinct customer profiles, from high-frequency travellers who require rich, comprehensive features to occasional fliers who prefer simple, digital-first tools. Airlines must segment their customer base by needs, geography, and the types of airline products they use, and tailor issuing products accordingly.
2. What? Product features: issuing a payment product can include many features ranging from “basic” payment functionalities all the way to broader financial and/or travel-related services. Product features must address the full range of customer needs. Every touchpoint – before, during, and after travel – should be designed with issuing products in mind, enhancing both the value proposition and the customer experience.
3. How? Control vs. delegation: there are implementation options that provide full control over the payment experience and data, e.g., opting to work with BaaS providers or becoming a UATP issuer vs. delegating to bank partners under white-label arrangements. Airlines should evaluate their role in the issuing value chain, deciding which activities to own, where customer interaction or strategic value is high, and which to outsource to partners.

Four best practices to unlock issuing opportunities

Based on our global consulting experience, including multiple engagements with airlines across the globe, Edgar, Dunn & Company has developed a proven set of best practices to help airlines leverage issuing opportunities:

1. Conduct an issuing opportunity assessment: map out customer needs, behavioural patterns, and current gaps in payment journeys. Use data to prioritise use cases with the highest ROI to decide whether and where to issue payment products.
2. Build a clear implementation roadmap and go-to-market plan: for instance, identify how to avoid operating loyalty and payment in silos and how to market issuing products.
3. Choose the right partners: whether through a fintech, bank, payment scheme or a BaaS provider, airlines need to ensure partners align with strategic priorities, commercial ambitions and technology roadmap.
4. Pilot, measure, iterate: an agile and iterative approach has proven effective for airlines. Start small, test quickly, and scale what works. Issuing is not a binary decision but a continuum of initiatives that can evolve with customer needs and business maturity.

These best practices are at the core of what Edgar, Dunn & Company proposes to its airline clients as part of dedicated issuing strategy projects, combining deep payments expertise with practical support.

Conclusion: from missed potential to strategic asset

Issuing is no longer just for banks. For airlines, it represents an untapped commercial lever that can enhance customer experience, support loyalty, improve data insights, generate cost savings and unlock new revenues. As the boundaries between travel, payments, and digital services blur, the time has come for airlines to include issuing in their payment’s strategy.

In our next article, we will explore the critical organisational questions airlines face in managing their payment functions. Who “owns” payments, and how should internal governance adapt to reflect payments’ growing strategic importance? Stay tuned for our next article: Governance matters, structuring payment ownership inside airlines.

We value industry dialogue and shared learning. If you have insights or perspectives to contribute, feel free to reach out to us at travelpayments@edgardunn.com and connect directly with us: Charlotte Piron-Seth, Louis Wapler, Pascal Burg and Greg Toussaint. We would be happy to arrange a discussion and exchange ideas.

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Article by Edgar, Dunn & Company

Edgar, Dunn & Company is a global strategy consulting firm specialising in payments and financial services. Since 1978, we have partnered with clients across the globe and developed an unrivalled depth in specialist expertise, with specific expertise in airline and travel payments. We offer a truly independent voice and our vision is to be the most trusted global payments consultancy. Today, we serve clients in over 45 countries through our global office network in North America, Europe, Middle East and Asia Pacific. We help organisations (e.g., airlines, hotels, travel agents, car rental operators and payment providers) navigate the complex payments and fintech ecosystem, identify opportunities to accelerate profitable revenue growth, and drive their competitive advantage.

Embedding airline payment into your strategy

by Jess Brownlow | Mar 21, 2025 | Airlines, Digital Transformation, Payments

The importance of airline payment

Airline payment remains a prominent topic of discussion within airline commercial and financial teams.

As McKinsey[1] summarised back in 2022, airline payment costs sum up to USD20 billion annually, representing up to three percent of airline revenues – a significant value in an industry that often only achieves a very low profitability. The volume is huge, with about three billion transactions per year facilitating a turnover of about one trillion dollars.

It is too easy to view airline payment simply as a cost factor. The handling of payment is an important part of the customer experience, and McKinsey also assumes that up to USD12 billion in additional revenues can be achieved for airlines annually if consumers can make payment more easily and efficiently in numerous ways.

Of course, the true values of these numbers can be discussed, but it is obvious that airlines need to focus on their capabilities to receive payment in an easy, inexpensive and safe way.

Airline payment as an enabler for an airline’s strategy

To achieve this, airlines often implement “payment strategies”. Personally, I am struggling a bit with the term “strategy” when it comes to airline payment. After running numerous airline payment engagements, I believe that there is no “airline payment” strategy per se. Payment need to contribute and be embedded into an overall airline commercial strategy and is a key business enabler ideally increasing conversion while reducing cost and risk.

Airlines’ overall strategies can be fundamentally different, such as if the airline follows a full-service carrier (FSC) business model or, at the other extreme, that of a pure low-cost carrier (LCC) with no frills. This has direct implications for airline payment and needs to be assessed case by case.

In addition, there might be shorter term airline strategies that have an impact on how to run payment. An airline may decide to enter a new market and therefore focus on high conversions by taking a higher payment risk, as well as for instance enabling local APMs, leading to higher complexities.

In essence, these approaches are defined by the airline’s strategy and not by the payment process. Therefore, they cannot be regarded as solely a payment strategy since airline payment is “only” the enabler of the overall strategy.

However, how is a payment set up embedded into the overall commercial strategy? Let me share a real-life step-by-step project approach, which has delivered the desired results.

A phased approach to embed airline payment

First, we analyse and audit the current payment setup, by taking a closer look at the balance between conversion, risk and cost. It also makes sense to investigate the organisational setup of the payment team, e.g., does it reside in finance, e-commerce, distribution or even sales? Addressing other questions such as how the payment architecture looks, who are the main payment suppliers and how they are governed, is also essential. By benchmarking the results, airlines will often be able to gain some tactical quick wins.

In the second step, the overall airline commercial strategy is taken into consideration. What are the guidelines and requirements for payments to enable the overall commercial strategy? What would a strategically fitting payment setup look like? What are the gaps between the desired state and the status quo? How do we get there?

Thirdly, the exercise should focus on implementation and execution. With the view on the current set up, the desired state for payment fully supporting the airline commercial strategy, a detailed roadmap to close the gaps can be established and executed, through change management. At this stage several questions can be addressed such as organisational structures, make or buy decisions, vendor and partner selections, just to name a few.

Of course, there is no recipe that fits all airlines when it comes to their payments. But with the overall approach summarised above, airlines can enhance their payment process through enhancing conversion while reducing cost and risk, with the ultimate goal to be the enabler for the airline’s commercial strategy – payments are there to support, but they are not a strategy by themselves.

For more from Travel in Motion also see:

• Offers and Orders: an industry outlook at what will happen in 2024
• Moving to cloud nine
• Will commercial airline IT really become modular and open?

Article by Travel in Motion AG

[1] McKinsey Sep. 2022 – Airline retailing: How payment innovation can improve the bottom line