Distinguished Visitors Talk by Ryan Calder, Assistant Professor of Sociology and Director, Program in Islamic Studies, Johns Hopkins University

Talk on Monday, April 29 at 4:30pm in Gest 101 (tea at 4:15pm)

“When the Tail Wags the Plane: Frequent-Flyer Miles and Layered Financialization in the United States and Brazil”

Abstract: Most of us think of frequent-flyer miles as sophisticated versions of the venerable coffeeshop punch card: "Buy nine cups, get the tenth on us." While airlines do give away miles partly to keep customers loyal, far more is going on. Because they link commercial aviation to the credit-card industry, mileage programs have become essential to the profitability of major U.S. airlines, helping them survive the COVID-19 pandemic and in some cases accounting for half their profits.

So why should social scientists care? Drawing on ongoing interview research, this paper argues that the growth and global spread of mileage programs has not only changed commercial aviation's logic of profitability, but has created new, poorly understood threats to social equality, national economic stability, and the well-being of ordinary people. The largest mileage programs are effectively private central banks: they issue a currency (miles), inflate or deflate it by adjusting the rates for earning and redeeming miles, increase the money supply by selling miles to partners, and decrease it by expiring miles. Yet unlike state central banks, loyalty programs have no mandate to ensure monetary stability and serve the common good. Moreover, their currency is weakly regulated by states. These conditions interact with national specificities to generate a variety of risks. 

Building on the concept of "layered financialization" in increasingly "ordinal societies" (Fourcade and Healy 2024), I examine first why it is that in the United States, mileage-linked credit cards transfer wealth from poor to rich cardholders (Agarwal et al. 2023) and why, in being allowed by the state to serve as collateral, mileage programs put U.S. taxpayers at risk of major losses. I then consider Brazil, where the rise of an unregulated market in frequent-flyer miles has destabilized the travel industry, increased airfares, and led to the 2023-24 collapse of the country's largest online retailer of airline tickets, leaving 800,000 Brazilians bereft of tickets they paid for. In comparing cross-nationally the political economy and institutional context of air travel, consumer lending, and mileage markets, I show how (a) socioeconomic inequality and (b) a tendency to see the world as an investment portfolio reinforce each other. 

Sponsored by the Department of Sociology and the Distinguished Visitors Program