Jet Airways sells loyalty miles in advance to raise Rs 2.5 billion

Jet Airways has tapped into its loyalty programme to overcome its tight liquidity situation.

The cash-strapped airline has raised over Rs 2.5 billion from the advance sale of redemption miles to its subsidiary. The loyalty programme is run by Jet Privilege Private Limited (JPPL), a company Jet Airways co-owns with Etihad Airways.

Accrual and redemption of miles is a transaction between two companies.  While Jet Airways pays JPPL for accrual of miles,  it gets paid by JPPL on redemption of those miles by a customer. The redemption cost is agreed on per mile basis and accounts are settled every month.