American Airlines launched a loyalty program in 1981 and this program has significantly effected airline competitiveness. Although many airlines have operated this kind of program, the related effects vary. This study examines the relationships between perceived benefits, satisfaction, and loyalty of these loyalty programs using Structural Equation Models (SEM). A total of 340 respondents were randomly chosen in the summer of 2013. The results of the study reveal that perceived benefits of monetary savings, exploration. entertainment, and recognition related to loyalty programs of airline have a significant effect on satisfaction, and satisfaction is a significant antecedent factor of loyalty. Moreover, perceived effects (monetary savings, entertainment, and social) have an effect on loyalty of airline loyalty programs. These results suggest that the loyalty program of an airline may be a critical factor for competitiveness in the airline industry.