Loyalty Programs Are Keeping America's Airlines Aloft (economist.com)
(Friday August 08, 2025 @05:22PM (msmash)
from the changing-times dept.)
American airlines have transformed into financial services companies that happen to fly planes as [1]loyalty programs now constitute their primary profit engine rather than passenger transport. Delta, American, Southwest, and United all operated their passenger services at a loss in 2024 while generating $14 billion in combined operating profits from credit card partnerships.
Delta received $2.1 billion from American Express in Q2 2025 -- exactly matching its total operating profit -- while the airline's passenger operations alone would have posted a loss. These loyalty programs command valuations in the tens of billions, sometimes exceeding the airlines' total equity value, with Delta reporting 1% of U.S. GDP flows through its co-branded cards. Customers can now reach American Airlines' top loyalty tier without boarding a single flight.
[1] https://www.economist.com/business/2025/08/06/how-loyalty-programmes-are-keeping-americas-airlines-aloft
Delta received $2.1 billion from American Express in Q2 2025 -- exactly matching its total operating profit -- while the airline's passenger operations alone would have posted a loss. These loyalty programs command valuations in the tens of billions, sometimes exceeding the airlines' total equity value, with Delta reporting 1% of U.S. GDP flows through its co-branded cards. Customers can now reach American Airlines' top loyalty tier without boarding a single flight.
[1] https://www.economist.com/business/2025/08/06/how-loyalty-programmes-are-keeping-americas-airlines-aloft