Shocking Airline Profits Revealed: Credit Cards and Miles, Not Butts in Seats, Keep Airlines in the Black – New Data Shows U.S. Airlines Would Lose Money Without Loyalty Programs. This is amazing news that highlights how addicted airlines have become selling miles and credit cards to generate revenue.
U.S. airlines would be unprofitable without their loyalty programs – A groundbreaking analysis by Courtney Miller of Visual Approach Analytics confirms what I have been preaching for the last 10 years – that major U.S. airlines would be unprofitable without their loyalty programs. In 2024:
- Delta: 10.5% profit margin turns into a 2.5% loss without loyalty revenue
- United: 8.9% profit turns into 1.9% loss
- American: 4.8% profit turns into a 8.3% loss.
- Alaska: 4.9% profit turns into a 11.4% loss
- Southwest: 1.2% profit turns into a 19.9% loss
Simply put, the airlines aren’t making money flying you — they’re making money marketing credit cards and selling points.
Look at how much revenue airlines generate from credit card partnership – Airlines earn billions through co-branded credit card partnerships and frequent flyer miles. In 2024, loyalty revenue as a share of total revenue was:
- Southwest: 21.1%
- Alaska: 16.3%
- American: 13.1%
- United: 12.9%
- Delta: 10.8%
When you earn or redeem points, airlines move money around on their balance sheets — turning future flights into today’s profits – Seems to me there is a lot of flim-flam going on with the airlines who can sell miles and then not factor in that revenue until the miles are used.
Here are two of my longterm predictions that are now dead forever –
Prediction #1 (Now dead) – The airlines will start charging a $10 fee to use a credit card to purchase an airline ticket. I have been predicting this for 10 plus years. With this current information, there is no way airlines would ever add a fee to use credit cards. They won’t kill the goose that lays the golden egg. The revenue from a credit card convenience fee would only result in 2-3% additional revenue but they would jeopardize 11-21 percent of their revenue.
Prediction #2 (Now Dead) – Southwest will stop offering their Companions fly free credit card offer. This is like jet fuel added to their credit card sales. When you see that Southwest generates 21% of their revenue from credit cards you can understand how powerful the “Companions Fly Free” credit card offering is, and why it is not going away.
What Travelers Should Know –
Good news: Credit card companies are effectively subsidizing your ticket.
Bad news: Smaller airlines can’t compete, which means fewer low-cost options long-term.
The bottom line? – Airlines have become financial engines fueled by loyalty, not lift. Travelers who understand this can play the game smarter — and maybe even fly first class on the house.