Major airlines are finding their most lucrative revenue source not in flying passengers, but in their loyalty programs and credit card partnerships. “A lot of people call airlines credit card companies with wings,” said TJ Dunn, editor in chief at Prince of Travel.
Federal filings show loyalty represents over $25 billion in yearly revenue across the industry. In 2024, Delta led the pack with $7.4 billion (12% of total revenue), followed by American at $6.1 billion (11.3%), Southwest at $2.2 billion (8%), and United at $2.9 billion (5%).
The business model works by airlines creating points, selling them to banks at 1.5 to 2.5 cents each, and customers redeeming them for roughly 1 cent of value. This creates profit margins between 39% and 53% for carriers, according to a March report from Point.me.
Beyond direct revenue, these programs generate loyal customers who concentrate their travel with a single airline regardless of price. “Having an airline credit card tends to make you a stickier customer,” said Savanthi Syth, a Raymond James analyst.
For consumers, redemptions can provide significant value. However, airlines regularly change program terms without warning, as when United recently increased credit card annual fees by between $55 and $245, and Delta made earning status more expensive by basing it on spending rather than miles flown.
Even new perks have limitations. “United’s new benefits have coupon book energy to the max,” said Sally French, a NerdWallet analyst, noting that many benefits like ride-sharing credits come in small monthly increments.
Airlines also profit from points that go unused. The McKinsey consulting group estimated that 30 trillion airline points went unused globally in 2018. Southwest reported $4.8 billion worth of unused points in a 2024 federal filing, while Delta has approximately $9 billion.
These programs face potential regulatory concerns. The Department of Transportation began investigating major carriers in September to determine whether they were engaging in “unfair, deceptive, or anticompetitive practices.”
As traditional airline economics face pressure, loyalty programs have become essential buffers against uncertainty. Delta’s April earnings showed loyalty revenue increased by 7% year over year, including $2 billion from its American Express partnership.
The industry has shifted dramatically since American Airlines launched the first modern loyalty program in 1981, with carriers now moving away from their core transportation mission toward financial engineering—less Wright brothers and more JPMorgan.