US airlines are relying on co-branded credit cards for more revenue, shifting the focus of loyalty programs away from traditional flying. This trend is evident in how airlines reward travelers, with many programs favoring credit card spend over miles earned from flights. Major carriers such as United Airlines, American Airlines, and Delta Airlines are adjusting their loyalty program rules to encourage credit card use, making it harder to earn rewards for the lowest fares. For example, United Airlines will soon offer enhanced mileage earning for cardholders, while limiting mileage redemption on basic economy tickets for non-cardholders.
Banks pay airlines billions a year for miles and other loyalty program benefits, sometimes more than operating income. This revenue stream provides stability amid fluctuations in jet fuel and airline margins. However, it also exposes airlines to risks associated with regulatory changes affecting bank strategy, credit terms, and reward program funding. IdeaWorks’ Jay Sorensen noted the devaluation of frequent flyer members, with rewards “payback” significantly reduced since 2019 as airlines earn mileage on cheaper tickets.
Although airlines maintain that credit cards augment rather than replace traditional revenue streams, the reliance on card partnerships is undeniable. Delta Air Lines, a major American airline, received $8.2 billion from American Express in 2025, a large portion of its operating income. American Airlines reported $6.2 billion in cash payments from co-brand partners. Alaska Airlines also recognizes the stabilizing effect of its co-brand partnerships during changes in demand. Alaska Airlines provides passenger and cargo air transportation, while Horizon Air Industries offers scheduled air passenger service to destinations in the Pacific Northwest.
However, this credit card loyalty model faces challenges. A possible economic downturn could cause banks to tighten lending and curtail co-branded card marketing, which could affect airline revenues. Additionally, proposed legislation in the U.S. Congress, such as the Durban-Marshall bill, aimed at increasing competition in payment-network routing, could jeopardize airline credit card rewards. Regulatory scrutiny of airline rewards programs is also increasing, with consumer advocates calling for stronger disclosure about changes in earnings and redemption values.
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