Frequent flyer programs: The most profitable part of the airline industry
CNN
Buying this week’s groceries or paying for a full tank of gas with a credit card might contribute more to the profits of the airline industry than buying a one-way ticket.
Buying this week’s groceries or paying for a full tank of gas with a credit card might contribute more to the profits of the airline industry than buying a one-way ticket. That’s because frequent flyer programs have become a crucial part of the airline industry’s profitability. And that’s due to the billions of dollars banks and credit card issuers pay to buy bulk miles from airlines to reward and entice cardholders to make purchases with their cards. The typical airline passenger probably never thinks about the economics of frequent flyer programs, but the programs have become crucial for airlines to generate the profits needed to stay afloat. And loyalty programs have also caught the attention of federal regulators because of the central role they play in air travel today. Last year, Delta Air Lines received $6.8 billion in revenue from American Express on its co-branded Delta Amex card. American Airlines reported revenue of $5.2 billion from co-branded cards and other partnerships. United reported a mere $3.2 billion on its other operating line that came primarily on payments to its frequent flyer program. And when considering the adjusted incomes of 2023 for Delta ($4 billion) American ($1.9 billion) and United ($3.3 billion), it’s easy to understand why the major carriers rely so heavily on frequent flyer programs. “The airlines’ frequent flyer programs are their lifeblood; they’re the reason the airlines are in business,” said Zach Griff, senior aviation reporter for The Points Guy, a travel site that closely follows the programs. Of course, the windfall from selling miles to credit card companies isn’t pure profit for the airlines. The airlines do end up providing flights for those miles. But the profit margin on that part of the business is about 50%, according to Tom Fitzgerald, airline analyst for TD Cowen.
Warner Bros. Discovery has officially rejected Paramount’s hostile takeover bid, advising its shareholders to do the same. But the battle is far from over. Let’s break down what just happened and what to expect next.
California is threatening to ban sales of Tesla cars in the state for 30 days after a regulator said the term “Autopilot” for its driver assist feature constitutes false advertising.
Warner Bros. Discovery is officially rejecting Paramount’s buyout offer, calling it “illusory” and arguing that the existing plan to sell most of the media company to Netflix is a better deal for shareholders.
Tech historians may look back on 2025 as a kind of trough in consumer robotics.
The One Big Beautiful Bill Act, which was signed into law in July, created several new tax provisions and made changes to others that are in effect for this year. So it’s worth having the rundown of some of the key ones before preparing your 2025 tax return.
President Donald Trump promised voters in 2024 that if they returned him to the White House, his policies would deliver a blue-collar jobs boom.
Up until this year, it was unheard of for a sitting American president to sue a news outlet. In just a few months, President Donald Trump has managed to make it seem normal.
Plans to ban the sale of new combustion engine cars in the European Union by 2035 have been thrown into turmoil after pressure from car manufacturers.
Merriam-Webster is the latest in a string of dictionaries to choose words of the year based on our relationship with technology and artificial intelligence.
Economists are expecting to learn on Tuesday that the US labor market slowed last month, adding just 40,000 jobs.
It’s getting harder to escape AI slop. But a growing backlash could put a premium on “human-made” content.
The November jobs report is landing at an odd time – on a Tuesday in mid-December, instead of (what’s usually) the first Friday of the month – due to the lingering impact of the historically long government shutdown.
President Donald Trump sued the BBC on Monday for defamation over edited clips of a speech that made it appear he directed supporters to storm the US Capitol, opening an international front in his fight against media coverage he deems untrue or unfair.