Summary
Major U.S. airlines have quietly shifted the economics of rewards programs, drawing a growing share of cash from co-branded credit-card partners rather than from ticket sales. That money is changing how loyalty benefits are awarded, particularly on the cheapest fares, while creating new dependencies on bank partners and new vulnerability to regulatory and credit-market changes.
Program changes and recent moves
Beginning April 2, 2026, United Airlines will reduce the miles earned by non-cardholders on eligible flights to 3 miles per dollar, while customers who hold a United card will earn at least 6 miles per dollar. United also said regular members will need a qualifying United card to earn miles on basic economy fares. American Airlines has stopped awarding AAdvantage miles and Loyalty Points on basic economy tickets. Delta Air Lines now allows spending on its co-branded American Express cards to contribute toward elite-status qualification.
Those policy shifts reflect a broader repositioning of loyalty programs toward credit-card spending as a central mechanism for rewarding customers, and away from a direct link between cash fares and miles accrued.
Why card payments matter
Airlines receive large cash payments from banks that purchase miles and enter marketing agreements. Those payments can amount to billions of dollars annually and in some years have rivaled operating income for carriers. Because those sums are less directly connected to ticket sales, they provide a revenue stream that reacts differently than traditional passenger demand - a distinction gaining importance as fluctuations in jet-fuel costs tighten margins.
Delta reported receiving $8.2 billion in cash from American Express in 2025 - about 14% of adjusted operating revenue and roughly 1.4 times adjusted operating income. Delta noted that part of that cash is recognized as revenue immediately and part is deferred until miles are redeemed. American Airlines disclosed $6.2 billion in 2025 cash payments from co-brand and other partners, an amount about four times its adjusted operating income. Alaska Airlines said loyalty revenue comprised roughly 16% of its total revenue, and its CFO highlighted that the co-brand partnership helps smooth results through demand swings.
Effects on rewards and consumer perception
Industry observers say the value returned to frequent flyers has declined as airlines reduced or removed mileage-earning on the cheapest fares. Jay Sorensen of IdeaWorks said, "The value provided to frequent-flyer members has decreased over time." IdeaWorks' 2025 U.S. Domestic Reward Report found that reward payback - the relationship between cash fares and award prices - has fallen by about half since 2019, reflecting cuts to mileage earning on low fares.
David Robertson of the Nilson Report warned that if redeeming miles increasingly feels unattainable, some consumers could drop airline cards, which might lead banks that buy miles in bulk to push back. Airlines, however, push back on the notion that cards are replacing flying as the main route to rewards. Alaska's loyalty chief Kevin Scott said non-cardholders "continue to earn meaningful value through flying," and described co-branded cards as enhancements, not replacements, for traditional accrual through travel.
Concentration of partner relationships and credit-cycle exposure
The airline-credit card model concentrates airline exposure to a few bank partners. Delta stated that nearly all of its marketing-agreement cash is from American Express, while Southwest said the majority of points it sells are purchased by JPMorgan Chase. Analysts note that banks alter co-brand spending and new-account marketing when lending conditions deteriorate: in a downturn, banks tighten lending and cut co-branded card marketing, slowing new-account growth and affecting airline earnings within two to three quarters, according to payments analysts.
Regulatory and merchant pressure
The reliance on interchange-funded rewards has drawn scrutiny from merchants and lawmakers who argue the fee structure that enables rich card rewards can impose costs on merchants and, indirectly, on consumers. A bipartisan bill in the U.S. Congress, referred to in reporting as the Durbin-Marshall proposal, would require more competition in payment-network routing, which proponents say would reduce merchant costs.
Airlines for America warned that such a change could threaten airline credit-card rewards, citing the decline in debit-card rewards after a similar regulatory shift. Merchants and consumer groups do not share that assessment; the National Retail Federation's Dylan Jeon said premium rewards cards carry the highest interchange rates and that merchants often pass those costs on to consumers, effectively causing non-users to subsidize cardholders.
Research cited by industry analysts shows that caps on interchange fees in regions such as Europe and Australia were followed by reduced rewards, higher annual fees, and the disappearance of some card products. Separately, President Donald Trump has proposed a one-year cap on credit-card interest rates at 10%, a move banks and airline groups argue could damage rewards programs.
Regulatory review of programs
U.S. regulators have taken an interest in loyalty programs. The U.S. Department of Transportation requested information from American, Delta, Southwest and United in 2024 about rewards programs and policies; all four responded and their replies are under review.
John Breyault, vice president of public policy at the National Consumers League, urged stronger disclosure, noting airlines can change earning and redemption values without giving customers clear advance notice. "The modern airline is a gigantic rewards program that just happens to fly airplanes," he said.
Industry implications
The shift toward funding rewards through card partnerships changes the revenue mix for carriers and recasts loyalty programs as financial products closely tied to bank strategy, interchange economics and potential regulation. For airlines, this evolution offers a significant source of cash that can stabilize results but also creates a new set of counterparty and policy risks that affect margins and customer value propositions.
Marketing and investment notes
Some promotional material tied to financial analysis tools referenced in reporting highlights that AI-based stock evaluation platforms monitor bank and airline relationships, but the article's core facts are the documented payments, program changes and regulatory attention described above.
Reporting in this piece reflects airline disclosures and public comments from industry figures and trade groups. No new financial figures or events are introduced beyond the figures and statements presented here.