Latest news with #DeltaSkyMiles
CNN
13-05-2025
- Business
- CNN
These are our favorite credit cards for Delta flyers in 2025
CNN Underscored reviews financial products based on their overall value. We may receive a commission through our affiliate partners if you apply and are approved for a product, but our reporting is always independent and objective. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit to learn more. Delta Air Lines and its Delta SkyMiles loyalty program continue to be a favorite among frequent and casual flyers alike. Known for its extensive route network, impressive onboard entertainment and fast, consistent Wi-Fi, Delta has positioned itself as a premium domestic and international carrier. If you often find yourself flying Delta, the right Delta credit card can elevate your travel experience while helping you rack up SkyMiles faster than ever before. With multiple personal and business card options issued by American Express and generous welcome offers on many of them, now is an opportune time to find the Delta card that best suits your travel habits. Delta recently increased annual fees and overhauled benefits on its suite of American Express-cobranded credit cards. So, when choosing a Delta credit card, it's important to consider several key factors beyond just the sign-up bonus. Travel frequency: Do you fly Delta once or twice a year, or are you hopping on a plane every month? Occasional travelers might benefit most from cards with lower fees, while frequent flyers will see outsized value from premium perks like lounge access and companion certificates. Elite status goals: Are you aiming to earn or maintain Medallion status? Premium Delta cards can offer MQDs and accelerators that can help. Checked bags and boarding: Most Delta cards grant your first checked bag free, a benefit that easily offsets a card's annual fee after just a couple of trips. Priority boarding is another perk that enhances the travel experience. Companion certificates: High-tier Delta cards include annual companion certificates that can provide exceptional value, particularly when used for pricey routes in first class or Comfort+. Lounge access: If comfort and productivity at the airport are top priorities, look for cards that offer complimentary Delta Sky Club and Centurion Lounge access. Bonus categories: Consider what you spend the most money on — restaurants, groceries, advertising, shipping? Some cards offer generous miles on categories relevant to both personal and business spending. Foreign transaction fees: For international travelers, it's important to use a card that doesn't charge foreign transaction fees. Fortunately, all current Delta Amex cards waive these fees. Delta SkyMiles® Blue American Express Card: Best Delta credit card with no annual fee Delta SkyMiles® Gold American Express Card: Best for occasional Delta flyers Delta SkyMiles® Platinum American Express Card: Best for regular Delta flyers Delta SkyMiles® Reserve American Express Card: Best Delta companion certificate The Platinum Card® from American Express: Best for Delta lounge access Delta SkyMiles® Gold Business American Express Card: Best for business owners who fly Delta Delta SkyMiles® Platinum Business American Express Card: Best for Delta business travelers Delta SkyMiles® Reserve Business American Express Card: Best for Delta road warriors Each card comes with its own strengths and trade-offs. In the next sections, we'll take an in-depth look at each and how they stack up against one another. If you don't fly Delta that often and just want to earn Delta SkyMiles without paying an annual fee, the Delta Blue Amex is a basic, no-frills Delta credit card. With 2 miles earned for every dollar you spend at restaurants worldwide, access to Delta's Pay with Miles program and no foreign transaction fees, this card actually has a decent number of features for an airline credit card in the no-annual-fee camp (see rates and fees). People who check bags on Delta for at least two trips each year will want a more powerful Delta credit card since the Delta Blue Amex doesn't have a checked bag fee waiver. But for the once-in-a-while traveler, Delta's no-annual-fee credit card may be worth considering. You can also earn 10,000 bonus miles after you spend $1,000 in purchases on your new Delta Blue Amex card in the first six months after opening your account. Based on the points valuations of frequent flyer website The Points Guy, Delta SkyMiles are worth 1.2 cents apiece, meaning these 10,000 bonus miles are worth $120 toward travel. Learn more about the Delta SkyMiles Blue Amex Card. The Delta Gold Amex credit card has an introductory annual fee of $0 for the first year, and then a $150 annual fee starting at your first renewal (see rates and fees), so you can try out the card for a year to see if it's right for you. New Delta Gold Amex card members can earn 50,000 bonus miles after you spend $2,000 in purchases in the first six months after opening the account. Those miles are worth $600 toward travel based on The Points Guy's valuations. With the Delta Gold Amex, you'll receive 2 miles per dollar at restaurants and US supermarkets, plus up to $200 in Delta flight credit after spending $10,000 in a calendar year. You'll also get your first checked bag free on all Delta flights with this card, which further whittles down the net cost of carrying it and offers 20% savings on in-flight purchases made while flying Delta. Learn more about the Delta SkyMiles Gold Amex Card. If you've been thinking about getting a Delta Platinum Amex credit card, the card currently features a welcome offer of 60,000 bonus miles after you spend $3,000 in purchases in the first six months after opening the account. To put it in context, those 60,000 miles are worth $720 based on The Points Guy's valuations, and potentially even more with some simple planning and strategy. Even with the card's $350 annual fee (see rates and fees), you'll easily come out ahead in the first year with just the bonus. You won't get complimentary lounge access with the Delta Platinum Amex, but you'll still earn 3 miles per dollar spent on eligible Delta purchases and purchases made directly with hotels, 2 miles per dollar at restaurants worldwide and at US supermarkets, and 1 mile per dollar on all other purchases. Delta Platinum Amex card members also get Zone 5 priority boarding, a domestic main cabin round-trip companion certificate each time you renew the card (starting at the beginning of your second year), your first checked bag free on Delta flights and a Global Entry or TSA PreCheck fee credit worth up to $120. And if you're chasing Delta elite status, you may also like the Delta Platinum Amex. You'll get a $2,500 Medallion Qualification Dollar (MQD) head start each Medallion qualification year. You'll also earn $1 MQD for every $20 you spend on your card. Learn more about the Delta SkyMiles Platinum Amex Card. The Delta Reserve Amex is designed for frequent Delta travelers who are looking for the most premium option. With a $650 annual fee (see rates and fees), this card offers premium benefits tailored to enhance your flying experience and fast-track you toward Medallion status. One of the card's most valuable features is access to Delta Sky Club lounges. Card members receive 15 visits per Medallion qualification year when flying on Delta. To unlock unlimited Sky Club access, card members must spend $75,000 or more in purchases in a calendar year. You'll also receive four one-time guest passes each year to share the lounge experience with friends or family traveling with you on Delta. And if you pay for your flight with your Reserve card, you'll have access to the Amex Centurion lounge. The Delta Reserve Amex also comes with a welcome offer of 70,000 bonus miles after spending $5,000 in purchases in the first six months after account opening. Those 70,000 miles are worth $840 at The Points Guy's valuations. One standout perk is the annual companion certificate. This certificate allows you to bring a travel companion on a round-trip domestic flight in First Class, Comfort+ or Main Cabin; you'll pay no more than $250 in taxes and fees. This benefit can easily offset the card's annual fee when used for a high-value route. Other travel benefits include: Complimentary upgrades on Delta flights for Medallion members and even eligible non-elite flyers First checked bag free on Delta flights Zone 5 priority boarding 20% back on Delta in-flight purchases Global Entry or TSA PreCheck application fee credit (up to $120) Receive $2,500 MQDs per Qualification Year and earn $1 MQD for each $10 with MQD Boost to get closer to status next Medallion year The card earns 3 miles per dollar on eligible Delta purchases and 1 mile per dollar on everything else. Learn more about the Delta SkyMiles Reserve Amex Card. Though it's not a Delta credit card, the Amex Platinum can be a Delta flyer's best friend. You can earn 80,000 Membership Rewards bonus points after you use your new card to make $8,000 in purchases in the first six months after opening the account, and those points are transferable to Delta at a 1-to-1 ratio or to many other airline and hotel partners. Amex Platinum card members get 10 Delta Sky Club visits per program year (Feb. 1 through Jan. 31) with a same-day Delta boarding pass, with each visit covering all entries within a 24-hour period. Authorized users get their own 10 visits. After that, access is $50 per visit. If you spend $75,000 in a calendar year, you'll unlock unlimited access. Guests aren't free, but up to two can enter for $50 each. The Amex Platinum also opens the door to Amex's own Centurion Lounges, international American Express lounges, a collection of partner lounges and Priority Pass Select lounges. In total, it unlocks access to more than 1,300 airport lounges across 130 countries (and counting). In other words, the Amex Platinum provides more lounge access but charges a higher $695 annual fee than the Delta Reserve Amex (see rates and fees). A unique perk of this card is the ability to unlock elite status in a variety of programs. Just by holding the Amex Platinum, you're granted Gold status in Hilton's Honors and Marriott's Bonvoy programs. And on the car rental front, you'll get complimentary memberships in Hertz Gold Plus Rewards, Avis Preferred and National Car Rental Emerald Club Executive. You'll just need to enroll in each of these programs to use this benefit. For those who rely on ride-sharing to get around, the card comes with $200 in annual statement credits for Uber rides in the US and Uber Eats orders, split into monthly $15 credits, plus a bonus $20 each December. Again, you'll need to enroll before you use this benefit. You'll also get a credit of up to $120 to cover the fee for applying for either Global Entry or TSA PreCheck, up to $120 in annual Saks Fifth Avenue credits, up to $189 in annual credits toward a CLEAR® membership and up to $200 in annual airline fee credits to cover incidental fees — such as checked bags and in-flight refreshments — on an airline of your choice. Enrollment is also required for each of these benefits. And let's not forget that the Amex Platinum earns 5 points for every dollar you spend on airfare purchases made directly with any airline (Delta included), as well as on airfare and prepaid hotels booked through Learn more about The Platinum Card from American Express. If you own a business, large or small, Delta also has welcome offers on its line of business credit cards. Currently, you can earn 60,000 bonus miles on the Delta Gold Business card after spending $4,000 in purchases within the first six months after you open the account. The card has a zero-dollar introductory annual fee for the first year, then $150 a year thereafter (see rates and fees). Similar to the personal Delta Gold Amex, the Delta Gold Business Amex offers up to a $200 Delta flight credit after you spend $10,000 in purchases on your card in a calendar year, plus a free checked bag on Delta flights alongside Zone 5 priority boarding and no foreign transaction fees to sweat (see rates and fees). However, with this business card, you earn 2 miles per dollar on US shipping and select US advertising purchases (up to $50,000 per category per year) as well as Delta purchases and dining. Learn more about the Delta SkyMiles Gold Business Amex Card. The Delta Platinum Business Amex has a $350 annual fee (see rates and fees), but that outlay comes with a welcome offer of 70,000 bonus miles after you spend $6,000 in purchases in the first six months after opening the account. The card earns 1.5 miles per dollar on eligible transit and US shipping purchases, plus single eligible purchases of $5,000 or more. (Terms and miles cap apply.) If your purchase qualifies for a category that has a higher mileage accelerator, only the higher accelerator will apply. Flight benefits on the Delta Platinum Business Amex include all the same perks as the personal Delta Platinum Amex card, like a first checked bag for free on Delta flights, Zone 5 priority boarding, no foreign transaction fees (see rates and fees) and the same MQD structure, which can help you earn elite status. Learn more about the Delta SkyMiles Platinum Business Amex Card. Business owners willing to pay the card's $650 annual fee (see rates and fees) for the same Delta Sky Club access policy as the Delta Reserve should consider the Delta Reserve Business Amex. Right now, this card offers 80,000 bonus miles after you spend $10,000 in purchases in the first six months after opening the account. You'll earn 3 miles per dollar spent on Delta purchases with the Delta Reserve Business Amex. As for Medallion status, you'll receive $2,500 MQDs per Qualification Year and earn $1 MQD for each $10 with MQD Boost to get closer to status next Medallion Year. And finally, the Delta Reserve Business Amex provides complimentary upgrades for non-elite members when available and an annual companion certificate that can be used for domestic first-class travel each year upon renewal of your card. Plus, you won't have to fret over foreign transaction fees (see rates and fees). Learn more about the Delta SkyMiles Reserve Business Amex Card. For travelers who fly Delta occasionally and can take advantage of perks like a free checked bag at least twice per year, the Delta Gold Amex or Delta Gold Business Amex may offer solid value without a high annual fee. If you're aiming to earn elite status with Delta, the Delta Platinum Amex or Platinum Business Amex may be a better fit. These cards help you rack up MQDs, which are central to earning Delta Status. Frequent travelers who want airport lounge access may prefer the American Express Platinum Card over a Delta Reserve Card. The Amex Platinum offers broader lounge access (including Centurion, Priority Pass and Delta Sky Club), hotel and rental car elite status, and hundreds of dollars in annual credits — all of which help justify its $695 annual fee. However, if you're loyal to Delta, the Delta Reserve Amex or Delta Reserve Business Amex could be worth it for benefits exclusive to Delta cards, like the annual companion certificate, MQD Headstart and Sky Club perks with guest passes. The following FAQs have been answered by credit card expert and CNN Underscored travel editor Kyle Olsen. Which card is better Delta credit card, Gold or Platinum? Which card is better Delta credit card, Gold or Platinum? The Delta SkyMiles Platinum Amex is best for frequent Delta flyers who want premium perks like an annual companion ticket, a Global Entry/TSA PreCheck credit and help earning Medallion status, though it comes with a higher annual fee. The Delta Gold Amex is better for occasional travelers looking for solid benefits like a free checked bag and a lower fee. Go with Platinum for maximum rewards or Gold for a budget-friendly option. Is it possible to upgrade an existing Delta credit card? Is it possible to upgrade an existing Delta credit card? Yes, you can upgrade a Delta credit card (like Gold to Platinum or Reserve) by calling American Express or checking your online account. The annual fee will be prorated, but you may not get a welcome bonus. Welcome bonuses are usually for new applicants. For that reason, we suggest applying for a new card instead to earn the full bonus, though upgrading is faster and keeps your current account. Can you use a Delta credit card for other airlines? Can you use a Delta credit card for other airlines? You can use a Delta credit card for purchases on any airline, but perks like bonus miles and travel benefits typically apply only to Delta or its partners. You'll still earn SkyMiles on partner airline flights if you include your SkyMiles number, and you can redeem miles for partner flights, but not directly through other airlines' loyalty programs. CNN Underscored is committed to providing accurate, unbiased reviews based on in-depth research and real-world testing. As a Delta Gold Elite Medallion member who has covered the ins and outs of Delta's credit cards for years, travel editor Kyle Olsen is a credit cards expert. Our team evaluates credit cards by analyzing value, benefits and how they serve different types of travelers. Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
Yahoo
08-05-2025
- Business
- Yahoo
How airlines turned into 'credit card companies with wings'
While it's ubiquitous, air travel remains one of the wildest technical achievements in human history. Beyond the scientific feat that goes into achieving takeoff, airlines must coordinate tens of thousands of bags, employees, and travelers to make sure everyone gets to where they're going. Despite the sheer effort involved, moving people through the sky from point A to point B isn't what makes the bottom line soar in the airline business these days. Instead, the major players rake in billions of dollars thanks to a feat of financial engineering: loyalty and credit card spending. First developed in the 1980s, airline loyalty perks revolutionized the industry, creating a base of passionate customers eager to fly a specific carrier or use its credit card in exchange for things like free checked luggage, seat upgrades, early boarding, ever-popular airport lounge access, and "free" flights. A 2024 OAG analysis found that 82% of travelers worldwide were enrolled in at least one airline loyalty program. Delta SkyMiles is the world's largest, with over 120 million members. As of 2023, 31 million airline credit cards had been issued in the US, according to the trade association Airlines for America, and 57% of points were accumulated through cardholder spending. The combination of people flying and swiping their credit cards has ballooned airline loyalty into a juggernaut and a primary source of airlines' income — so much so that carriers would struggle to profit without it. Federal airline filings show loyalty represents over $25 billion in yearly revenue. Among the Big Four in 2024, Southwest earned about $2.2 billion from its loyalty program, or about 8% of its total revenue, United $2.9 billion (5%), American $6.1 billion (11.3%), and Delta $7.4 billion (12%). Airlines enjoy myriad benefits beyond a loyal customer base, a strong brand, and free marketing whenever someone swipes their card around town. Frequent flyer programs increase a carrier's valuation and generate consistent revenue streams. Played correctly, these programs can also be good for customers looking to optimize their points for vacations. But there are some risks to loyalty from a customer perspective. Carriers can, and will, adjust the value of their points on a whim, boosting their bottom lines at the expense of customers. The business has morphed airlines into miniature central banks, printing points as currency and often profiting more from selling them than from actually flying airplanes, or as TJ Dunn, a points guru and editor in chief at the Prince of Travel, told me: "A lot of people call airlines credit card companies with wings." American Airlines launched the first modern major airline loyalty program, AAdvantage, in 1981. United's MileagePlus and Delta Air Lines' SkyMiles programs followed that same year, while Southwest Airlines' Rapid Rewards program began in 1987. In the same decade, airlines decided to go beyond simply rewarding frequent flyers and began building what has become one of their biggest cash cows: co-branded credit cards. By partnering with banks, airlines can monetize these loyalty miles and points, creating a source of cash to supplement the basic flying business. Airline points are, in essence, an IOU created out of thin air. Carriers turn around and sell these points and miles to banks in exchange for US dollars to fund their operations, like buying planes and paying pilots. Banks then distribute those to holders of the co-branded cards when they make everyday purchases — including on nonflying items and activities. Customers then redeem those IOUs for airline services. Put another way, you're turning the money you spent on groceries, gas, clothes, and that $500 VR headset you barely use into jet fuel for your next flight. Banks like this agreement because it drives high spending and brand loyalty. Airlines love it because it generates repeat customers and a constant loop of revenue as people shop. The more a cardholder spends, the more points they earn, and the more a bank pays the airline. Consumers love it because it feels like they're getting free money when redeeming points. On paper, everyone wins. Even if everyone comes off happy, the setup is an especially good deal for the airlines. A March report from the travel company said each airline point is generally valued at about 1 cent, in terms of how much value customers receive when they redeem them, but banks buy them for anywhere from 1.5 to 2.5 cents before any bulk discounts. The margins for selling points range from 39% to 53%. Airlines regularly lure new cardholders with enticing sign-on bonuses and other built-in perks, like travel credits and free checked luggage. Southwest and United partner with JPMorgan Chase, American works with Citibank, and Delta partners with American Express. Each airline has different tiers, and the annual fees — from which airlines receive a kickback — can range from $0 to $695 a year. There are some ways savvy travelers can gain the upper hand. Customers can book reward itineraries via airline websites, paying only taxes and fees, often at steep discounts compared with the cash cost of the same flight. For example, a one-way United business class flight from Los Angeles to Sydney on June 4 costs 100,000 points (plus $33). The average redemption value of United points is 1.3 cents per point, meaning the points needed to book the flight equal roughly $1,300 — but the ticket paid for outside the loyalty program costs $4,988. "I've gotten so many good redemptions," said Dunn, who largely flies business class using points instead of paying the multithousand-dollar cash price. "One was a last-minute United Polaris from San Francisco to French Polynesia for 85,000 points. Another was American from Los Angeles to Sydney for 65,000 points." Offering cheaper or almost free flights, upgraded seats, or complimentary checked luggage seems like a self-own by the airlines — why give money away? But all the special offers are offset by several factors. One, the cost to airlines of letting you redeem points is often far lower than the money they earned up front from selling those points to the banks, especially during off-peak times. So you may feel like you're getting a deal, but the bank already covered your redemption for that "free" seat. Two, spending to earn enough points or status for a flight or upgrade means the airline has already secured thousands of dollars' worth of your business many times over, whether you booked a flight with them instead of a competitor (whose standard cost may have been lower) or used its credit card. "Having an airline credit card tends to make you a stickier customer," Savanthi Syth, a Raymond James analyst, told me. Three, the complimentary or points-bought upgrades are typically business- or first-class seats that would go unoccupied anyway or be used for last-minute bumps on the day of travel. The fourth and final way that airlines end up winning the points game is perhaps the biggest and simplest: They're relying on people never using those points. The McKinsey consulting group estimated in 2018 that 30 trillion airline points went unused globally. That's billions of dollars' worth of unredeemed flights. Unredeemed points are listed as a liability on an airline's balance sheet to account for potential redemptions, but the ones that go unused are essentially "free money" because airlines keep the revenue from issuing the points without having to offer any actual reward in return. And the cost to keep unredeemed points in the system is virtually zero. A 2024 federal filing said Southwest had $4.8 billion worth of unused points on its balance sheet; Delta has about $9 billion. Many people are so price-sensitive that they fly whichever airline has the lowest cost and never earn enough points from flying on a single carrier to redeem anything meaningful. Some people don't travel as much as they think they will when they sign up for a co-branded credit card — especially younger people like students. This same group may not have the cash funds to pay for a vacation beyond the points flight redemption. And even when people do end up using them, airlines can mitigate the hit by manipulating the number of seats available for redemptions and how many points they cost based on factors like demand and capacity. This type of price increase pushes frequent flyers away from using rewards to offset an expensive cash ticket. Any good loyalty program comes with the risk of people milking too much out of it, at least from the airline's point of view. This has prompted carriers to periodically — and unexpectedly — change the level of points, spending, or eligibility required to earn status, freebies, and benefits. The goal is to maximize loyalty revenue, reduce flight redemptions, and elevate brand exclusivity by making people pay more for what was previously offered at lower rates. But it also runs the risk of running people off. The latest example of this switcheroo is when United increased virtually all of its co-branded credit card annual fees in March by between $55 and $245. Delta similarly upped the yearly cost for its Amex cards in 2024. The buck didn't stop there, with both airlines also overhauling parts of their loyalty programs. Delta added limitations on its Sky Club lounge access and made earning status more costly by basing it on spending rather than miles flown. Delta said the changes addressed a need to manage overcrowding at airport lounges and how many people earn elite status. United's loyalty changes were tamer, such as upping the price for its lounge access, though they still frustrated members. Even the new credit card "perks" — which the company said would enhance their value by targeting different consumer travel styles — have some noticeable drawbacks. Sally French, a NerdWallet analyst, told me that United's new benefits have "coupon book energy to the max." Customers can use travel credits on things like hotels, ride-hailing services, rental cars, Instacart, and flights with the semiprivate charter company JSX. These may seem useful in theory, but the problem is that the $60 to $150 annual credit for Uber and Lyft is allotted at $5 to $18 a month, depending on the card. The same goes for Instacart. French said the up to $200 annual JSX credit may not put a huge dent in the company's pricier airfare, which starts at about $200 one way for short hops but can reach $1,000 or more on longer flights. And the up to $200 hotel credit? That has to be put toward bookings at Renowned Hotels and Resorts — it can't be used on your preferred brand, which might be Hyatt or Marriott. Given the limited value and scope, many customers are leaving these deals on the table — but the airline already cashed in on the sign-up with the bank. "Most consumers are using few to none of these benefits," French told me. Still, French said there are some, albeit few, positives to airline loyalty changes, like less crowded lounges and more membership exclusivity. And many cardholders will likely stay loyal despite the changes. Delta's president, Glen Hauenstein, said in the airline's January earnings call that about 1 million people signed up for its Amex card in 2024. In its full-year earnings call, United also said it saw 1 million new credit card acquisitions last year — though it's unclear how its 2025 changes will affect sign-ups. Airlines are facing a grim outlook right now. Economic uncertainty and President Donald Trump's tariff war have sent airline stocks tumbling and threaten profit outlooks. Recession worries are testing travelers' willingness to fly, and a reduction in domestic government travel following federal layoffs hasn't helped. Still, loyalty may be a saving grace because, regardless of a recession, credit card spending and subsequent earnings aren't going away — a buffer that helped airlines' financials during the pandemic and could again if there's a downturn this year. Delta's April earnings showed loyalty revenue increased by 7% year over year, including the $2 billion made from its Amex partnership. This was down from the 12% loyalty revenue increase the airline posted between the first quarters of 2023 and 2024 but still high enough to keep overall growth in the green. Similarly, United's earnings revealed a 9.4% increase in loyalty revenue year over year, a slide from the 15% bump in the first quarter of 2024 but still a strong number. American's 5% increase in loyalty revenue, driven by credit card swipes, was the lowest of the three mainline carriers. Southwest did not disclose its year-over-year loyalty performance. Neither airline reported a quarterly profit but said loyalty padded their bottom lines: "We had a record first-quarter spend in our co-branded credit card," Southwest's chief operating officer, Andrew Watterson, said during the airlines' earnings call. The golden goose, however, is under threat. The Department of Transportation in September began investigating the programs at American, Delta, Southwest, and United to determine whether they were engaging in "unfair, deceptive, or anticompetitive practices." Then-Transportation Secretary Pete Buttigieg said the airlines' ability to devalue their points is hurting Americans and their families. It's unclear how the Trump administration will carry out the investigation. Even with the potential for regulatory and economic roadblocks, loyalty ecosystems are imperative to an airline's success. As the people-moving business has gotten more cutthroat and margins have been squeezed, the major carriers are relying more than ever on revenue from nonticket sources. While bag and seat-selection fees draw customers' ire, loyalty points and credit card tie-ins almost feel like a game. That's pushing airlines away from their core flying business and making them into mini financial institutions. In Gen Z talk, it's giving less Wright brothers and more JPMorgan. Taylor Rains is a senior aviation reporter on the transportation team focused on all things aircraft and airlines. Read the original article on Business Insider
Business Insider
08-05-2025
- Business
- Business Insider
'Credit card companies with wings'
While it's ubiquitous, air travel remains one of the wildest technical achievements in human history. Beyond the scientific feat that goes into achieving takeoff, airlines must coordinate tens of thousands of bags, employees, and travelers to make sure everyone gets to where they're going. Despite the sheer effort involved, moving people through the sky from point A to point B isn't what makes the bottom line soar in the airline business these days. Instead, the major players rake in billions of dollars thanks to a feat of financial engineering: loyalty and credit card spending. First developed in the 1980s, airline loyalty perks revolutionized the industry, creating a base of passionate customers eager to fly a specific carrier or use its credit card in exchange for things like free checked luggage, seat upgrades, early boarding, ever-popular airport lounge access, and "free" flights. A 2024 OAG analysis found that 82% of travelers worldwide were enrolled in at least one airline loyalty program. Delta SkyMiles is the world's largest, with over 120 million members. As of 2023, 31 million airline credit cards had been issued in the US, according to the trade association Airlines for America, and 57% of points were accumulated through cardholder spending. The combination of people flying and swiping their credit cards has ballooned airline loyalty into a juggernaut and a primary source of airlines' income — so much so that carriers would struggle to profit without it. Federal airline filings show loyalty represents over $25 billion in yearly revenue. Among the Big Four in 2024, Southwest earned about $2.2 billion from its loyalty program, or about 8% of its total revenue, United $2.9 billion (5%), American $6.1 billion (11.3%), and Delta $7.4 billion (12%). Airlines enjoy myriad benefits beyond a loyal customer base, a strong brand, and free marketing whenever someone swipes their card around town. Frequent flyer programs increase a carrier's valuation and generate consistent revenue streams. Played correctly, these programs can also be good for customers looking to optimize their points for vacations. But there are some risks to loyalty from a customer perspective. Carriers can, and will, adjust the value of their points on a whim, boosting their bottom lines at the expense of customers. The business has morphed airlines into miniature central banks, printing points as currency and often profiting more from selling them than from actually flying airplanes, or as TJ Dunn, a points guru and editor in chief at the Prince of Travel, told me: "A lot of people call airlines credit card companies with wings." American Airlines launched the first modern major airline loyalty program, AAdvantage, in 1981. United's MileagePlus and Delta Air Lines' SkyMiles programs followed that same year, while Southwest Airlines' Rapid Rewards program began in 1987. In the same decade, airlines decided to go beyond simply rewarding frequent flyers and began building what has become one of their biggest cash cows: co-branded credit cards. By partnering with banks, airlines can monetize these loyalty miles and points, creating a source of cash to supplement the basic flying business. Airline points are, in essence, an IOU created out of thin air. Carriers turn around and sell these points and miles to banks in exchange for US dollars to fund their operations, like buying planes and paying pilots. Banks then distribute those to holders of the co-branded cards when they make everyday purchases — including on nonflying items and activities. Customers then redeem those IOUs for airline services. Put another way, you're turning the money you spent on groceries, gas, clothes, and that $500 VR headset you barely use into jet fuel for your next flight. Banks like this agreement because it drives high spending and brand loyalty. Airlines love it because it generates repeat customers and a constant loop of revenue as people shop. The more a cardholder spends, the more points they earn, and the more a bank pays the airline. Consumers love it because it feels like they're getting free money when redeeming points. On paper, everyone wins. Even if everyone comes off happy, the setup is an especially good deal for the airlines. A March report from the travel company said each airline point is generally valued at about 1 cent, in terms of how much value customers receive when they redeem them, but banks buy them for anywhere from 1.5 to 2.5 cents before any bulk discounts. The margins for selling points range from 39% to 53%. Airlines regularly lure new cardholders with enticing sign-on bonuses and other built-in perks, like travel credits and free checked luggage. Southwest and United partner with JPMorgan Chase, American works with Citibank, and Delta partners with American Express. Each airline has different tiers, and the annual fees — from which airlines receive a kickback — can range from $0 to $695 a year. Having an airline credit card tends to make you a stickier customer. There are some ways savvy travelers can gain the upper hand. Customers can book reward itineraries via airline websites, paying only taxes and fees, often at steep discounts compared with the cash cost of the same flight. For example, a one-way United business class flight from Los Angeles to Sydney on June 4 costs 100,000 points (plus $33). The average redemption value of United points is 1.3 cents per point, meaning the points needed to book the flight equal roughly $1,300 — but the ticket paid for outside the loyalty program costs $4,988. "I've gotten so many good redemptions," said Dunn, who largely flies business class using points instead of paying the multithousand-dollar cash price. "One was a last-minute United Polaris from San Francisco to French Polynesia for 85,000 points. Another was American from Los Angeles to Sydney for 65,000 points." Offering cheaper or almost free flights, upgraded seats, or complimentary checked luggage seems like a self-own by the airlines — why give money away? But all the special offers are offset by several factors. One, the cost to airlines of letting you redeem points is often far lower than the money they earned up front from selling those points to the banks, especially during off-peak times. So you may feel like you're getting a deal, but the bank already covered your redemption for that "free" seat. Two, spending to earn enough points or status for a flight or upgrade means the airline has already secured thousands of dollars' worth of your business many times over, whether you booked a flight with them instead of a competitor (whose standard cost may have been lower) or used its credit card. "Having an airline credit card tends to make you a stickier customer," Savanthi Syth, a Raymond James analyst, told me. Three, the complimentary or points-bought upgrades are typically business- or first-class seats that would go unoccupied anyway or be used for last-minute bumps on the day of travel. The fourth and final way that airlines end up winning the points game is perhaps the biggest and simplest: They're relying on people never using those points. The McKinsey consulting group estimated in 2018 that 30 trillion airline points went unused globally. That's billions of dollars' worth of unredeemed flights. Unredeemed points are listed as a liability on an airline's balance sheet to account for potential redemptions, but the ones that go unused are essentially "free money" because airlines keep the revenue from issuing the points without having to offer any actual reward in return. And the cost to keep unredeemed points in the system is virtually zero. A 2024 federal filing said Southwest had $4.8 billion worth of unused points on its balance sheet; Delta has about $9 billion. Many people are so price-sensitive that they fly whichever airline has the lowest cost and never earn enough points from flying on a single carrier to redeem anything meaningful. Some people don't travel as much as they think they will when they sign up for a co-branded credit card — especially younger people like students. This same group may not have the cash funds to pay for a vacation beyond the points flight redemption. And even when people do end up using them, airlines can mitigate the hit by manipulating the number of seats available for redemptions and how many points they cost based on factors like demand and capacity. This type of price increase pushes frequent flyers away from using rewards to offset an expensive cash ticket. Any good loyalty program comes with the risk of people milking too much out of it, at least from the airline's point of view. This has prompted carriers to periodically — and unexpectedly — change the level of points, spending, or eligibility required to earn status, freebies, and benefits. The goal is to maximize loyalty revenue, reduce flight redemptions, and elevate brand exclusivity by making people pay more for what was previously offered at lower rates. But it also runs the risk of running people off. The latest example of this switcheroo is when United increased virtually all of its co-branded credit card annual fees in March by between $55 and $245. Delta similarly upped the yearly cost for its Amex cards in 2024. The buck didn't stop there, with both airlines also overhauling parts of their loyalty programs. Delta added limitations on its Sky Club lounge access and made earning status more costly by basing it on spending rather than miles flown. Delta said the changes addressed a need to manage overcrowding at airport lounges and how many people earn elite status. Most consumers are using few to none of these benefits. United's loyalty changes were tamer, such as upping the price for its lounge access, though they still frustrated members. Even the new credit card "perks" — which the company said would enhance their value by targeting different consumer travel styles — have some noticeable drawbacks. Sally French, a NerdWallet analyst, told me that United's new benefits have "coupon book energy to the max." Customers can use travel credits on things like hotels, ride-hailing services, rental cars, Instacart, and flights with the semiprivate charter company JSX. These may seem useful in theory, but the problem is that the $60 to $150 annual credit for Uber and Lyft is allotted at $5 to $18 a month, depending on the card. The same goes for Instacart. French said the up to $200 annual JSX credit may not put a huge dent in the company's pricier airfare, which starts at about $200 one way for short hops but can reach $1,000 or more on longer flights. And the up to $200 hotel credit? That has to be put toward bookings at Renowned Hotels and Resorts — it can't be used on your preferred brand, which might be Hyatt or Marriott. Given the limited value and scope, many customers are leaving these deals on the table — but the airline already cashed in on the sign-up with the bank. "Most consumers are using few to none of these benefits," French told me. Still, French said there are some, albeit few, positives to airline loyalty changes, like less crowded lounges and more membership exclusivity. And many cardholders will likely stay loyal despite the changes. Delta's president, Glen Hauenstein, said in the airline's January earnings call that about 1 million people signed up for its Amex card in 2024. In its full-year earnings call, United also said it saw 1 million new credit card acquisitions last year — though it's unclear how its 2025 changes will affect sign-ups. Airlines are facing a grim outlook right now. Economic uncertainty and President Donald Trump's tariff war have sent airline stocks tumbling and threaten profit outlooks. Recession worries are testing travelers' willingness to fly, and a reduction in domestic government travel following federal layoffs hasn't helped. Still, loyalty may be a saving grace because, regardless of a recession, credit card spending and subsequent earnings aren't going away — a buffer that helped airlines' financials during the pandemic and could again if there's a downturn this year. Delta's April earnings showed loyalty revenue increased by 7% year over year, including the $2 billion made from its Amex partnership. This was down from the 12% loyalty revenue increase the airline posted between the first quarters of 2023 and 2024 but still high enough to keep overall growth in the green. Similarly, United's earnings revealed a 9.4% increase in loyalty revenue year over year, a slide from the 15% bump in the first quarter of 2024 but still a strong number. Even with the potential for regulatory and economic roadblocks, loyalty ecosystems are imperative to an airline's success. American's 5% increase in loyalty revenue, driven by credit card swipes, was the lowest of the three mainline carriers. Southwest did not disclose its year-over-year loyalty performance. Neither airline reported a quarterly profit but said loyalty padded their bottom lines: "We had a record first-quarter spend in our co-branded credit card," Southwest's chief operating officer, Andrew Watterson, said during the airlines' earnings call. The golden goose, however, is under threat. The Department of Transportation in September began investigating the programs at American, Delta, Southwest, and United to determine whether they were engaging in "unfair, deceptive, or anticompetitive practices." Then-Transportation Secretary Pete Buttigieg said the airlines' ability to devalue their points is hurting Americans and their families. It's unclear how the Trump administration will carry out the investigation. Even with the potential for regulatory and economic roadblocks, loyalty ecosystems are imperative to an airline's success. As the people-moving business has gotten more cutthroat and margins have been squeezed, the major carriers are relying more than ever on revenue from nonticket sources. While bag and seat-selection fees draw customers' ire, loyalty points and credit card tie-ins almost feel like a game. That's pushing airlines away from their core flying business and making them into mini financial institutions. In Gen Z talk, it's giving less Wright brothers and more JPMorgan.
Forbes
29-04-2025
- Entertainment
- Forbes
Doechii Hits No. 1 For The First Time On Several Charts
Doechii's Alligator Bites Never Heal returns to five charts in the U.K., reaching No. 1 for the ... More first time on two of them. ATLANTA, GEORGIA - APRIL 24: Doechii performs onstage during the Uber and Delta SkyMiles partnership celebration at The Eastern on April 24, 2025 in Atlanta, Georgia. (Photo byfor Uber and Delta) Doechii just keeps getting bigger, seemingly by the day, and Alligator Bites Never Heal is growing by leaps and bounds on the charts. The rising hip-hop superstar's mixtape, which dropped in August 2024, has only picked up steam since its release. Months after winning the Grammy Award for Best Rap Album, the project is still reaching new heights, and this frame, it surges back onto several U.K. rankings – even leading the charge on several rosters. Alligator Bites Never Heal appears on five U.K. music charts. It didn't land on any of them just a few days ago, though it's also not new to any of the lists. Doechii doesn't just reclaim space on these tallies — she manages a new career best on every single one where her breakout effort can now be found. Among the five tallies where Alligator Bites Never Heal reappears, two stand out above the rest. This week, the mixtape hits No. 1 on both the Official Vinyl Albums and the Official Hip-Hop and R&B Albums charts. These wins mark Doechii's first-ever No. 1 placements on albums rosters in the U.K. As if two No. 1s weren't enough, Doechii also earns a pair of top 10 appearances on other tallies. Alligator Bites Never Heal reenters the Official Physical Albums chart at No. 4. Meanwhile, it settles at No. 5 on the Official Albums Sales roster. Both placements are new personal bests for the rapper. Over on the U.K.'s most competitive album ranking, the Official Albums chart, which blends sales and streaming data, Alligator Bites Never Heal also scores a major new win. The Grammy-winning mixtape reenters at No. 40, and this week marks the first time it's cracked the top 40. While Alligator Bites Never Heal continues climbing, the set's big single "Denial Is a River' remains on four U.K. charts, helping keep attention focused on the Grammy winner's current era. However, it's an older tune — "Anxiety" — that's managing an even bigger resurgence. Originally released as a standalone single years ago, "Anxiety" recently went viral, and a brand new music video Doechii dropped to capitalize on its newfound popularity is helping it continue to soar. The Gotye-sampling track is truly thriving in the U.K., appearing on five separate tallies this frame. It even debuts on one and sits comfortably inside the top 10 on four others.
Yahoo
26-04-2025
- Business
- Yahoo
Trending in Texoma — New way to earn SkyMiles to 18th century French owned sword
WICHITA FALLS (KFDX/KJTL) — Whether it's happening on the other side of the country, somewhere else in Texas, or right in our communities, Digital Producer Mariana Vela takes a look at the stories currently generating the most interest on social media. Social Rundown: Snake on a marg, 3D print saves owl, and new Bomb Pop's Largest economies globally The United States and China are the two largest economies in the world. One state has surpassed Japan. California Gov. Newsom is set to lead the way across the globe as he commits to investing in the state's people. World economic outlook data show that California reached $4.1 trillion in 2024 and is right behind Germany, which sits in third place. Delta SkyMiles New offers for members, as they can earn more miles by linking their accounts to Uber and Uber Eats. Napoleon Sword The 18th-century French general's sword, made of gilded silver and featuring a shank made of shark skin, is going up for auction and is expected to sell for around $1.1 million. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
