In 2025, Delta Air Lines generated $8.2 billion from its partnership with American Express, representing 14% of the airline’s adjusted operating revenue and 1.4 times its adjusted operating income. This figure underscores a growing trend within the airline industry: revenue from co-branded credit card programs is increasingly eclipsing income from traditional airline operations.
American Airlines reported $6.2 billion in revenue from its co-brand partners, a sum four times its adjusted operating income. The financial dynamic highlights a fundamental shift in how airlines generate profit, with loyalty programs and credit card affiliations becoming central to their bottom lines.
Former American Airlines CEO Doug Parker recently discussed this financial reality on the “Airlines Confidential” podcast, explaining how Citibank’s approximately $6 billion annual payment to American Airlines is allocated based on miles redemption patterns. Parker argued that this approach is flawed, as it attributes revenue to routes based on where miles are spent, rather than where the credit card spending originates. He suggested that revenue generated by New York-based cardholders should be tied to flights originating in or destined for New York, even if those miles are redeemed on different routes.
Parker’s analysis suggests that routes serving New York, Los Angeles, and Chicago may appear unprofitable under traditional accounting methods, but are, in fact, highly valuable when factoring in the associated credit card revenue. This realization has prompted a reevaluation of network strategies, particularly in competitive markets.
Delta and United Airlines have already begun to prioritize markets with high concentrations of affluent cardholders. Delta is expanding its Delta One Lounges at JFK airport and aims to generate $10 billion in annual revenue from American Express by 2029. United, in partnership with JPMorgan Chase, has increased premium seating capacity by 46% since 2019 and now offers reduced mileage earning rates for cardholders. These moves demonstrate a clear understanding that the most valuable asset is the cardholder, not simply the passenger in the seat.
American Airlines’ hub structure presents a challenge in this new landscape. Its two largest eastern hubs, Philadelphia and Charlotte, do not possess the same concentration of high-spending cardholders as markets like New York or Washington, D.C. While American maintains a presence in New York and Washington, it lacks the dominant market share necessary to capture a significant portion of the premium cardholder base.
The battle for dominance in Chicago exemplifies this dynamic. American Airlines operates a major hub at O’Hare International Airport, but faces fierce competition from United Airlines, which has been more aggressive in tying its premium product and card incentives to the Chicago market. The dispute over gate access at O’Hare, currently subject to legal challenges, is not simply about operational efficiency, but about securing access to the lucrative Chicago cardholder market.
Looking ahead, airlines are increasingly focusing on markets with high median household incomes and strong credit card spending patterns. Boston, with a median household income exceeding $117,000, presents a compelling opportunity. The city lacks a dominant hub carrier and boasts a large base of professionals in finance, biotech, and education. San Diego, with a median household income around $130,000, is another attractive market with no single dominant carrier.
The logic extends to smaller airports as well. Locations like Naples, Florida, West Palm Beach, and Santa Barbara, while serving limited passenger volume, are surrounded by affluent zip codes and a high concentration of premium cardholders. Breeze Airways, a low-cost carrier, is positioned to capitalize on these markets by becoming the dominant carrier in these wealthy, underserved areas.
The airline industry’s transformation into a credit card affiliate industry necessitates a shift in strategic thinking. Airlines are no longer simply focused on optimizing routes and passenger loads; they are prioritizing the acquisition and retention of high-spending cardholders. The next phase of growth will be defined by identifying and capturing these valuable customers, even if it means rethinking traditional hub strategies and prioritizing underserved wallets over established routes.
