If the major U.S. airlines relied solely on passengers, they would lose money.

What dramatically changes the picture for them is the credit card business in which they are active.

This was reported by The Economist earlier this month.

The model is simple: airlines sell miles for cash to credit card issuers.

Miles are loyalty points awarded in frequent flyer programs, usually based on flight distance or spending amounts, and can be redeemed for benefits such as tickets, upgrades, or other services.

Cardholders earn miles when making credit purchases, and those miles can then be converted into flights or other perks.

It is a win-win situation for all sides.

According to The Economist, in the first quarter of this year American Express paid Delta Airlines two point one billion dollars, an amount comparable to Delta’s entire operating profit.

Citigroup transferred one point four billion dollars to American Airlines, and J.P. Morgan paid eight hundred million dollars to United.

Combined, the turnover of these programs across the leading airlines reaches tens of billions of dollars annually.

The revenue from credit card issuers allows airlines to reduce ticket prices and compete in the crowded U.S. market.

It also provides them with stability and enables long-term investments in aircraft and infrastructure—an advantage in an industry often shaken by fuel prices, business cycles, and international crises.

At the same time, because airlines control the redemption of miles, they can steer customers toward less attractive flights, thereby filling empty seats.

Banks and credit card companies also benefit.

Their cards, even those not directly branded with airlines, now offer access to luxury lounges, premium airport services, and the option to convert points into miles across multiple carriers.

The financial source of income for credit card issuers, according to The Economist, lies in transaction fees: when a customer spends one hundred dollars on a credit card, two dollars go to the issuer and about one and a half dollars are returned to the customer in benefits.

Last year, fees for issuing companies amounted to one hundred eighty-seven billion dollars.

On the other side, in the past eight years Delta and American Airlines have doubled their income from selling miles to credit card holders; United Airlines recorded a seventy percent increase.

Many airlines now determine frequent flyer status based on credit card spending rather than flight distance.

A customer can therefore reach the top tier of American Airlines’ loyalty program without flying even a single mile.

The companies are also expanding benefits: Delta grants miles for Uber rides, and United for shopping at major retail chains.

However, the system also has drawbacks: lounges are overcrowded, credit card fees keep rising, and some travelers dislike the new profile of the so-called “frequent flyer.”