Originally Posted by
LittleBoyBlew
Then how come the big banks and big investors are always willing to pump money to keep these airlines operating? Easy answer, LEGAL money laundering scheme!!
Airlines can be cash cow, depending how far you're invested. Somehow they figure they're going to make money on the deal.
Example: Remember shortly after 9/11 UAL got in a lot of trouble. Chase Manhattan, in exchange for lots of stock, fronted them loans up to about $20B. Shortly, thereafter, a new Mileage Plus club promo came out and all members got Chase cards and more miles for using the cards to book flights. $$$ The marketing campaign really stuck out in my mind.
Did Chase make money? Don't know, but if you go to the UAL page now, you'll see those same cards. Not to mention, Chase came out relatively unscathed since '07. Remember, credit card companies make lots or money off of merchant services fees that the companies pay, not just on interest the card holder pays.