Originally Posted by
fw90
that we know about. Too much to unpack to attempt to answer.
isn’t points redemption counted as a revenue fare? Like bank of points buys the ticket on the behalf of the customer? Counted in the first profit category? So remove these points flights. They are estimated at 18-20% of revenue fares. Do you think they could survive even if half those tickets were bought by people and not points? If they lost 9% of their loads/revenue/passengers whatever.
credit card income is a check sent to United from chase or whoever as payment for their name on the card basically. Counted in the second category?
with points being diluted the ROI on interest payments has to be insane at 20-30% interest. Looking at profits of credit cards says yes. and the more diluted the points are the more revenue they make. Small points back means it takes what 30k spend on the card to buy that one leg from den to Omaha, but if it’s not paid off that month the finance charge is 6k plus.
My point no pun intended is the points game is very very very lucrative. It has given 3 -1/2 airlines their business model and made them into basically a protected class of company. If that were removed they would fold in my opinion unable to make a profit.
Only passengers buying ticket is counted in ticket revenue. All other sales, including buying the wifi and paying for an upgraded seat at the gate or even on the plane, is "other revenue".
It makes no sense that United and Delta can charge $8k for a first class seat and put 60 of those on a WB and fly it to Asia and somehow is not profitable, but Frontier can fly around with the cheapest passengers ever and be profitable.
United and Delta are profitable even without that revenue. Airlines don't make money off the interest people pay on their credit cards. Its only when they redeem miles, and the credit card company buys them a ticket just like your employer might buy you a ticket.
Airline credit cards has to be the most misunderstood conspiracy closely approaching flat earth and chemtrails.