Originally Posted by
bluespoon
How are you coming up with this? All legacy’s would have lost money in 2024 for example if it wasn’t for their credit cards. Their actual operation is unprofitable. The only reason Spirit and F9 and allegiant made money is because they were actually low cost operators. Now they’re not anymore and have no loyalty that’s why they’re losing money. You’re thinking like legacy’s CEOs think, trying to make it seem like it’s not that big of a deal in case the gov tries something. One of the reasons why Ryanair is profitable in Europe is their governments actually regulate their Legacy carriers from making too much money from the loyalty programs
You really don't understand this very well. Let me give you another example in the opposite direction to show the stupidity in the reasoning you are using.
All airlines would be wildly profitable if it weren't for having to buy fuel!!!! If I just removed that dollar amount from the cost side of the equation for every airline, they would all make so much money.
That is the equivalent to your logic with credit cards (just on the cost side). Bottom line is they break out the revenue from the cards but they don't break out the associated cost. You can't look at the revenue as a stand alone, just like you can't look at the fuel cost as a stand alone. Both are part of the entire operation, some items on the earning report get a specific line, some don't. We don't define the costs to the operation of all the credit card miles, because they are used on random flights and random other purchases and are all mixed in on flights where a majority of the folks are paying cash for all or part of their ticket/fees and airlines just account for the cost of the entire trip (or entire seat mile). But, if there was no such thing as miles from a credit card , there would also be no such thing as the costs that those miles generate. How much is that cost? we don't know, but it certainly is not zero.
Obviously both the airline and the Credit Card company like the arrangement, so apparently the costs associated with the miles (for each side) don't exceed the benefit they believe they are getting, but that doesn't mean the costs are zero.
The problem for smaller carriers and especially for LCCs is that the customer base is not the same as the legacies and that customer base is not as sought after as the legacies, so credit card companies are not as willing to pay high prices for miles to get that less desirable customer base. This is not my opinion, this is the reality of what the Credit Card companies are doing. This is not some sort of slam on those customers, it is just the realities of the business and who is willing to pay what for credit cards/miles/perks/loyalty.