According to a group of aviation industry representatives, legislation moving through the senate could spell the end of credit card rewards. The amendment proposed by Senators Roger Marshall and Dick Durbin, and part of the crypto-focused GENIUS Act, calls for increased competition among credit card providers and reduced swipe fees.
Industry group claims legislation would weaken airline loyalty programs
On Monday, a letter sent to senators was signed by airlines, manufacturers, and labor unions opposing the legislation, saying it could lead to weakened airline loyalty programs, resulting in “a contraction in airline activity and jobs.” Among the letter’s signatories were United Airlines, Boeing, Airbus, American Airlines, and Southwest Airlines. The trade group Airlines for America is leading the campaign. However, the legislation has support from the retail industry, including the National Retail Federation.
Monday’s letter referred to research by Airlines for America, which says more than 31 million Americans have airline travel reward cards, resulting in about $25 billion in economic activity in 2023. The report also stated that in 2023, 57% of all points or frequent flyer miles issued were brought about by airline credit card use.
The letter said: “Americans value and enjoy credit card rewards programs because they reward consumers for dollars that they would be spending no matter what. Many may be unpleasantly surprised if Congress disrupts those programs.”
TJ Dunn, a points guru and editor-in-chief at the Prince of Travel, emphasized the significance of credit cards to airlines, saying: “A lot of people call airlines credit card companies with wings.”
Unions representing pilots, Boeing workers, and flight attendants also signed the letter, saying that weakened loyalty programs would result in fewer flights and “a contraction in airline activity and jobs.”
On the other hand, Senator Durbin said the legislation would lead to an annual $15 billion in savings for businesses and consumers. Currently, yearly swipe fees cost merchants around $100 billion.
