A proposal from U.S. President Donald Trump to impose a 10% cap on credit-card interest rates - if implemented - could materially affect the lucrative loyalty programmes operated by U.S. airlines, industry advisers said at the Airline Economics conference in Dublin on Wednesday.
Airlines have turned frequent-flyer schemes into a steady source of cash by selling miles to third-party partners, primarily credit-card issuers. Those banks, in turn, award miles to their cardholders based on spending. The more consumers charge, the more miles they earn and the more banks pay airlines for those miles.
Pooja Gardemal, managing director at BK Associates, said the measure would slice into card issuers' profits and alter the price per mile the banks can pay. "If you say that we’re going to cap it at 10%, that’s a huge chunk of profit that has just disappeared and the value they’re getting per mile will change dramatically," she said. Gardemal's Maryland-based consultancy advises airlines on frequent-flyer programmes.
Unclear how cap would be implemented
Gardemal warned that such a cap would harm the economics of airline loyalty programmes and reiterated banks' concerns that consumer access to credit could be restricted. President Trump has proposed a one-year cap at 10%, but he has not outlined how it would be put into practice.
The concept faces an uncertain route in Washington - it would likely need action by Congress - and there was no change on January 20 despite an earlier suggested start date from the White House.
Banks have reacted strongly against the proposal. JPMorgan Chase Chief Executive Jamie Dimon told critics the cap would amount to an "economic disaster," underscoring the financial sector's opposition.
Airlines and their co-branded card partners are assessing how a decline in credit-card profits could ripple into loyalty revenues. Delta Air Lines, for instance, received $8.2 billion from American Express in 2025 and is targeting $10 billion from its co-branded card programme, figures cited at the conference show. Delta CEO Ed Bastian said earlier this month that it is too early to judge a proposal that may never materialise.
United Airlines officials said the carrier is in regular contact with its largest card partner, JPMorgan, and acknowledged exposure to the cap. United's Chief Commercial Officer Andrew Nocella said the airline would be affected by an interest-rate cap but believes it would be less exposed than many rivals because its cardholders generally carry higher credit scores and have lower default rates.
Leasing firm Avolon, in an outlook released ahead of the aircraft-finance gathering, noted that U.S. carriers have increasingly positioned themselves as "lifestyle brands," relying on loyalty and credit-card revenue to offset loss-making elements of their core operations.
Anne Correa, senior vice president of modelling at airline and lessor adviser MBA Aviation, told conference attendees that her firm had spoken with banks about the potential effects of the proposal and that, if implemented, it would change consumer behaviour and alter the economics of loyalty programmes.
Some speakers argued the cap would have limited effect on the wealthiest customers, who account for a large share of loyalty-generated revenue. "Only people with means will be eligible for cards at a 10% rate," Michael Miller, a managing director at Barclays, said at the conference. He called it "an unlikely outcome that it (the proposal) sticks."
As the industry weighs potential changes, airlines, banks and advisers are monitoring how a proposed reduction in card issuer margins could influence the price of miles, card availability to consumers, and the broader funding model that has become central to carriers' non-ticket income streams.
Key takeaways
- Airlines derive significant cash from selling miles to banks that issue co-branded credit cards.
- A proposed 10% credit-card interest rate cap could erode card issuers' profits and reduce what banks can pay for miles, affecting airline loyalty revenue.
- The cap's implementation is not specified and would likely require congressional action; industry participants say the effect would vary across carriers depending on cardholder credit profiles.
Conference context
Comments and analysis were made at the Airline Economics conference in Dublin, where advisers, airline executives and leasing firms discussed the proposal's potential impact on the aviation business model and the role loyalty and credit-card partnerships play in offsetting parts of the core airline business that lose money.