$8.2 Billion at Risk: Why Airline CEOs Fear a Credit Card Interest Rate Cap
Key Points
- 1Delta Air Lines' co-brand revenue from American Express hit $8.2 billion in 2025, a figure directly threatened by a proposed 10% credit card interest rate cap.
- 2Airline CEOs, including Delta's Ed Bastian, warn the cap would 'upend' the credit card industry and restrict credit access, pressuring loyalty program economics.
- 3Wall Street executives are also concerned about the Department of Justice investigation into Federal Reserve Chair Jerome Powell, fearing a loss of confidence that could push interest rates higher.
- 4The proposed cap would cost banks an estimated $100 billion in lost revenue per year, forcing them to reduce rewards or cut credit limits, impacting frequent flyer programs.
A sudden shift in the relationship between Wall Street and the White House is sending shockwaves through the commercial aviation news sector. Financial executives are now openly warning President Donald Trump about two key policy proposals. These proposals are a one-year, 10% cap on credit card interest rates and a Department of Justice investigation into Federal Reserve Chair Jerome Powell. Both actions threaten the lucrative financial models that support major airlines.
The Airline Co-Brand Credit Card Threat
The most immediate concern for the aviation industry is the proposed credit card interest rate cap. This cap would limit interest rates to 10% for one year. Currently, the average interest rate on credit cards ranges from 19.65% to 21.5%, according to industry sources. Researchers at Vanderbilt University estimate a 10% cap would cost banks roughly $100 billion in lost revenue per year.
Airlines rely heavily on revenue from airline co-brand credit card partnerships. Banks purchase loyalty points in bulk from airlines. This provides a stable, high-margin income stream. For some carriers, this revenue often exceeds profits from ticket sales.
Delta Air Lines and American Express Partnership
The financial relationship between Delta Air Lines and American Express is a prime example. Delta's CEO, Ed Bastian, spoke out against the proposed cap. He told analysts the move would "upend the whole credit card industry". Bastian warned the cap would restrict credit access for lower-end consumers. These consumers are a vital part of the credit card ecosystem.
- Revenue at Risk: In 2025, Delta's remuneration from its Delta Air Lines American Express partnership grew 11% to $8.2 billion.
- Future Forecast: Executives forecast this partnership could grow to $10 billion in the long term.
This massive revenue stream is directly tied to the health of the card issuer. If American Express's profitability is severely constrained, its ability to purchase miles at current prices is threatened. This would pressure Delta's high-margin loyalty program economics.
Impact on Other Major Carriers
Other major carriers face similar risks. JPMorgan Chase is one of the nation’s largest credit card companies. It holds major co-brand partnerships with companies like United Airlines. JPMorgan Chase Chief Financial Officer Jeffrey Barnum warned the cap would reduce the supply of credit. He stated this would have the "exact opposite consequence" of helping consumers.
President Trump also endorsed the Credit Card Competition Act. This bill aims to cut into the revenue banks earn from merchants, known as "swipe fees". United Airlines CEO Scott Kirby has previously condemned similar legislation. He warned it would destroy loyalty programs for consumers.
Federal Reserve Independence and Market Confidence
Beyond the credit card issue, Wall Street banking executives are alarmed by the investigation into Federal Reserve Chair Jerome Powell. BNY Chief Executive Officer Robin Vince warned against attacking the Federal Reserve independence. He stated this could shake the foundation of the bond market. A lack of confidence in the Fed could potentially push interest rates higher.
JPMorgan Chase CEO Jamie Dimon also voiced his respect for Powell. The Federal Reserve’s independence is considered sacrosanct among big banks. Any perceived political interference creates market uncertainty.
For the aviation industry, this financial instability is a risk. Higher interest rates increase the cost of borrowing for aircraft purchases and financing. This adds pressure to an already capital-intensive sector. The stock market reacted to the news, with shares of American Express and JPMorgan falling sharply.
This confluence of financial and regulatory attacks marks a souring of the relationship between the administration and Wall Street. The outcome will have a direct and significant impact on airline ancillary revenue and the broader economy, as reported in this commercial aviation news update on https://flying.flights.
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Written by
Ujjwal SukhwaniAviation News Editor & Industry Analyst delivering clear coverage for a worldwide audience.
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