Just to be clear, that isn't what the article says. It says more than what "most" airlines generate in ticket sales. Not Delta, or any major US carrier. As interesting as that sounds, it couldn't logically make sense and it only represents about 15% of Delta's revenue. It's not even a straightforward revenue stream, it works for profitability because they are able to book most of the revenue immediately and able to mark down the future expense because of how loyalty rewards are obligated.
It's really just a surprising morph of their economic model in the post regulation era.
Anyway, point is they failed and went under and my recollection is that just selling gasoline alone was not profitable. The extra coin comes from selling snacks, beer, smokes, etc.
You are not forced to play it. That is a just story you tell yourself. You can make a different choice.
You're subsidizing everyone else if you're not trying to get the best loyalty program.
Quite the mentality...
You’re taking a 2%+ loss on every purchase if you’re not playing the game. But you better carry debit cards and cash because some vendors charge extra for credit cards, and some charge extra for using cards at all!
That's a reason to have an airline credit card, it's not a reason to use it (other than for purchasing that airline's tickets)
Generally it's the interchange fees that fund reward programs (charged between banks), not the merchant fee.
https://stripe.com/au/resources/more/interchange-fees-101-wh...
It generally depends on the contract the merchant has with payment provider:
- some have relatively high merchant fees to cover for interchange fees
- others (generally called IC+) have the merchant pay the IC fee plus some other (generally much smaller) fee to the payment provider
In both cases it's the merchant that ends up paying them. It's not a concidence that in Europe (where there are caps to IC fees) the fees that merchants pay are generally lower.
The $8.2billion from American express pays basically is buying tickets and ticket extra, it buys them some points, lets ignore multiples for now, it buys them 8.2billion points, which they give to customers which then buys tickets.
If Spirit accepts USDC instead it wouldn't be that much different.