[WASHINGTON] Major airlines said on Monday they oppose a new effort to advance legislation that would reduce fees charged by Visa and Mastercard on transactions, saying it could force them to stop offering rewards credit cards that give consumers frequent flyer miles for making transactions.
American Airlines, United Airlines, Southwest Airlines and others including planemakers Boeing, Airbus, RTX and GE Aerospace, said in a letter to senators the legislation sponsored by Senators Dick Durbin and Roger Marshall could sharply reduce air travel and harm overall tourism. Also signing the letter were aviation unions.
Airlines generate billions of dollars annually in fees for branded credit cards. Durbin has called the airlines “basically credit card companies that own some planes.”
The airlines argue the reduction in swipe fees would make it impossible to offer rewards and point to a 2010 law aimed at debit card fees that they say nearly eliminated rewards debit cards.
Airlines successfully defeated efforts in 2023 to pass the measure but it could be attached to a cryptocurrency bill under consideration this week.
Durbin, a Democrat, previously said the measure co-sponsored with Republican Marshall could save merchants and consumers US$15 billion annually in fees for credit card transactions, while businesses pay more than US$100 billion in so-called swipe fees annually.
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Durbin and Marshall did not immediately respond to requests for comment.
The letter said over 31 million Americans hold airline travel reward cards and 57 per cent of all frequent flier miles and points issued in 2023 were generated by airline credit card use. Nearly 16 million domestic air visitor trips were awarded from points earned through use of an airline-branded credit card in 2023.
Last year, the Biden administration Transportation Department opened an inquiry ordering American, Delta Air Lines, Southwest and United to provide records and submit reports to ensure consumers do not face unfair, deceptive, or anticompetitive practices.
US carriers relied on these programmes, which have tens of millions of members, for revenue and to raise funds during the Covid-19 pandemic when travel demand plunged.
Loyalty programmes of Delta, United and American were each valued at more than US$20 billion in 2023, according to consulting firm On Point Loyalty. REUTERS
