David Shepards

WASHINGTON (Reuters) - Mayor Airways said on Monday it opposed a new effort to increase legislation to reduce transaction fees charged by visas and Mastercards, saying it could force them to stop offering reward credit cards to allow consumers to frequently provide frequent flyer miles for transactions.

American Airlines, United Airlines, Southwest Airlines and others including Planemaker Boeing, Airbus, RTX and GE Aerospace say legislation initiated by Senators Dick Durbin and Roger Marshall could significantly reduce air travel and harm the overall tourism industry. The Air Union also signed the letter.

Airlines incur billions of dollars in annual fees for branded credit cards. Durbin said the airline is "basically a credit card company that owns some planes."

Airlines believe that reducing sliding fees will make it impossible to offer rewards, pointing to the 2010 law on debit card fees, which they say nearly eliminated rewards debit cards.

Airlines successfully beat the measure in 2023, but this week may be taking into account the cryptocurrency bill under consideration.

Durbin, a Democrat, has previously said that the measure co-sponsored with Republican Marshall can save merchants and consumers $15 billion in credit card transaction fees each year, while businesses pay more than $100 billion in so-called sliding fees each year.

Durbin and Marshall did not immediately respond to requests for comment.

The letter said more than 31 million Americans hold air travel reward cards, as well as 57% of all frequent flight miles, and the points issued in 2023 are generated by airline credit card use. Almost 16 million domestic visitor trips were earned through points earned using airline-branded credit cards in 2023.

Last year, the Biden administration's transportation department opened an inquiry, ordering the United States, Delta Air Lines, Southwest and Manchester United to provide records and submit reports to ensure consumers do not face unfair, deceptive or anti-competitive practices.

American Airlines relies on these programs (with tens of millions of members) to earn revenue and raise funds during the 19th-Day pandemic when travel demand declines.

Delta, United and the United States’ loyalty program is worth more than $20 billion in 2023, according to Point Loyalty’s consulting firm.

(Reported by David Shepards; editor of Nick Zieminski and Lincoln Feast.)