Originally Posted by
Adam Smith
I know exactly what a basis point is, I do this for a living
Once again, your figure is not credible. Interchange is likely in the low to mid 2% area. At 1 cent per point plus 0.75%, that would have AC taking north of 70% of the revenue.
So where do you get this information, or are you completely making it up?
As for the notion that all of the US airlines' profits (or AC's come from credit cards, this is a complete fallacy, and rather than debunking it yet again, I'll just quote what I wrote a few weeks ago.
The info came from someone who works at Moneris. Not all transactions will be at 75 bases pts, but a lot ere. American Express merchant charge ranges from 1% to 3,75%, depending on volume. Plus, American Express holds billions of dollars in outstanding balances, which is where they make most of their money, with their high interest rates. I have also been talking/following airline CC rev for years now and airline are almost becoming financial companies. Will AC bring back their en Route card one day? Just look at Delta airlines last year. Their profit from their branded Amex card was $7.4 Billion, where their overall company profits were $3.5 Billion. They actual lost around $4 billion in airline operation. Simple flying and CNBC has a very good report on this.
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