Airlines and Credit Card Fees: Navigating the Legislative Storm for Maximum Profit

The U.S. airline industry's financial health is on the brink of upheaval as Congress debates the Credit Card Competition Act (CCCA), a legislative "poison pill" now tied to the cryptocurrency-focused GENIUS Act. For investors, this clash represents both a warning and an opportunity—a chance to position portfolios ahead of a seismic shift in payment networks and travel incentives. Let's dissect the risks, rewards, and strategic moves investors must make now.

The CCCA's Threat to Airline Revenue Streams

Airlines like American (AAL), United (UAL), and Southwest (LUV) rely heavily on credit card rewards programs, which generated 16 million domestic air trips via points redemption in 2023. These programs account for $227 billion in annual economic activity and support over 156,000 jobs nationwide. The CCCA aims to dismantle this model by capping fees Visa (V) and Mastercard (MA) charge merchants, including airlines, for transaction processing. If passed, 57% of frequent flyer miles earned through credit cards could vanish, stripping airlines of a critical revenue source.

Both payment giants have underperformed the market in 2025 amid regulatory fears, but their fate hinges on legislative outcomes.

The "Poison Pill" Play: Why This Bill Could Derail Crypto Regulation

The CCCA's fate is now tied to the GENIUS Act, bipartisan legislation regulating stablecoins. Senate Republicans like Roger Marshall (R-Kan.) have attached the CCCA as an amendment to force a vote—but this risks killing the stablecoin bill entirely. Key GOP senators like Thom Tillis (R-N.C.) have threatened to withdraw support if the CCCA stays, creating a legislative standoff. Investors should note: if the GENIUS Act fails, so does the CCCA—but if it passes with the amendment, Visa and Mastercard face existential headwinds.

Winners and Losers: Who Benefits from the Chaos?

While Visa and Mastercard face direct regulatory pressure, other financial players stand to gain:
- American Express (AXP): As a card issuer and processor, AXP could dominate niche markets if Visa/Mastercard lose interchange fee advantages.
- Capital One (COF): The bank's focus on rewards-driven credit cards positions it to capitalize on routing flexibility mandated by the CCCA.
- Airlines: Airlines may pivot to alternative revenue streams, such as dynamic pricing or partnerships with banks like Amex, but near-term volatility is inevitable.

Both have outperformed Visa and Mastercard this year, reflecting investor bets on regulatory winds shifting in their favor.

The Bottom Line: Act Now Before the Storm Breaks

Investors should treat this as a high-stakes game of legislative chess:
1. Short Visa and Mastercard: Their stock valuations are already pricing in some regulatory risk, but full passage of the CCCA could trigger further declines.
2. Buy AXP and COF: These stocks are primed to gain if routing rules shift, and they offer defensive exposure to consumer credit demand.
3. Diversify airline holdings: Airlines like Delta (DAL) and JetBlue (JBLU) may face margin pressure but could rebound if the CCCA fails—a scenario still plausible given the GENIUS Act's precarious path.

The clock is ticking: A final vote on the GENIUS Act's amendments is expected by mid-June. Investors who act swiftly to hedge against payment network volatility—and capitalize on emerging winners—will position themselves to profit from this regulatory reckoning.

Final thought: In legislative battles, the best offense is a well-researched portfolio. Move now.