The Impact of Credit Card Rate Caps and Earnings Disappointments on Airline Stocks in 2026

The airline industry's financial resilience in 2026 has been tested by a dual challenge: regulatory uncertainty over credit card interest rate caps and earnings disappointments tied to shifting consumer behavior and operational costs. Legacy carriers like Delta Air Lines, United Airlines, and American Airlines, which derive significant revenue from co-branded credit card partnerships, now face a strategic risk assessment that intertwines macroeconomic policy with corporate financial planning.

Credit Card Revenue as a Strategic Asset

Legacy carriers have increasingly relied on co-branded credit card programs to diversify revenue streams. For instance, Delta Air Lines reported $2 billion in remuneration from its American Express credit card partnership in Q3 2025, accounting for 60% of its total revenue. This high-margin income has become a critical buffer against operational volatility, such as the $200 million pre-tax loss incurred during the 43-day U.S. government shutdown in Q4 2025. Similarly, American Airlines noted a 9% year-over-year increase in co-branded credit card spending in Q3 2025, underscoring the sector's dependence on these partnerships.

Financial Implications of the Credit Card Rate Cap

President Trump's proposed 10% cap on credit card interest rates, announced in January 2026, has introduced significant uncertainty. While the policy aims to reduce consumer debt burdens, it threatens to erode the profitability of co-branded credit card programs. According to a report by Reuters, the cap could reduce banks' interest income by 5%-18%, forcing lenders to scale back credit availability or eliminate rewards programs. For airlines, this translates to potential revenue declines from their card partnerships. Delta's CEO, Ed Bastian, acknowledged in Q3 2025 earnings calls that the airline's affluent customer base and premium loyalty programs may offer a competitive edge in mitigating these risks, but the broader industry remains exposed.

The market has already reacted to this uncertainty. Following the proposal, shares of Delta and United Airlines fell sharply, with analysts attributing the decline to fears of reduced credit card revenue. American Airlines, which derives a smaller but still meaningful portion of its income from co-branded cards, saw its stock tumble after restoring a revised 2025 earnings outlook that fell far below expectations. While the airline did not explicitly link its underperformance to the rate cap, the timing of the market reaction highlights the embedded vulnerability in its financial model.

Earnings Disappointments and Strategic Risks

The 2026 earnings landscape for legacy carriers has been marked by mixed results. Delta Air Lines, for example, projected a 23% increase in earnings per share to $7.17 for 2026, driven by premium travel demand and disciplined capacity management. However, its Q4 2025 guidance fell short of expectations, with revenue missing forecasts by $110 million. The airline attributed this partly to the government shutdown but also noted broader economic uncertainty, including the potential impact of the credit card rate cap.

American Airlines, meanwhile, has struggled to close the gap with its peers. Its 2025 adjusted EPS guidance was slashed from $1.70–$2.70 to a potential loss of 20 cents per share, reflecting challenges in premium pricing and operational efficiency. While the carrier has pivoted toward premium travel and loyalty program enhancements, its reliance on credit card revenue remains a strategic risk. As stated by Bloomberg, the airline's co-branded card spending growth in Q3 2025 was a bright spot, but its ability to sustain this momentum under regulatory shifts remains untested.

Investor Considerations

For investors, the interplay between regulatory risks and earnings performance demands a nuanced approach. Legacy carriers with diversified revenue streams-such as Delta's focus on premium cabins and cargo services- appear better positioned to weather potential credit card revenue declines. However, airlines with higher exposure to economy fares and lower-margin credit card partnerships, like American Airlines, may face steeper challenges.

The proposed rate cap also underscores the importance of monitoring policy developments. While the cap requires congressional approval and remains legally uncertain, its mere announcement has already influenced investor sentiment. Airlines that proactively adjust their business models-such as by expanding ancillary fees or enhancing loyalty program value- may mitigate the impact of reduced credit card income.

Conclusion

The 2026 airline sector is navigating a complex web of regulatory, economic, and operational challenges. Credit card rate caps, while aimed at consumer protection, pose a strategic risk to legacy carriers' financial stability. As earnings reports and market reactions demonstrate, the sector's reliance on co-branded credit card revenue has created a vulnerability that could amplify earnings volatility. For investors, the key lies in identifying airlines that can adapt to these shifts while maintaining profitability in an increasingly uncertain environment.