Your Hawaii Flight Exists To Sell You A Credit Card

Every time you pay a bag fee on a Hawaii flight, you are feeding a business model that has almost nothing to do with flying. Every major U.S. airline would have lost money in 2024 if you stripped out credit card and loyalty revenue. The flight is not the product. The loyalty-branded credit card is.

According to a 2025 analysis of airline financial filings by Visual Approach Analytics, Delta reported billions in operating profit but would have been negative based on passenger revenue by itself. American also dropped into negative margins when you isolate their flying. Southwest goes deeper into the red, too. Hawaiian/Alaska’s own numbers make the same case. It reported roughly $100 million in net profit while its loyalty program generated about $855 million in revenue. Remove the card business, and there is simply no profit left to speak of.

Airlines stopped making money on flights a long time ago.

Flying is the visible part of the business, but it is not the stable part, nor is it what the industry is about any longer. Aircraft, fuel, labor, and demand swings make flying volatile and expensive. Loyalty revenue is virtually the opposite. It is predictable, high margin, and tied to financial products rather than seat inventory. Why else do you think airlines, their processing banks, and related affiliate travel websites push this so hard?

Banks buy miles from airlines in bulk, paying billions each year for the right to issue cards that earn those miles. The airline books that as revenue, and the bank uses those miles to attract cardholders who pay annual fees and interest, generating revenue every time they swipe. That money shows up whether you fly or not, every month, not just when you take a trip, but even just at the grocery store. It is more stable than ticket sales and far more profitable.

What the credit card actually pays for.

The industry tries to sell consumers on cards as a bundle of “valuable” perks: free checked bags, earlier boarding, bonus miles, and more. That framing only works if you ignore what was once included.

You used to check a bag without thinking about it, board without paying for a position, and earn miles on most fares. Now those things sit behind a paywall, and the key to that is the airline-branded card. Basic economy strips out earnings. Boarding groups get sold back. Bags are unbundled and priced separately, including when you buy them. And now, even business/first class is being unbundled in exactly the same way!

Cardholders earn more miles per dollar and may earn them on fares that non-cardholders earn little to nothing on. That shifts the value of the loyalty program directly to people inside the airline’s card ecosystem. If you are not in it, you are becoming a second-class flyer, earning slower if at all, paying more fees, and getting fewer benefits. At this point, the card is being turned from a perk to the price of getting back what used to be included.

Hawaii travelers get hit harder than almost anyone.

Hawaii trips are longer and heavier. People pack for a week or two, not a weekend. They bring beach and hiking gear, and everything else that comes with a longer stay. Family travel multiplies that, and interisland flights mean those same bags move yet again.

That makes bringing checked bags nearly unavoidable for many Hawaii-bound travelers, and the airline does not need to convince you to do so. You already are. The only question is whether you’re paying for it.

Around $45 to $55 each way per bag is the ticket across major carriers. That adds up quickly on a round trip, especially for couples and families. The alternative the airline offers is a $95-$395 annual fee card that makes the bag fee disappear. It feels like a choice. For most Hawaii travelers, it really isn’t.

Some Hawaii travelers dodge this with just a carry-on. But most cannot, and that makes them a perfect target for the card pitch.

What frequent Hawaii flyers should actually do.

For people who fly Hawaii routes multiple times a year on one carrier, the airline game can work. Two or more round trips with checked bags can easily offset a $95 annual fee quickly, especially if a companion is on the same reservation. At that point, the card has no theoretical value. It is a direct reduction in out-of-pocket costs. Not only that, but an annual companion pass perk, when available, can save nearly $100 on average, too.

But the $95 card plan only holds if you keep flying that carrier. You are locking yourself into one airline’s ecosystem. But sometimes that seems to fail. For example, the Hawaiian card from Barclays still exists, while the Bank of America card from Alaska is being promoted. It’s confusing at best, and it leaves consumers vulnerable.

What occasional Hawaii travelers should consider instead.

The occasional visitor often gets the worst deal. A single round-trip bag fee might run around $100. A card can waive that, but it also introduces an annual fee after the first year and assumes you will extract value later. The welcome bonus points can offset some of the upfront cost, too, but redemption values are so much worse than they were a few years ago. Combine that with the fact that airlines reduced or eliminated earnings on their cheapest fares and increased the mileage required for many awards, which cuts potential return.

You also end up opening a long-term financial relationship to solve a one-trip cost problem. If you do not keep flying that airline, the value fades quickly, and the card becomes something you either keep paying for indefinitely or have to manage and eventually close. And that too comes with consequences for credit scores, for example.

For many occasional Hawaii travelers, the cleaner can be to pay the bag fee, book the best flight regardless of airline, and avoid adding another layer of complexity that may or may not pay off in the long run.

What if you have no choice of airline?

Hawaii is not Chicago or Dallas. There is no terminal full of competing carriers where you shop for the best deal on a given day. Interisland, you have two options. From the mainland to Hawaii, the choices are better but still limited, depending on your island, departure city, and seasonal dates.

There is another path, and some longtime Hawaii travelers are already taking it. General travel cards earn points that are not hostage to any single airline’s program decisions. Those points can move to airline partners, cover travel broadly, or simply hold value while you wait to see where the Hawaii airline dust settles.

BOH has no affiliate relationship with any credit card issuer. Just to say that is not the case for most websites that write about airline credit card/loyalty programs.

Do you have airline co-branded cards for your Hawaii flights, have you moved to a general travel card instead, or do you do something else entirely? What is working best for you?

Photo Credit: © Beat of Hawaii – Waikiki sunset.