First Free Story (1 of 3)Join Skift Pro
American Express Co. renewed its agreement with Delta Air Lines Inc. to be the carrier’s exclusive credit-card issuer.
The relationship will be extended for six years after the companies decided to renew the deal before the contract expired, Atlanta-based Delta said today on a conference call. The new agreement takes effect next month, according to Delta.
The extension secures New York-based AmEx’s largest airline partnership, which accounted for less than 15 percent of the company’s card loans at the end of last year, according to a regulatory filing. The lender is under pressure to retain agreements with other firms including Costco Wholesale Corp. and JetBlue Airways Corp. as competition among banks and payment networks intensifies and merchants seek better terms.
“There is no doubt that the competitive environment for co-brands has become more intense,” AmEx Chief Executive Officer Kenneth I. Chenault said yesterday at an investor conference in New York. “We are very thoughtful about the types of co-brand relationships that we have and that we’re building and that we are interested in going forward.”
In September, Costco reached a deal with Capital One Financial Corp. and MasterCard Inc. for the warehouse-club chain’s co-branded credit cards in Canada, replacing AmEx at the beginning of 2015. The Issaquah, Washington-based retailer is considering a similar move with its larger U.S. portfolio, two people familiar with the matter said last month.
JetBlue also is considering replacing American Express as its credit-card partner, two people briefed on the matter said in September.
Airline partnerships are prized by credit-card issuers and networks because they often come with annual fees and the promise of awards for free trips can lure customers to use their cards more often.
American Express, the largest credit-card issuer by customer spending, also has partnerships with Starwood Hotels & Resorts Worldwide Inc., Hilton Worldwide Holdings Inc. and Daimler AG’s Mercedes-Benz brand.
To contact the reporter on this story: Steven Crabill in New York at email@example.com. To contact the editors responsible for this story: Peter Eichenbaum at firstname.lastname@example.org.