Scott Kirby reported that they’re already “in the middle of” negotiations for a new credit card deal. Their current deal runs through 2018. Since they signed that 5 year deal, Delta, United, and Southwest have all re-upped theirs.

Every quarter (for instance here and here) Scott Kirby laments that competitors are seeing year-over-year increased revenue from the renewals of credit card deals, while there’s no material year-over-year “lift” from a more recent renewal for American.

Delta did a $2 billion a year deal with American Express. Chase renewed Southwest last year as well as United in an agreement that gives over $400 million a year in increased revenue. Here’s the secret sauce behind putting together co-brand credit card deals.

Kirby expects to see a similarly strong financial deal for American. In my view, with each mile worth less and banks buying each mile for money money, there’s a limit to how much higher these deals will go. Ultimately new technologies will drive down interchange rates, and banks won’t spend as much to incentivize transactions through their networks.

I had expected American’s new 2018 co-brand deal to perhaps be the last monster deal. But with Marriott’s acquisition of Starwood, and Starwood Preferred Guest not being sunset for at least 18 months, there’s a reasonable chance that the next re-up of Marriott’s co-brand deal could become the last monster deal as American Express, which a big installed cardmember base, competes aggressively with Chase to issue cards in the future.

That installed cardmember base is crucial, a bank that has cardmembers already (versus starting from zero) can afford to compete for the business. That’s the number one thing that works in American’s favor. There are two banks with significant American co-brand credit card holders now. Citibank issues American cards, and has partnered with American since the beginning. Barclaycard was the issuer of US Airways co-brand cards, and continues to service those cards. Barclaycard even purchased the “back book” of legacy Bank of America US Airways cards from before the airline’s acquisition by America West.

Kirby came back multiple times, emphasizing that their frequent flyer program was both the ‘biggest’ and ‘the best’ in the world and mentioned both Citibank and Barclays and that you should look to what other airlines have done in the renewal of their deals to predict what will happen to American’s revenue.

I haven’t been willing to make a prediction about which bank would win the American Airlines deal.

• Citi has partnered with American since June 1987 and has proven a willingness to overpay for co-brand credit cards might lead to me bet on Citi.

• But Barclaycard didn’t sell its back book to Citi, instead it acquired more cardmembers from Bank of America, suggesting it believed it was in a position to win the business.

• Citi is of course bigger, and if a deal is concluded in the next year one might expect that to be a Citi renewal rather than a change in issuers.

So who will win out? If they’re already in the middle of negotiations, perhaps we’ll know early next year when the Citi deal still has two years left to run.