Before the pandemic the American Airlines co-brand portfolio had the largest charge volume, but American, United and Delta were all over $100 billion annually.
In June Delta Air Lines made big news claiming to have broken away from the pack reporting that “approaching 1% of U.S. GDP” in charge volume on their co-brand cards. They appeared to suggest over a quarter trillion dollars being spend on Delta American Express cards.
I tried to wrap my head around this number, because it suggested so much growth.
- Inflation helps
- But you expect the portfolio to grow beyond that order of magnitude with the economy
- A little more if they’re successful adding more cardmembers than they’re losing (every portfolio loses a substantial number each year as annual fees come due)
If Delta was exaggerating a bit, and hitting $200 billion in charges it was still a lot even if a third of their growth was driven by inflation.
And we had to believe them, right? This was being reported to investors and lawyers vet their presentations. They aren’t going to intentionally do securities fraud.
At the same time, Delta was reporting that they were lagging behind the goals they set when they re-upped their deal with American Express in 2019 and that was without the expectation of a surge in inflation at the time. Their new deal was supposed to hit $7 billion revenue in 2023 unaided by inflation and they’re going to be slightly short of that.
Ancillary revenue guru Jay Sorenson highlights the math calling into question the lengths Delta appears to be stretching to make their claim about the size of their co-brand. American Express reports numbers, too!
US GDP in June 2023 (at the time of the Delta disclosure) was about $27 trillion on an annual basis (US Bureau of Economic Analysis). 1% of that is $277 billion.
The 2022 AMEX Annual Report discloses this: ” . . . The Delta cobrand portfolio represented approximately 10 percent of worldwide network volumes . . . ” AMEX network volume was $1.55 trillion, with 10% of that being $155 billion (the Delta share).
We have a Delta disclosure indicating $277 billion annual co-brand spend, and an AMEX disclosure indicating $155 billion. One way to get there is to round up $155 billion to $200 billion . . . and that would be “approaching” $277 billion? Another explanation would be a 70% leap from 2022 to current-year portfolio spending. Please, someone help with the math here. I’m inclined to rely on the AMEX numbers.
Take American Express numbers from mid-2023 and you get an assumption that’s 10% larger for American Express spend. Then assume American Express might be rounding down by a percent, and you might get to $180 million in Delta American Express spend?
That’s still more than 50% growth compared to pre-pandemic, but it’s nowhere near one percent of GDP! Indeed, without pinpointing an exact start Delta reported 60% growth in spend, and knowing a rough order of magnitude starting volume that alone tells us they aren’t within $50 billion or probably even $75 billion of 1% of GDP.
Instead the best we’re left with is that perhaps Delta’s co-brand portfolio is doing two-thirds of one percent of GDP, somewhat closer to its peers at United and American, rather than substantially outperforming them. And 0.67% kind of rounds to 1%, or in Delta’s verbiage “approaches” it.
The world’s #1 PREMIER airline NEVER exaggerates about anything. More lies trying to knock them off the top, where they’ve been since their founding nearly a century ago!
the only number that really matters is what ends up on the income statement.
Comparing those numbers, Delta most definitely outperforms its peers.
and that outperformance is part of the reason for Delta’s revenue and profit premium to its competitors.
I am curious if they are counting a certain percentage of non-branded Platinum card spend (to inflate their numbers) since there is some upside from miles/point sales with that product.
Translation from Tim Dunce, “well it’s ok, cause what Delta said was 2/3 true so we can round up.”
Premium spin.
@ Gary — Meanwhile, over on planet Dunn, the ONLY thing that matters is profit. That will get you a miserable life and a beautiful mausoleum.
Delta offers premium credit cards to its premium, discerning, and elite customers.
@ Gary — I am shocked that Delta would lie. Please tell me it isn’t so.
Because they made it so hard to get status, I now returned one credit card and booked my next trip to Europe on Lufthansa. Just wasn’t worth paying the premium to be loyal to Delta anymore. I’m just one person, maybe others find the Delta AMEX changes compelling …..
I could care less what Delta claims but it is undoubtedly statistically defensible unless Gary and anyone else would like to file a complaint w/ the SEC.
as usual, the trolls that can’t admit basic facts come out by the dozens because they can’t admit that Delta manages to get more revenue and more profits out of its loyalty and credit card agreements than any other airline on the planet – even though DL invented neither concept.
And given that AA, DL and UA generate very similar amounts of passenger revenue, the benefit of DL’s loyalty programs is larger.
The real discussion is why Delta can do what AA and UA cannot do.
As usual, there will be trolls whose head this discussion will go way over. Unfortunately, the internet is open and they are free to anonymously make fools of themselves – even if only to themselves – as much as they want
@ Tim — Yes, it is unfortunate that the internet is wide open to those who call others childish names. One can disagree with this blog’s author and/or fellow commenters without being disrespectful.
Only a premium airline could provide such premium exaggeration!
Is DL counting revenue from Amex that isn’t part of charge volume though? Like per use fees they get from Amex for SkyClub access, and revenue from Membership Rewards transfers to Delta.
Chris Raehl, lol.
Tim could care less what Delta claims? Ha! He hangs on every word. Facts suit him until they don’t suit him.
Gene,
I don’t want to hear a word out of your hypocritical mouth about being nice to anyone when you – in this very article – denigrated me and you also made patently false but easily verifiable statements about the content of Gary’s articles.
If you want to be treated decently, then restrain yourself and if you want to see a civil discourse, then tell others that mock me and make worthless posts to restrain themselves.
Those who are here only to mock others are the lowest form of mental midgets and are incapable of discussing any topic.
DWT,
Delta’s claim is the percentage of the US GDP that goes through its co-brand Amex cards. The $500 million or see that Amex pays DL for non-DL Amex cardholder use of SkyClubs does not pass through DL’s card portfolio.
Once again, the question is how Delta can end up w/ more money on the income statement and bottom line from its loyalty program and credit card partnership – not just more than AA and UA when all 3 have similar passenger revenues.
The reality is that the trolls are the same people that think that their favorite airline – mostly AA and UA – really do run inferior businesses to DL which is perfectly obvious to anyone that actually reads financial statements.
It is no surprise that some people don’t want to talk about bottom line profits but want to talk about subjective issues about which they themselves appoint themselves as judge even though revenue IS a financial metric.
Chris is probably right – imagine a percent of vanilla Platinum (SkyClub access) and Centurion (Platinum Status) spend is included in the figure.
@Chris R, lol!
matt,
thank you for proving my point.
zero value from the original comment and you salute it.
there are about 3 people that posted on this article whose comments are relevant to the discussion.
THAT is a pathetic indictment of the quality of Gary’s readers – or at least the ones that post.
Chris,
Delta’s claim is related to all spend on their Amex portfolio. It has nothing to do with the most premium cards.
Tim
It’s always amusing how much you berate other users that point out actually facts or the ridiculousness of delta’s marketing but seem incapable of processing delta dogma vs reality
But… as much as you constantly berate Gary and other readers. You act like you’re the holder of all facts but anyone with an actual or recent history in the industry is well aware how much you abuse data and facts to your own self interest, seemingly oblivious to reality.
You come back day after day after day.
Hour after hour to read what those you berate have to say
What does that say about you?
Perhaps focus on reality
There’s nothing tough or difficult about understanding 1% of gdp
The accounting practices and how they’re used as currency by airlines… sure. That can be difficult but that’s not the topic here and frankly, you’ve proven over and over that you don’t understand any accounting anyway
Maybe just go read somewhere else if all you know how to do is glorify delta and berate other users when they call out silly marketing by delta
Delta does so much well. They don’t need you making up for their failures on every blog
I love when I see a post from Tim Dunn – I always grab the popcorn, there’s more spin from him than out of Washington these days
and yet you show up as if you have some right to be the arbiter of how much anyone spends on the internet or who is right.
The facts are right in the financial statements which you have NEVER CITED.
I bring facts into the discussion.
If there is any exaggeration, then file a complaint with the SEC.
Your words, like Gary’s on this issue as well as who he cites, are hot air.
None of which changes that Delta’s financial contribution from its loyalty program and credit card program are the highest in the industry.
But you don’t want to deal w/ that now, Max, do you? Of course not. (other than you being incapable of discussing the facts)
🙂 always easy to tell when you know you’ve lost an argument. You resort to nonsense and accusing me of not knowing how to deal with things that I’ve never even said. Delta has a great deal with their credit card…
Frankly, if you believe what Delta says about their credit card revenue, you’d realize Delta hasn’t made money flying planes in a VERY long time.
And per financial statements.. Yes. I have but you conveniently have a short memory when it comes to your hot-tempered replies. I constantly cite Delta’s own investor presentations filed with the SEC to remind you where Delta’s profits come from, per Delta, but you don’t enjoy facts when even Delta says their outsized profits are due to monopoly pricing at their interior hubs 😉
But please… monitor for my reply here when you don’t respect anyone, including Gary to have knowledge on any topic that disagrees with you.
I’m certainly no internet arbiter and would never claim to be, but I also am not the one on every aviation blog that people mock for having no objectivity. That’s you, Tim (unless it’s one of your fake guest users… was it “Roberta” last time? lol). However, when you come on to nearly every blog and try to manipulate data and claim fake facts to back your claims, I will call you out on it. Plenty of others do too.
The aviation industry is multi-faceted and profitability is determined by many many factors, among them: monopoly hubs, union busting tactics, historic slot holdings and the relative amount of those slots over other airlines, aircraft LOPA, credit card deals, etc. Among many… but, Delta is the one that says their out-sized profitability is due to their monopoly hubs, it isn’t me. But again, I completely agree they have a great credit card deal, which is why it’s so amusing when they do a normal delta nonsense about 1% of GDP or “major expansion in Miami” when it’s only more up gauged hub flying (accompanied by a drop in a route from MIA) or the many many other things Delta says that just seem a bit over the top.
Hope you have a good Thursday. You seem a bit bored. You’ve been replying to everyone for hours now…
@Tim Dunn – No one disputes that Delta has a profitable co-brand relationship with American Express.
And I wrote in my original post that I am confident Delta got lawyers to sign off on the marketing claim about ‘approaching’ 1% of GDP. I do not believe they are committing securities fraud.
But the claim is clearly something of an exaggeration nonetheless based on,
– what they have said about the growth of spend on their cobrand (60%)
– what Amex says about the % of total spend on their network the Delta card represents (10%)
– Any reasonable assumption of what’s possible
Being generous to Delta they’re at 2/3rds of 1% of GDP and “rounding up” so they may be ‘approaching’ it but they are still far off.
Typical vapor ware from DELTA
Max,
the aviation internet community is FULL of people that are loyal to AA and UA and I have no problem telling the truth regardless of where it cuts.
the troll activity comes almost entirely from AA and UA fanchildren.
You and they don’t ever deal w/ the facts and when there are people like Mark in the DCA discussion yesterday and today, HE, not me, cherrypicks facts and data, believes UA’s PR like it is the gospel, and finds fault with anything that isn’t “their brand”
If you or any of those that want to argue WITH ME would simply discuss the topic, I would give you all the bandwidth you want
But you are incapable of arguing the facts and data – even when you accuse me of not using facts.
You don’t WANT facts because they are on my side, not yours.
Grow up and stick to what you know and leave others to talk as much as they want about what they know.
Gary,
well, yes, a whole lot of people do have a hard time admitting that Delta does the best of anything.
And I know full well that you posed a question about exaggeration and then cited someone that went through all kinds of back of the envelope calculations.
Delta NEVER said its cards carry 1% of GDP. they said “almost”
Feel free to ask the SEC or any lawyer what is legally permissible under almost.
But you and everyone else still can’t manage to answer how AA, DL and UA all manage to generate about the same amounts of passenger revenue but DL manages to get so much more from its loyalty program and card partnership.
Why is that, Gary?
And what, honestly does it matter if it is 2/3 of 1% – as you suggest but say that is the same as AA and UA- or .99%? AA and UA don’t translate their card spend into more revenue and profits.
Just once, Gary, post a side by side comparison of the actual data in each of the big 3’s 10Ks from the credit card and loyalty program revenue and discuss that instead of engage in endless speculation doubting company statements.
and Max NEVER manages to show up when I commend you for your take on an article – which happens PLENTY OF TIMES.
and did just today
Awww, Yes… Yesterday, Tim… where you said united can’t compete in any hub they have unless they resort to corruption. Or how Scott Kirby is basically an idiot because he’s taken United from the least profitable major to closing in quickly on the most profitable major. The guy is a blowhard, sure, but he’s a very smart one. Or the nonsense about UA/CO Colocation in ATL due to DL GSE Facility when their colocation in T happened years before the T gate expansion. Or how you don’t know much about AA’s colocation in ATL’s Concourse T but assume Delta gifted it to AA out of the goodness of their hearts… 🙂 You do amuse
Perhaps just back off some of the ridiculous exaggeration and needless dogma and people might respect you more. You clearly know where to find data and what it is, but you constantly misuse it and purposefully manipulate it to create a storyline you want rather than one that is honest.
“the troll activity comes almost entirely from AA and UA fanchildren.”
Coming from you, it’s just funny that you believe this when facts don’t disturb your delta fanboyism 😉
Imagine spending on a Delta Amex card just to redeem a 350k economy award flight from Atlanta to Tulsa. They call them SkyPesos for a reason.
In a world with so many card option you are swiping a Delta Amex you should lose your right to vote and receive mental health treatment.
so now you are on here every 5 minutes even as you lecture me on how much time I spend on the internet?
And YOUR reading comprehension is ZERO if you took what I wrote to either mean or even literally say that UA can’t compete unless it is involved in corruption.
but feel free to provide the exact quote where I said it – or accept the consequences of your own mouthing off and being shown to be the one that is wrong.
We don’t even need to go further than that statement. You invent your own reality, make up your own data, and then argue that someone else is wrong when THEY use facts that you don’t even know.
All of this is now meaningless as my United Infinite Card just arrived. Spending on my Reserve is down to non-existent and the card shall be cancelled come October. Thanks, Delta for the changes to what was once my favorite card and airline.
But, at least I know I helped knock them out of the 1% of GDP.
@ Tim — I don’t call people stupid or curse at them. Disagreeing is not denigrating.
Mark me down for Team @MaxPower, it’s refreshing to hear his/her viewpoint. Tired of @TimDunn propaganda, still don’t understand the ax that he’s grinding.
@Tim Dunn
“Delta NEVER said its cards carry 1% of GDP. they said “almost”
Feel free to ask the SEC or any lawyer what is legally permissible under almost.”
I said I didn’t think this was securities fraud so you’re arguing a straw man.
Delta certainly implied higher charge volume and an overclaim with the statement they made, I don’t think most would think that 1/3 off (~ $90B) is almost.
“But you and everyone else still can’t manage to answer how AA, DL and UA all manage to generate about the same amounts of passenger revenue but DL manages to get so much more from its loyalty program and card partnership.”
They don’t “get so much more from” loyalty than American, though. UA, sure. AA and DL always have outperformed UA on co-brand. AA outperformed Delta on co-brand before the pandemic. Maybe that’s flipped, but not by a lot – at least not by any standard of what a lot is that is consistent with how Delta uses language.
@ Tim — Indeed, the aviation industry is multi-faceted and profitability is determined by many many factors, including subjective things like having a better product such as Polaris seats and lounges.
@Gary – you truly need to get another job if you think these ridiculous ploys to get readers onto your bog is an example of journalism. Try reading any one of your competitors’ pieces to gain a clear understanding of what a true journalist’s role is.
Sad that you use your blog as a forum to chastise airlines as a means of luring followers vs educating them.
Have you thought about janitorial work instead? Especially considering how proficient you are with managing crap.
Gary
you yourself put “approaching 1%” in your article above – which means what statistically? You want to take an undefined use of language and turn it into some sort of statistic which you yourself define – so you can argue that Delta is exaggerating.
The hypocrisy and logical disconnect could not be more obvious – except, I am sure, to you.
Publicly traded companies don’t “imply” anything. They disclose facts; you are the one that interpreted those facts the way you want.
And you still can’t answer the question as to why AAL gets far less loyalty program revenue contribution to its P&L than DAL if you think they get the same percentage of co-brand spend on their card portfolios.
and you are right that Untied is at the bottom of the list for credit card contributions and it is because of their massive international route system absent a leading domestic route system.
UAL is 4 out of the big 4 in the domestic market, Scott Kirby knows that the way to get a viable credit card and larger loyalty program is to have a strong domestic route system.
The problem is that he naively thinks that he is going to displace AA, DL and WN in scores of markets in order to generate the revenue necessary to support a better card program. The reason why the trolls are out in full force is because I have spent the day pointing out the strategic and logical fallacies of UAL’s strategies – and the UAL fan kiddies can’t stand to hear it.
And Paul is right. Until you start blocking IP addresses, nothing that is remotely worth discussing will survive on this site because the trolls are more interested in trashing anyone that speaks the truth they don’t want to hear.
Gene,
if you think you are the paradigm of civility online that you act like you advocate for, you are woefully self-deceived.
Max is the poster child for airline fanboyism detached from any facts or data. Anyone that says that Delta didn’t make money on its airline operation alone is beyond clueless and does not know the data that he claims he knows.
ALL of the big 3 have been carried by loyalty programs through the pandemic but Delta was by far the most profitable of the big 3 based on its airline operations alone pre-covid.
And the whole reason why Delta instituted the pay increases it did – which AA and UA have yet to do – is because DL can afford it and return to profitability just for the airline while AA and UA cannot.
“I would give you all the bandwidth you want”
It’s not your bandwidth to give, Tim. It’s Gary’s.
Cue Tim telling me to stay out of it because I don’t add anything to the conversation. Tim, the arbiter of the aviation blog-dom.
Oct,
to no surprise, my comment went over your head.
I don’t assume that it is my job to regulate the content on any blog. And that is particularly noteworthy considering that there are some people that think it is THEIR job to tell me and others how much others should post.
I also don’t debate people who share their own personal decisions about DL’s products. That is their choice and I respect them.
I do debate people that incorrectly argue facts – which was 90% of the commentary on the DCA slot discussion.
But I do commend you for using the same username – which is more than we see from some people.
Gary would do well to start blocking IPs of people that here for nothing more than to mock others.
If you fall in that category, let the chips fall where they may.
Oct, to no surprise, my comment went over your head. I don’t assume that it is my job to regulate the content on any blog. And that is particularly noteworthy considering that there are some people that think it is THEIR job to tell me and others how much others should post. I also don’t debate people who share their own personal decisions about DL’s products. That is their choice and I respect them. I do debate people that incorrectly argue facts – which was 90% of the commentary on the DCA slot discussion. But I do commend you for using the same username – which is more than we see from some people. Gary would do well to start blocking IPs of people that here for nothing more than to mock others. If you fall in that category, let the chips fall where they may.
Tim Dunn is going to Tim Dunn.
Tim Dunn needs to SHUT UP and take the L on this one. He went around for 2 years blabbing about how Delta CC spend is more than a quarter of a trillion dollars and more BS. He has no inside information and just takes ever filing a face value and adds his own spin.
I bet money that AA actually has higher spend than DL. They have more cards/options, more partners, and have been counting CC spend towards loyalty for longer.
Tim Dunn is a false prophet.
What a surprise
Tim would prefer Gary Blocking the IP of those that prove his ignorance vs defending his lack of data because he doesn’t know how to defend the ridiculous things he says
And he pleads for Gary to not make him show any data whatsoever but rather delete others
Tim
You’re tired
Go to bed
You spent too long drinking at zocalo… you’ve been dimed out by your delta friends long ago
They seem to care about the delta brand unlike you
Tim
When it’s you vs the world
The world probably is smarter than you. This isn’t a tough one for anyone but you
Delta does so many things better than aa or ua
Stick to the good stuff, not the dogma
@ Tim — I’m not sure why you don’t see that your IP address is the one that should be blocked by Gary. IIRC, you recently told him to FO. It doesn’t get much worse than that.
no, Gene, I didn’t tell Gary to FO. It is precisely because you and MAX have such pitiful reading comprehension that you and he can’t even accurately quote what I said.
I challenged Gary to explain why AA can’t turn its supposedly similar loyalty and credit card partnership to DL into the same number on the income statement – and Gary has come up blank on explaining that.
I am not opposed to challenging ANYONE on the facts and logic.
Gary uses facts and logic – he just makes big jumps in logic and leaves lots of things unexplained.
I know Gary personally. We’ll be just fine.
and when there are certain user names that do not EVER contribute anything to the conversation other than to trash someone else, those IP addresses should be blocked.
And MAX IS capable of contributing to the conversation because he has done it before. But he has a deep-seated need to defend his mother, I mean airline employer, and lash out FIRST at anyone that dares utter a truthful word against it – which is true for alot of people.
Ben G,
just provide the data. I’ll take the bet.
If AA was beating anyone in anything they would be touting it. Same for UA.
DL touts what it does because it is at the top of the industry which in this case is credit card and loyalty program contributions to the income statement and thus profits.
You and a dozen other people under 16 different usernames can’t stand to admit that Delta is at the top of the industry – makes more than any other airline, is worth more as a company, and pays its employees more – because of its leadership which is not just financial but operational
@ Tim — You are not smarter than everyone else here and should really stop with the reading comprehension insults.
I didn’t say I was smarter, Gene.
I said I look at ALL of the facts instead of cherrypicking then as you and others do.
when you drone on endlessly about UA Polaris while trashing DL’s 767-300ERs while also failing to note that UA’s 757s have neither Polaris or premium economy (DL’s 763s are getting the latter or being retired while UA’s 757s aren’t getting any product improvements) and you also fail to note that the 767 economy seat is wider and more spacious than the 777 and 787 seat on AA and UA, then you aren’t handling facts accurately
I am happy to let you tell us your personal preferences but you have a bad habit of trying to convince everyone that your preferences dictate industry strategies and outcomes and you frequently misrepresent your “facts” to mean what you what them to mean.
and the question on the table which no one has answered is how DL manages to put more money on its income statement and bottom line if AA and UA have comparable FF and CC programs
@ Tim — As noted in the Gary’s article, they apparently do it by lying.
So Delta’s financials are fraudulent? Run with that type of nonsense when you can’t actually present facts in a discussion
@ Tim — Where did I state that their financials were fraudulent?
Then define lying
@ Tim — Do you have a mirror handy?