Is The Delta Amex Portfolio Now The Largest, Most Successful Cobrand In The World?

by Gary Leff

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During Delta’s earnings call on Tuesday the airline shared several fascinating statistics, for instance that corporate travel rose from 20% of 2019 levels in March to being 40% recovered in June, and the airline expects to be back to 60% of 2019 levels by September.

Perhaps even more interesting is the detail they shared on their American Express credit card relationship.

  • They’ve seen a 75% increase in new cardmember acquisitions and are now 90% back to 2019 levels
  • They’re seeing an increase in customers upgrading to higher fee cards (Gold -> Platinum -> Reserve)
  • And spend volume on the cards in June was 115% of 2019 levels, even though travel spend is still down 25% on the cards.

Delta’s revenue from American Express has fully recovered from the pandemic, and unsurprisingly the Delta cards are the number one portfolio for spending that American Express has. (Costco of course was larger before American Express lost them to Citibank, and Delta was number two behind Costco even then.)

It will be interesting to hear any data on co-brand partnerships shared during the upcoming United and American Airlines earnings calls. It’s possible that some of this spending growth is transitory, with consumers in a strong cash position as a result of rising asset values (homes, equities) and government stimulus (direct payments, pandemic unemployment) as well as having had fewer opportunities for discretional spend during the pandemic. It’s possible some of this growth is simply driven by higher prices.

It’s also possible that this is unique to Delta, and that could mean the SkyMiles card portfolio has grown beyond the size of the AAdvantage card portfolio, which until now has been largest.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. @ Gary — The spend ain’t coming from my household. It is down from $45,000 last year to about $300 this year. As far as getting and keeping cards, sure we’ll keep them indefinitely if they keep giving us 50,000 mile retention offers every year. AMEX and company can brag about retention and acquisition all day long, but what is it costing them?

  2. “…a 75% increase in new cardmember acquisitions and are now 90% back to 2019 levels”.

    Could be a 75% increase in churning.

  3. IIRC, based on the presentations from each of the big 3 when they pledged their loyalty programs in order to issue debt, Skymiles earned the most revenue of the 3 in 2019.
    Yes, it is possible that Skymiles is the largest cobrand program.
    Given the debt offerings of the loyalty programs, analysts will see more data than they ever have – which will not only highlight the strengths of the loyalty programs but also of the airlines to which they are attached.
    i\It is certain that other airlines will try to tout what they have accomplished – and they may be doing better – but they can’t file documents with the SEC that do not accurately tell the truth.

  4. Technically they can file documents with the SEC that do not accurately tell the truth, but then the enforcement division has an opportunity to come after them upon discovering or being informed about the inaccuracies.

    Even assuming they accurately tell the truth in SEC filings, they can legally get redactions for confidentiality purposes under circumstances that became more relaxed during the Trump Admin than they were under prior Admins.

  5. I was one of those who upgraded my Delta card from Gold to Platinum. With rollover MQM from 2020, significant bonus MQM on flights, and bonus MQM for spend (12,500 MQM for $25K spend), it was easy to get or improve Medallion status. My situation is that I am doing a lot of one-time spending on the card as I move into a new home. I don’t really want to put my spend earning Delta miles for long. I will likely downgrade later once the MQM bonuses are no longer available.

    Delta is my favorite domestic airline, even if Skymiles are nearly worthless and status benefits aren’t super. I do foresee I will be doing much more air travel in the future as I am now working remotely, and will fly occasionally to visit the office.

  6. As a huge previous Delta fan, I have to say that Delta has worked vehemently to destroy any value from their program, and that has driven me away.

  7. If it walks like a Sky Peso, and talks like a Sky Peso, It’s a Sky Peso. WORTHLESS JUNK!!!!!!!

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