More peanuts... Delta's quarterly profits just jumped by 31%. The stock's now up 14% this year thanks to its two profit puppies: business class and credit cards. The strong economy has flyers upgrading to the expensive seats, but we're more interested in Delta's Amex plastic partnership.
Long-term commitment... Delta just signed an 11-year extension to its American Express partnership for co-branded credit cards. That SkyMiles card is big for the airline's wallet:
- Amex pays Delta 1.25-1.50 cents per mile for the points you earn swiping your credit card.
- That's expected to add up to $7B annually with this new contract by 2023 — That's double what Delta made with the Amex deal last year.
- Now analysts estimate that 35% of Delta's profits come courtesy of all those Delta Amex cards.
"Emerging High Value Customers"... That's the Delta marketing team's over-thought term for top Millennial fliers. It wants you hooked on its loyalty program because frequent flyer programs are airlines' most profitable service. The co-branded Amex card is how it gets young travelers committed ASAP.