Delta Air Lines (NYSE: DAL) shares rose by 9.4% from Tuesday into Wednesday’s opening bell after the airline renewed its partnership with American Express (NYSE: AXP) for its Delta SkyMiles credit card. The partnership will continue until the end of 2029.
Delta’s SkyMile card allowed holders to gain access to various amenities. Since 1996, card holders were eligible to earn nukes and receive other Delta-related benefits such as first checked bag free, Main Cabin 1 priority boarding and Delta Sky Club access.
“Delta and American Express are two great consumer brands that share a passion for service to our customers, employees and communities. Our shared trust helps us work together to find innovative ways to offer greater opportunity to our customers as we grow our long-term partnership,” said Delta Chief Executive Officer Ed Bastian. “Enhancing customer loyalty is at the heart of our business. Our partnership with American Express provides a competitive advantage as we deliver substantial value to our customers and owners.”
Delta expects the partnership renewable to be accretive to its revenue stream. In 2018, Delta reported that the relationship with American Express delivered revenue of USD 3.4 Billion. Now, the airline expects the continued partnership to double revenue to USD 7 Billion by 2023.
Delta reported in 2018 that it added one million new card holders while spending across the card portfolio grew by double digits.
American Express also expects to witness growth through the agreement. American Express affirmed its previous guidance for 2019 and expects revenue growth in the range of 8% to 10%. Additionally, American Express projects earnings of USD 7.85 to USD 8.35 per share.
“This is a true partnership steeped in common values, strong relationships and 23 years of history,” said Stephen J. Squeri, Chairman and Chief Executive Officer of American Express. “We are thrilled to extend our agreement in a way that combines so many of American Express’ unique assets and capabilities with Delta’s large and engaged customer base to drive growth for both companies. We will be working together across our card, merchant and travel businesses to expand the partnership and believe this continues to be a very attractive platform for growth that delivers substantial benefits to our customers, our partners and our shareholders.”