Sky's the Limit: American Airlines' Credit Card Conquest

American Airlines is on the verge of making a major shift in its credit card partnership, potentially dropping Barclays and opting for Citigroup as its exclusive partner. This move would bring an end to a long-standing partnership that dates back to the airline's 2013 acquisition of US Airways. According to sources familiar with the negotiations, American has been working with banks and card networks for months to consolidate its business with a single issuer and boost revenue from its loyalty program. The airline's decision to re-evaluate its credit card partnerships comes as big brands are driving harder bargains and demanding a bigger slice of revenue from interest and fees. Meanwhile, banks are pushing back or exiting the space entirely due to rising card losses, scrutiny from regulators, and higher capital costs. As a result, airlines are under pressure to negotiate better deals. American's loyalty program is a crucial source of revenue, earning billions of dollars each year from banks in exchange for miles earned by customers. During the pandemic, these partnerships helped airlines stay afloat, as travel demand dried up but consumers continued to spend and earn miles on their cards. In recent years, growth in card spending has far exceeded that of passenger revenue. While American has the largest loyalty program, Delta Airlines has out-earned it in terms of payments from its American Express card partnership. American has acknowledged the importance of its credit card partnerships, stating that it continues to work with its partners to explore opportunities to improve products and services and bring more value to its loyalty program.