ROCKVILLE, Md., Sept. 23, 2019 /PRNewswire/ — Airlines remain a co-branded credit card lynchpin, reports Packaged Facts in the market research study Co-Branded and Affinity Cards in the U.S., 7th Edition. Co-branded credit cards contribute $379 billion to some $990 billion in total 2018 U.S. co-branded card purchase value and placing four airlines among the top 10 U.S. co-branded credit card programs by purchase value.
On the surface, little has changed—each of the four airlines (American, Delta, Southwest, and United) among the Top 10 have remained with their respective card issuers and networks for years. But underneath the surface, things are very different. Airlines have become more aggressive in pursuing partner relationships offering them better economics, which has resulted in a spate of high-profile contract negotiations resulting in additional revenue concessions granted to the airlines by those partners. The contract amendments and renewals show that, in today’s ultra-competitive climate, issuers and networks are willing to make significant concessions to keep their prized airline co-brands happy and onboard.
One key trend favoring airlines in this regard is consolidation, which has placed a greater concentration of power in the hands of fewer major airlines. But airline-branded card users also remain coveted for household incomes and card spending rates that place them comfortably within the affluent space, which is a boon to networks and issuers keen to capture card-based income streams and airlines keen to grow their loyalty. What’s more, they are increasingly valuable as cross-selling targets, a process made easier and more effective thanks to advances in marketing analytics. After all, major card issuers such as JPMorgan Chase, Citibank, and American Express do much more than market cards—a host of other products wait in the wings; and connecting these card users to other marketers bears related fruit. It’s no wonder that fees paid by issuing partners to airlines for marketing services are leading airlines’ loyalty program revenue higher.
About the Report
Co-Branded and Affinity Cards in the U.S., 7th Edition (published 07/2019, 168 pages) is available for $4,750 from Packaged Facts.
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SOURCE Packaged Facts