Apparently, Americans haven't heard the crack about SkyMiles being worthless. They're opening Delta Amex credit cards and spending on them more than ever.
Delta executives told investors Thursday that roughly one-third of their active SkyMiles members hold a Delta co-branded card. That's a big and surprising number—a slight uptick from an estimated 30% just a year ago—and a figure we haven't heard other airlines share publicly.
“Co-brand cardholders are among our most valuable customers, traveling more often and spending more on Delta,” President Glen Hauenstein said during the airline's quarterly earnings call.
That underscores the running joke about the airline industry: They're just credit card companies that also own planes. That's not a punchline – it's definitely true of Delta.
Delta has turned its relationship with American Express into the engine of the airline … and the envy of its competitors. The airline earned $2 billion from Amex in the last quarter (from July through September) alone. Without that payout, the airline wouldn't have been profitable.
Compared to the notoriously brutal business of selling tickets on planes filled with expensive fuel operated by highly paid pilots, earning money by selling miles to travelers swiping their credit cards is a goldmine. And Delta has found plenty of ways to get more travelers into that lucrative Amex ecosystem.
Delta was the first of the nation's four largest airlines to introduce free Wi-Fi onboard starting back in 2023 – but by requiring a SkyMiles account to get online, they introduced an easy way to grow the base of members. Benefits like free baggage, an automatic 15% discount when redeeming SkyMiles as a cardholder, and a boost toward earning Medallion Status convince those new members to apply for a card. And bigger-and-bigger welcome bonuses – like current offers now as high as 125,000 SkyMiles – lure in even more new applicants.
That system has helped the airline set record after record for new cardmember acquisitions. Hauenstein said Thursday that those new applicants are increasingly opening premium cards like the Delta SkyMiles® Platinum American Express Card and the top-tier Delta SkyMiles® Reserve American Express Card – a win-win for the airline.
“We've been acquiring a record number of premium cardholders, and their spend is multiples of what our base member card spend is,” Hauenstein said. “Those customers have better credit scores, so they get approved more often and they spend more on their cards.”
Between selling miles to the bank to package into those big bonuses, higher annual fees, and steady swipe fees, Delta is on track to earn a whopping $8 billion this year from its relationship with American Express, still in pursuit of a longstanding goal to surpass $10 billion a year. And the strategy to hit that number goes far – it's even influencing where Delta actually flies.
Hauenstein singled out both Austin (AUS) and Raleigh (RDU) – a pair of airports where Delta has rapidly expanded within the last year or two – as core to the company's strategy to grow credit card revenue.
“Why Austin or why Raleigh? Well, these are high-income growth areas, these are places that we've acquired a lot of cards in,” he said. “Trying to understand the interaction between the airline and the card and how to maximize both of those together as opposed to just looking at an individual route.”
Bottom Line
It may not sound like much, but the fact that a third of Delta's active SkyMiles members have a co-branded card in their wallet is shocking … and impressive.
And based on what Delta has done in the last year and change, that number will likely grow even bigger. Or, as Hauenstein put it: “We have further runway as both engagement and member penetration continue to rise.”
