At $650 per year (see rates & fees), the *delta skymiles reserve* already costs a small fortune – but if you ask Delta President Glen Hauenstein, there's still room to grow. During the airline's annual investor day presentation on Wednesday, Hauenstein posed the question: “Is there a new better card out there? We'll put our thinking caps on. Never stay satisfied.”
It's an interesting comment, but is there really a market for this?
It's no secret that Delta prides itself on being a “premium” airline, and most would agree that the Delta Reserve is already a “premium” credit card. But as crazy as it sounds, there probably is a customer segment willing to pay an even higher annual fee in exchange for better perks and benefits.
With Delta set to limit Sky Club visits come February for high-end *amex platinum* and the SkyMiles Reserve cardholders, bringing back unlimited lounge access with a new, more premium credit card would make a lot of sense. For Delta diehards, paying $1,000 or even $1,200 per year for a co-branded credit card with perks above and beyond what's offered on the Reserve might be a no-brainer.
If other recent Amex card refreshes – including the revamped suite of Delta cards – are any indication of what to expect, a new higher end Delta card would likely lean heavy on hard-to-use statement credits from Amex partners and other third parties. The Reserve Card already comes with monthly rideshare and Resy credits – plus, an annual Delta Stays credit. A new, more expensive, Delta card would likely follow a similar format.
To be perfectly clear: Nothing revealed today indicates that a new Delta card is close to hitting the market – developing a new card like this often takes years. But you can bet that if Delta's president is musing about it publicly, the discussion is a lot more robust behind closed doors.
In another telling sign from this morning's presentation, Delta made a point to highlight millennial and Gen Z customers as a key demographic. These generations have more wealth than prior generations at the same age and they aren't afraid to spend it on a more premium product … and that includes credit cards.
This is very similar to what we've been hearing from American Express during its recent quarterly earnings calls – not surprising given the close-knit relationship between the airline and bank. Just how close are the two? Consider this: Delta is expected to make more than $7 billion this year from its relationship with Amex. That's nearly double the amount generated just five years ago – and the airline isn't stopping there, with a long-term goal of growing that figure to $10 billion in the years to come.
Given that ambitious revenue target, it would make total sense for Amex and Delta to go after the millennial wallets with a new, more premium credit card offering.
Only time will tell what, if anything, comes of this but it certainly appears that a more expensive co-branded Delta card could be in the works.
