Both American Express and Delta Air Lines see a demand for travel through continued use of their co-branded credit cards. Is there a pent-up demand for travel among consumers, however? And if so, when will the airline industry recover from its coronavirus slump?
Delta Air Lines Confident of Future Growth Thanks to Credit Card Demand
The coronavirus pandemic is changing the landscape of the credit card industry. More and more issuers are swapping out travel-centric card perks for “at-home” benefits to attract – and retain – consumers.
Despite this trend towards everyday value, many travel cardholders are not only holding on to their co-branded airline credit cards but also continuing to rack up miles with their daily spending. According to Delta Air Lines and American Express, that trend is an encouraging sign of things to come.
“A Really, Really Encouraging Sign”
During an investor presentation in Atlanta, Delta CFO, Paul Jacobson, stated that he sees the continued use of co-branded airline cards as a sign of pent-up travel demand waiting to break free:
Amex Sees Continued Strength In Travel Credit Cards
Those sentiments were further echoed by Amex’s CEO, Stephen Squeri, in a financial reporting conference call in July. “Once consumers feel safe again, you will have this unbelievable pent-up demand for people to want to get out and travel,” he told investors then.
Squeri noted that American Express’ co-branded credit cards, which includes airline and hotel credit cards with major names like Delta and Hilton, are performing better than expected – and better than many of the company’s other credit card products.
The belief within Amex is that consumers are shifting their focus to obtaining elite status in loyalty programs, such as Delta’s SkyMiles frequent flyer program. This thought process is based on the premium benefits that come with elite tiers, including access to flight upgrades, lounge access, and other perks that can make travel both safer and more comfortable.
When Will the Travel Recover?
How long this desire to travel will remain pent-up is unknown. According to the U.S. Travel Association, domestic flights are down by more than 60% as of last month, as travelers are still wary of a second wave of the coronavirus.
Still, the Travel Association is optimistic that consumer confidence will eventually bounce back. The group launched a new campaign, “Let’s Go There,” earlier this month to encourage Americans to plan (or at least consider) future travel. The goal of the program is to remind weary Americans that “better days are ahead.”
About Delta Air Lines Credit Cards
Delta Air Lines currently offers seven co-branded airline cards through American Express. These cards run from no-annual-fee cards, like the Blue SkyMiles Card, to ultra-premium versions, like the impressive Delta Reserve and Delta Reserve for Business Cards:
- Delta Reserve® Credit Card
- Delta Reserve® for Business Credit Card
- Platinum Delta SkyMiles® Credit Card
- Platinum Delta SkyMiles® Business Credit Card
- Gold Delta SkyMiles® Credit Card
- Gold Delta SkyMiles® Business Credit Card
- Blue Delta SkyMiles® Credit Card
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