Delta signs $2 billion card deal with Amex

10 December 2008

The world's biggest carrier, Delta Air Lines has signed a timely $2 billion deal with American Express and said it would cut $100 million operating cost, from combining operations with its newly acquired Northwest Airlines as IATA revealed that the industry would lose $2.5 billion next year due to declining passenger traffic.

The deal extends the long-running SkyMiles partnership with Amex buying $1 billion worth of frequent-flyer miles in advance and Amex concluded the deal two years before its earlier contract was set to expire. Delta will sell an additional $1 billion through rate improvements and increased volumes by the end of 2010.

The agreement has a five-year extension period, running up to 2015 and will have a total value of $15 billion for Delta.

Amex continued its relationship with Delta although it merged with the Atlanta-based  Northwest Airlines, which had US Bancorp as its credit card partner for WorldPerks and points earned on the cards by Northwest will be transferred when WorldPerks and SkyMiles become fully integrated in 2009.

Delta president Edward Bastian said in a news release, ''Pairing the world's premier airline loyalty program with the world-class American Express brand continues a history of offering superior and innovative programs for our customers.''

United Airlines and Continental Airlines raised millions of dollars by making advance sales of reward miles to credit-card partners JPMorgan Chase, this year.