Citi will be American Airlines’ sole co-brand partner, a loss for Barclays

The news: American Airlines named Citi as its sole co-brand credit card partner, dropping its relationship with Barclays, per CNBC. The airline will transition Barclays cardholders to Citi in 2026.

The dual card provider arrangement stemmed from American Airlines’ 2013 merger with US Airways. American started renegotiating its co-brand credit card contracts earlier this year.

How this helps Citi: The card issuer no longer has to share American Airlines’ massive cardholder base, bringing it a bevy of new customers.

• American co-brand cardholders account for 6% of US air travelers, according to the airline.
• And the growth opportunity is huge: American’s loyalty AAdvantage members make up 23% of all US air travelers, a large group of co-brand card prospects to whom Citi can directly market.

With a larger customer base, Citi will also have a bigger revenue opportunity.

• Citi and Barclays don’t break out the income they bring in from the card program, but American’s revenues show the magnitude of the program's overall value: The airline boasted $5.6 billion in revenues from its co-brand credit card program in the 12 months through September 30.
• And the airline expects these revenues to grow 10% annually.

What it means for Barclays: The UK-based bank is trying to expand its presence in the US credit card market to boost its profit and share price. But recent co-brand card partnership losses like American are creating setbacks.

• Barclays lost the Choice Hotels co-brand to Wells Fargo last year.
• And Deutsche Bank will take over Lufthansa’s co-brand card from Barclays next year.

Barclays will take over the General Motors (GM) program next summer, which could help it offset some of these losses. But the issuer still faces an uphill battle growing its US presence.

Our take: This deal is a major win for Citi. Not only will it gain new cardholders and more revenues, but solidifying itself as the sole co-brand partner to one of the largest US airlines can boost the issuer’s push into travel.

• The company launched a booking platform, Citi Travel, in partnership with Booking.com in 2023 that lets cardholders book flights, hotels, car rentals, and other travel services.
• And this fall, Citi enhanced the platform by integrating its card-linked installment offering, Flex Pay.

To grow the platform’s adoption and Citi’s card volume, the issuer can offer American co-brand cardholders additional rewards when paying with their cards on Citi Travel.

This article is part of EMARKETER’s client-only subscription Briefings—daily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends. To help you finish 2024 strong, and start 2025 off on the right foot, articles like this one—delivering the latest news and insights—are completely free through January 31, 2025. If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.