American Airlines dumps Barclays and picks Citi as its sole credit card partner

In a significant shift in its financial strategy, American Airlines announced that it has entered into a co-branded credit card partnership with Citigroup, moving away from its previous partnership with Barclays. The airline made the announcement during a press conference, indicating that the transition is expected to begin in 2026. American Airlines had been negotiating with Citigroup for several months, discussing a deal that would allow Citigroup to solely manage its credit card programs. This transition reflects a broader trend within the airline industry, where partnerships with financial institutions play a crucial role in generating revenue through the sale of frequent flyer miles. In the fiscal year leading up to September 30, American Airlines received approximately $5.6 billion from such arrangements, and they anticipate that these revenues will increase by 10% annually in the coming years. The decision to partner exclusively with Citigroup is seen as a strategic move that may bolster American Airlines’ financial footing as it navigates a competitive market. The move to Citigroup is expected to enhance the promotions and marketing of credit card offerings, particularly through advertising on flights and in airports. Citigroup will also likely leverage its extensive customer base and resources to attract a broader audience of consumers, encouraging them to use their newly branded cards not only for travel but for everyday purchases as well. American Airlines' management indicated that this transition is part of a larger strategy to innovate and improve their marketing capabilities. The airline's executives mentioned that the revamping of the credit card partnership aligns with their long-term revenue goals, particularly in light of the potential earnings from frequent flyer programs, which serve as a significant revenue stream for airlines. This partnership is also notable against the backdrop of American Airlines' recent performance in the stock market, where shares climbed significantly after the deal was announced, highlighting investor confidence in the airline's revenue growth initiatives. In comparison, other major airlines, like Delta, have achieved substantial revenue through similar partnerships, with Delta’s partnership with American Express generating nearly $7 billion last year and projected to reach $10 billion in the future. American Airlines aims to replicate or exceed this success with Citigroup's partnership, making strategic decisions that take advantage of current trends in customer loyalty and marketing proficiency.