After US Airways merged with American Airlines, Nealon says Barclaycard's contract was extended again. In 2008, Barclaycard's contract with US Airways was extended to March 2017. "They will become American AAdvantage card members and they will have all the benefits that come along with that." "We are not planning to rebrand any US Airways card member to Arrival," Nealon says. At the conclusion of Barclaycard's Virgin America program, the issuer converted existing accounts to its private-label travel rewards product, called the Arrival card leading to speculation that existing US Airways accounts would also get replaced by the Arrival product. In the case of AirTran, Chase launched its own frequent flier card with the airline in October 2012 and acquired Barclaycard's legacy AirTran portfolio in April 2013, adding those accounts to its existing base of cardholders. This month, Alliance Data Systems replaced Barclaycard as the issuer of Virgin America's frequent flier card. Chase, which also issues the Southwest Airlines frequent flier card, currently maintains separately-branded frequent flier cards for the two airlines while Southwest continues to integrate operations following its May 2011 acquisition of AirTran. Airline co-brands are great performers, so we all work hard to win these and to retain these and to maximize shareholder value," says Nealon.īut recently, some of Barclaycard's airline affinity programs have hit some turbulence, resulting in various outcomes for both the issuer and its card holders.īarclaycard lost AirTran's frequent flier card program to JPMorgan Chase last year.
"Airlines are a real plum asset for a bank. Barclaycard has more than 30 co-branded card products across a number of consumer segments, including six airlines. What was less clear was where the merger would leave Barclaycard, which began issuing US Airways-branded cards in 2006.
"Citi got pretty aggressive back in the spring to say that they're going to use this opportunity in the merger to negotiate a strong partnership with the new American going forward," he says. The airline's decisions to not extinguish its contract with Citi during bankruptcy, and later, granting the bank exclusive rights to include membership to its airport lounges with Citi's top-tier AAdvantage credit card were strong indicators that Citi and American would retain their partnership. It stands to grow to 101 million members, not accounting for overlap between the two current programs, according to the airline's estimates.Ĭiti's relationship with American Airlines began in 1987 and its continuation after American emerged from bankruptcy last year doesn't come as a surprise, says McKone. It has 69 million members and issued 167 billion miles in 2011, according to regulatory filings. The AAdvantage program is the oldest and largest frequent flier program in the U.S. "From a relationships standpoint on the card, it would be simpler to consolidate with one and in prior mergers, that's what you've seen." It's something where you want to minimize any unnecessary risk because there are a bunch of things that have been integrated," he says. "When you're undergoing a merger, it's one of the most tremendously operationally-complex things that an airline can do. airlines, and when two airlines that have relationships with different affinity card issuers merge, only one typically prevails, says Dan McKone, an industry consultant who serves as a managing director and partner at L.E.K. Prior to the closing of the airlines' merger in December 2013, Barclaycard and US Airways, as well as Citi and American Airlines, each held exclusive rights to issue affinity cards tied to the airlines' respective frequent flier programs. "Our goal over the period between merger and frequent flier program integration is absolutely to maximize the number of new cardholders that we can bring in," he adds. "We continue to be the exclusive providers of a card that gives US Airways-specific benefits when you fly US Airways." "We have a unique opportunity before the brands merge for us to go out there and continue to acquire new card members for the US Airways Dividend Miles program," Nealon says.