Delta Air Lines expects to collect more than $9 billion from American Express this year, and Chief Executive Ed Bastian says the total is on its way to $10 billion. The money is what the card company pays Delta under their loyalty arrangement. It is Delta’s own forecast, not a number American Express has published.
Bastian told investors on the September-quarter earnings call, “we now expect remuneration of more than $9 billion this year on the way to $10 billion.” Delta’s results statement says payments from American Express rose 15% in the quarter, which positions the full year to top $9 billion.
What the airline says it earns from a credit card
The payments sit inside what Delta calls loyalty revenue. In its September-quarter results, the airline says total loyalty revenue grew 18%, and adjusted total revenue hit a September-quarter record of $17.6 billion, up 16% from a year ago.
Chief Commercial Officer Joe Esposito said on the call that card acquisitions and spend both grew by double digits, and that premium and loyalty revenue were each growing nearly 20%. He also said, “diverse revenue represented 61% of total revenue,” according to the call transcript.
Bastian, answering an analyst, described the loyalty program as an arrangement “principally” with American Express. Esposito added that Delta is seeing “really strong remuneration back to Delta” from the partnership.
Esposito credited cardholders themselves. “The wealth, the spend, the engagement with us is really what’s driving an outsized growth in the loyalty program,” he said, and he noted that SkyMiles membership is growing faster than flight capacity.
Asked about bringing in outside money for the loyalty business, Bastian said, “I’m really reticent to put a third party, a financial investor between us and our best customers.” He also said, “I don’t dismiss the notion that our loyalty plan could be $75 billion or higher.” That is a chief executive’s estimate on a call, not a figure Delta reported.
The airline’s gain raises a practical question for anyone holding one of the co-branded cards: is it worth carrying a balance on it? Delta expects to be paid more than $9 billion this year under the arrangement. A cardholder who carries a balance is paying the card’s interest rate on top, and the Federal Reserve publishes what that rate averages.
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Card money against a 60% jump in fuel
The two numbers pull against each other in Delta’s results. American Express payments rose 15% in the quarter, while the adjusted price Delta paid for fuel rose 60%. Adjusted operating margin slipped to 9.4% from 11.1% a year earlier, and the airline’s reported operating margin was 7.2%.
The cards are cushioning an expensive year for fuel. Delta’s adjusted fuel price averaged $3.61 a gallon in the quarter, up 60% from a year ago and including a 13-cent refinery benefit. For the December quarter the airline projects an all-in $4.25 a gallon, which includes a refinery benefit of about 40 cents.
Adjusted earnings were $1.72 a share, against $1.70 a year earlier, on an adjusted operating margin of 9.4%. Delta’s reported figure was $1.15 a share, down from $2.17. For the fourth quarter it expects $1.15 to $1.65 a share and a 7% to 9% margin, with revenue growth of about 20%.
For the full year, Delta guides to earnings of $5.10 to $5.60 a share and about $2.5 billion of free cash flow. Bastian said the December quarter should still deliver pre-tax profits of $1.2 billion “even with fuel prices expected to double over last year.”
Chief Financial Officer Erik Snell said Delta generated $460 million of free cash flow in the quarter and $1.9 billion so far this year. Bastian said the $2.5 billion expected for the full year funds more than $2 billion of debt reduction.
What a balance on an airline card costs
The Federal Reserve’s consumer credit report, released October 7, puts the average interest rate on credit card accounts at 20.94% for the second quarter. For accounts that were actually charged interest, the average was 22.15%.
At 22.15%, a $5,000 balance left untouched for a year would cost about $1,100 in interest. That is simple arithmetic on the Fed’s average, and an individual card’s rate can be higher or lower. A $2,000 balance at the same rate would cost about $440.
Americans owed $1,352.4 billion in revolving credit in August, the Fed says, a figure that fell at a 4.2% annual rate that month. The Fed’s revolving credit measure covers credit card debt and similar open-ended borrowing.
The open question for a cardholder is the same one Delta is answering for itself: who is paid when the card is used? Delta expects more than $9 billion this year. The cardholder with a balance is paying an average of 22.15% on top, and the airline’s guidance does not change that rate.
Carrying a balance on an airline card?
Delta’s card income is growing while a typical interest-bearing balance costs 22.15% a year. A card that falls behind can end in collector calls, and a collector is supposed to be able to prove the debt before anyone pays it.
The story here is card income, and the job The Bank Account & Debt Protection Kit finishes is what happens when a balance goes sour. It includes the debt-validation steps for making a collector prove a debt, plus a debt inventory, call log and deadline tracker that lists every account, call and date in one place.
Track every card balance and collector call in one debt tracker →
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This article was produced with the assistance of AI and reviewed by the editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
