(Bloomberg) -- For its latest airline card, American Express Co. is looking for people who don't travel. Yet.
AmEx will debut the Blue Delta SkyMiles credit card this week, offering two miles per dollar spent at U.S. restaurants and on Delta Air Lines Inc. purchases, and one mile per dollar spent everywhere else. It will be one of the few airline co-brand cards that don't come with an annual fee, a decision AmEx and Delta made to appeal to millennial travelers, said Eva Reda, the lender's executive vice president of consumer partnerships and product development.
“No annual fee -- that is one of the key things that we're excited about,” Reda said in a telephone interview. “This product is really for those who are just starting to travel.”
The new card's benefits won't include priority boarding, free baggage check or airport lounge privileges offered with other Delta cards.
After losing a bidding war to issue Costco Wholesale Corp.'s credit cards and failing to renew its partnership with JetBlue Airways Corp. in 2015, AmEx has worked to increase spending on its remaining co-brand arrangements. The effort began to pay off this year when the company won exclusive rights to issue credit cards for Hilton Worldwide Holdings Inc.
United Offer
JPMorgan Chase & Co. will also roll out a no-fee airline credit card with United Continental Holdings Inc., the lender said Wednesday in a statement. The United TravelBank Card offers 2 percent in TravelBank cash on United purchases and 1.5 percent on all other transactions. TravelBank cash can be used toward the cost of a United flight, JPMorgan said.
“We noticed an opportunity in this space for United customers – a no-annual-fee card with compelling travel benefits,” Leslie Gillin, president of co-brand cards at JPMorgan, said in the statement.
Delta is expected to reap about $4 billion in cash from its AmEx partnership by 2021, the Atlanta-based airline's executives said during a conference call in July. The two companies expect acquisitions of their joint card to hit a record for the fourth consecutive year, and the new offering should accelerate that trend, said Sandeep Dube, vice president of customer engagement and loyalty for Delta.
“The Blue card really completes the credit-card portfolio from a customer-needs perspective,” Dube said. “Think about someone who's just starting their travel journey, they can take the Blue card. Then over a period of time as they go through life stages, we have the Gold card, the Platinum, the Reserve card.”
Delta represents about 20 percent of AmEx's loans and 7 percent of its billings, according to a presentation the New York-based lender gave in March.
To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net.
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steven Crabill, Dan Kraut
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