American Express Co. hasn’t seen an uptick in attrition so far after a series of changes by its largest partner Delta Air Lines Inc. sparked complaints from the credit-card giant’s customers.
(Bloomberg) — American Express Co. hasn’t seen an uptick in attrition so far after a series of changes by its largest partner Delta Air Lines Inc. sparked complaints from the credit-card giant’s customers.
In recent weeks, Delta announced it will limit the number of times that customers with Amex’s Platinum and Business Platinum cards will be able to access its Sky Club airport lounges. Customers later flocked to online forums and threatened to cancel their cards over the changes.
In reality, though, Amex hasn’t seen a significant decrease in card membership, Chief Financial Officer Christophe Le Caillec said in an interview.
“The bark is worse than the bite,” Le Caillec said. “We’re watching attrition, we’re watching acquisition performance,” and there hasn’t been meaningful drop-off in either metric, he said.
Delta has already walked back some of the unpopular changes. Customers with the Platinum and Business Platinum cards will now get 10 days of free access a year instead of the previous six visits the company had outlined earlier in September, Delta said this week.
The changes will go into effect in January. Platinum card holders previously had unlimited access to Delta’s lounges when flying on a Delta-operated flight, though Amex has said its internal data showed that six visits a year would have accommodated the “vast majority” of those cardholders.
Amex has been investing in its proprietary Platinum card portfolio for years. The product comes with a $695-a-year fee and offers a bevy of benefits including $400 in annual credits for spending on airlines and hotels.
Amex was supportive of Delta’s moves, Chief Executive Officer Steve Squeri said in a separate interview. The tweaks should help Delta CEO Ed Bastian deal with overcrowding in his lounges, he said.
“Delta went out and made changes, which I think were the right changes to make to cater to the premium customer,” Squeri said. “They got some push back, and he’s a very customer-focused guy and decided to pull back on some of those things and those pull backs are fine.”
Amex is the bank behind the Delta SkyMiles Reserve and Delta SkyMiles Reserve Business cards. The company didn’t see any impact on card acquisition or spending levels from the changes, Squeri said.
Amex has said Delta is its largest cobrand partner, according to an investor presentation last year. The airline’s cards accounted for 21% of the company’s loans and 9% of spending on the firm’s cards in 2021, the presentation showed.
–With assistance from Mary Schlangenstein.
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