The US Airways card from Barclays will take applications until US Airways and American combine into a single airline in early 2015. After that, the card will be re-branded as an American card.
There will be two issuers of American Airlines co-brand credit cards. However, Barclaycard will not issue any new cards once the airlines have combined into one. That way Citibank will be the exclusive issuer of American’s co-brand card cards.
Nealon specifically denied the rumor that existing US Airways cards would become Arrival cards (earning and redeeming Barclaycard’s proprietary points) as was done when they lost the Virgin America relationship.
“We are not planning to rebrand any US Airways card member to Arrival,” Nealon says. “They will become American AAdvantage card members and they will have all the benefits that come along with that.”
And they’re going to be as aggressive as possible signing up new cardmembers until their right to do so goes away.
“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. “We continue to be the exclusive providers of a card that gives US Airways-specific benefits when you fly US Airways.”
“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.
When US Airways and America West merged, Barclaycard provided funding for the transaction and got the co-brand relationship. But Bank of America had an existing contract, their card remained in place for some time. They even sued, but eventually Barclaycard bought out their portfolio.
It’s otherwise quite uncommon for a travel brand to have to co-brand card issuers. The only travel provider in the U.S. that I can think of in that situation is Hilton, which has both American Express and Citibank issuing cards that award Hilton benefits and points.
How long will this dual relationship last? That’s uncertain. There could be lawsuits, or one bank buying out the other (it’s hard to imagine Barclaycard squeezing out Citi, it would almost have to be the other way around). But supposedly the contracts provide the potential for the existing US Airways card to last for quite some time.
In 2008, Barclaycard’s contract with US Airways was extended to March 2017. After US Airways merged with American Airlines, Nealon says Barclaycard’s contract was extended again. Nealon declined to provide details about the duration of the most recent extension, but says American’s contracts with the two card issuers expire at the same time.
Assuming that Barclaycard is providing the complete picture here, this is very very interesting.
Folks should have until early next year to apply for the US Airways card. And the opportunity to apply will go away after that, but not the opportunity to keep and use the card.
At some point I’d expect Barclaycard to bow out. Their cardholder portfolio will get less value over time through aging and attrition. Citi has access to more capital and might well buy out the remainder of their deteriorating asset that Barclaycard cannot replenish. Or they could last until the end date of the co-brand contract that Barclaycard has in place.
Developing… but still more information and less speculation than we were dealing with before!
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