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AMEX and Delta created a 3 headed monster and now need to regroup

AMEX and Delta created a 3 headed monster and now need to regroup

Old Sep 14, 2023, 7:02 pm
  #1  
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AMEX and Delta created a 3 headed monster and now need to regroup

AMEX has 5 billion reasons to to reevaluate the business model and Delta is at their feet. From the outside this looks like Delta basically saying "Spend, or no lounge access" I think AMEX said "Hey Delta thanks for signing up so many people, appreciate it, but they only use the card to access the lounges. We pay you 40 million dollars a month and we have our own lounge network." Amex has its own growing Lounge network and frankly the only reason I have a platinum card is for the lounges. I don't care about miles and free flights. I used to. I think we all did. Now? Not so much. Lounges have surpassed free flights and have become a stand alone product that gets new users. I think Delta knows what's coming up the pike from Amex. Amex won't be paying them as much in the future, they have Centurion product that people know about and are willing to pay for without the Delta affiliation. It doesn't go from 5 billion to zero, but will maybe go from 5 billion to 3 billion. Delta needs to cull the herd to keep their high net flying customers happy because when all of this shakes out, they need those customers to make up for the future Amex revenue reduction. It's Amex that holds the cards now. They are taking it in-house.
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Last edited by jfktocdg; Sep 14, 2023 at 7:40 pm
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Old Sep 14, 2023, 7:22 pm
  #2  
 
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I have been watching these moves wondering exactly what was up behind the scenes and I had a feeling that AMEX (or more specifically the behind the scenes interactions/negotiations between AMEX and Delta in their mutual lusty pursuit of profits). I have also been wondering if Delta has eyes on a new Non-Amex CC relationship in its future based on what is going on. Once the Centurion Lounges started to pop up in a lot more locations, you knew AMEX was eventually going to start to strong arm Delta. Try to give them a lot less per swipe and at the very time Delta wants more.
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Old Sep 14, 2023, 7:32 pm
  #3  
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Originally Posted by Miesque
I have been watching these moves wondering exactly what was up behind the scenes and I had a feeling that AMEX (or more specifically the behind the scenes interactions/negotiations between AMEX and Delta in their mutual lusty pursuit of profits). I have also been wondering if Delta has eyes on a new Non-Amex CC relationship in its future based on what is going on. Once the Centurion Lounges started to pop up in a lot more locations, you knew AMEX was eventually going to start to strong arm Delta. Try to give them a lot less per swipe and at the very time Delta wants more.
I mean yeah, except that I think Delta sees the writing on the wall and I don't think Amex will "need" a single partnership, I think that when the contract is up at the end of 2028 they are going to say "hey, this has been great and all we both benefited but it's time to go our separate ways" My opinion? Amex is the winner. Delta made BILLIONS but IRONICALLY, it's like Delta's teaser rate is up and Amex is paying in full and exiting. What do they leave with? IMO Amex Platinum as a stand alone product and their growing lounge network. Delta leaves with a maybe exclusivity but is gambling on loyal flyers who want a premium product, that works in this economy, not sure how it works when things turn. And things always turn.
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Old Sep 14, 2023, 7:38 pm
  #4  
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Originally Posted by jfktocdg
AMEX has 5 billion reasons to to reevaluate the business model and Delta is at their feet. From the outside this looks like Delta basically saying "Spend, or no lounge access" I think AMEX said "Hey Delta thanks for signing up so many people, appreciate it, but they only use the card to access the lounges. We pay you 40 million dollars a month and we have out own lounge network." Amex has its own growing Lounge network and frankly the only reason I have a platinum card is for the lounges. I don't care about miles and free flights. I used to. I think we all did. Now? Not so much. Lounges have surpassed free flights and have become a stand alone product that gets new users. I think Delta knows what's coming up the pike from Amex. Amex won't be paying them as much in the future, they have Centurion product that people know about and are willing to pay for without the Delta affiliation. It doesn't go from 5 billion to zero, but will maybe go from 5 billion to 3 billion. Delta needs to cull the herd to keep their high net flying customers happy because when all of this shakes out, they need those customers to make up for the future Amex revenue reduction. It's Amex that holds the cards now. They are taking it in-house.
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Old Sep 14, 2023, 7:39 pm
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And I'll add that as a frequent flyer out of JFK, I love the Delta product and I hope that that Amex takes some of those Delta billions and shifts them to Priority Pass. I don't use the Delta lounges that often and could live without them if I could consistently get into Centurion, they keep expanding and they take the Priority Pass lounges. Frankly, if I'm being totally selfish and could wave my wand? Keep the Centurion Lounges and the PP lounges exclusive to Amex Platinum ONLY. Not Delta Amex, not this or that Amex, Just Amex Platinum. And, Essentially buy Priority Pass lounges. If AMEX ever wants to make a foothold in Europe this is the gangster move.
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Old Sep 14, 2023, 8:19 pm
  #6  
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Originally Posted by jfktocdg
AMEX has 5 billion reasons to to reevaluate the business model and Delta is at their feet. ..............
It's Amex that holds the cards now. They are taking it in-house.
Sorry - you are wrong on both counts
Amex had Costco - fully 10% of all their spend
Amex had SPG - 15% of all amex spend - evaporated after Marriott devalued SPG amex earn rates
They lost both!
They had to hand on to DL as the last major loyalty program. DL is the single major program for Amex.

Amex once had SW, CO as transfer partners ; now firmly under Chase umbrella along with UA.
Amex Platinum once offered AA lounge access as well as DL lounge access.
Amex charge card and credit volume will take a huge hit if DL goes with Citi or Chase.

Amex does not hold the cards - DL does - as long as spend increases on the DL cards (as it did 60% DURING the pandemic years) DL can devalue all they want
Can you believe the spend on DL cards is 1% of entire US GDP?
AND people were spending MORE on the DL cards during the time they were stuck at home and travel was not easy and cash was safe?
Most folks have no idea and just look at the vague advertising promising a fantasy.
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Old Sep 14, 2023, 8:21 pm
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Costco? I dare you to shop at Costco and try to check out with your Amex. Go, and lmk how that works out.
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Old Sep 14, 2023, 8:25 pm
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Originally Posted by jfktocdg
And I'll add that as a frequent flyer out of JFK, I love the Delta product and I hope that that Amex takes some of those Delta billions and shifts them to Priority Pass. I don't use the Delta lounges that often and could live without them if I could consistently get into Centurion, they keep expanding and they take the Priority Pass lounges. Frankly, if I'm being totally selfish and could wave my wand? Keep the Centurion Lounges and the PP lounges exclusive to Amex Platinum ONLY. Not Delta Amex, not this or that Amex, Just Amex Platinum. And, Essentially buy Priority Pass lounges. If AMEX ever wants to make a foothold in Europe this is the gangster move.
Except there are no PP lounges. PP pays lounge owners for access. PP actually is good for lounge owners at off-peak times for additional revenue. For example TK lounge at Dulles. It runs from 0730 to 2300. No way it would be open that much without PP. Same with AF/KL - they are 0700 to 2100. And BA lounge opens for PP only in the morning / noon time (in fact I think it is not open to OW members during that time)

edit: removed BA comment - looks like it is no longer PP. Not surprised with AF/VS/TK/LH lounges all PP the BA one was the worst on the list (been to BA plus all except VS)
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Old Sep 14, 2023, 8:43 pm
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Originally Posted by jfktocdg
Costco? I dare you to shop at Costco and try to check out with your Amex. Go, and lmk how that works out.
Read the post again.
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Old Sep 14, 2023, 8:50 pm
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Originally Posted by jfktocdg
Costco? I dare you to shop at Costco and try to check out with your Amex. Go, and lmk how that works out.
They said Amex had Costco. And they lost them in 2016. It was big news back then. Same with SPG which was a great Amex product and the replacement Marriott card is nowhere near as good.
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Old Sep 14, 2023, 9:42 pm
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Originally Posted by jfktocdg
Costco? I dare you to shop at Costco and try to check out with your Amex. Go, and lmk how that works out.
ahem

Costco had a tie-up with Amex. They moved it to Visa.
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Old Sep 14, 2023, 9:44 pm
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Originally Posted by GrayAnderson
ahem

Costco had a tie-up with Amex. They moved it to Visa.
They moved it to Citi.
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Old Sep 14, 2023, 9:45 pm
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Originally Posted by matchbox20_is
They said Amex had Costco. And they lost them in 2016. It was big news back then. Same with SPG which was a great Amex product and the replacement Marriott card is nowhere near as good.
The card isn't bad. The program is a lot weaker, however.

[I basically only use my ex-Starwood Amex (the old design was better!) for the occasional stay at a Marriott property. It resides in the back of my wallet otherwise. When it was a Starwood card, it was my go-to card for unbonused spend. 1x Starwood points=1.25 points with their transfer partners, so the question was that vs my Chase FU card. 2 Bonvoy points=0.83 points with their transfer partners...]
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Old Sep 14, 2023, 9:59 pm
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Originally Posted by GrayAnderson
The card isn't bad. The program is a lot weaker, however.

[I basically only use my ex-Starwood Amex (the old design was better!) for the occasional stay at a Marriott property. It resides in the back of my wallet otherwise. When it was a Starwood card, it was my go-to card for unbonused spend. 1x Starwood points=1.25 points with their transfer partners, so the question was that vs my Chase FU card. 2 Bonvoy points=0.83 points with their transfer partners...]
It's kind of a distinction without a difference to me. That card gave out 1 Starpoint per $1 for (I think) a $95 AF. Unreal value. I know it was popular with people to transfer Starpoints to airlines, but I could routinely get 3 cents per point using them at hotels without even trying and had some redemptions over 7 cents per point.

Then they transferred the Starpoints to Marriott at 1:3 and the new card earned...2 Marriott points per $1.

I liked the design too, very classy. Even the old burgundy colored one before they issued the violet ones.
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Old Sep 14, 2023, 10:07 pm
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Originally Posted by DLASflyer
They moved it to Citi.
Sort-of both. Costco's cards moved to Citi, but the Citi cards are Visas so Costco takes spend from any Visa (e.g. CSR, CFU, Hyatt).
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