I also understand that another big loser would be IBM who would lose tens of millions per year in IT contracts with DAL
Delta deal could hurt American Express revs -analysts
Tue Nov 21, 2006 5:19 PM ET
NEW YORK, Nov 21 (Reuters) - A US Airways Group Inc. <LCC.N> takeover of bankrupt Delta Air Lines Inc., <DALRQ.PK> could cut into revenue at American Express Co. <AXP.N>, whose Delta SkyMiles credit card is among its more popular products, Credit Suisse analysts said.
If US Airways successfully takes over Delta Air Lines, Delta's credit card relationships may change, the analysts said in a note distributed late on Monday.
US Airways made an unsolicited $8 billion offer for bankruptcy Delta Air last week.
Valerie Wunder, a spokeswoman for US Airways, said it was too soon to tell what would happen to Delta's credit card programs if US Airways acquired the company. Right now, US Airways is doing it's due diligence, she added.
US Airways has credit card relationships with Barclays Plc <BARC.L> and Bank of America Corp. <BAC.N>, although it is terminating its relationship with the latter.
American Express's Delta SkyMiles credit card portfolio accounts for less than 10 percent of spending on American Express credit cards worldwide, Credit Suisse analysts said. In the first nine months of 2006, about $408.0 billion was spent on American Express cards globally.
"Our partnership with Delta continues to bring substantial value to both organizations, and we look forward to continuing our relationship," said Molly Faust, a spokeswoman for American Express.
If the acquisition goes through, which Credit Suisse sees as having a roughly 40 percent chance of happening, American Express would likely do all it could to keep Delta business, the analysts said.
Some portion of the Delta card customers would likely switch to other American Express cards, the analysts added.
Delta deal could hurt American Express revs -analysts
Tue Nov 21, 2006 5:19 PM ET
NEW YORK, Nov 21 (Reuters) - A US Airways Group Inc. <LCC.N> takeover of bankrupt Delta Air Lines Inc., <DALRQ.PK> could cut into revenue at American Express Co. <AXP.N>, whose Delta SkyMiles credit card is among its more popular products, Credit Suisse analysts said.
If US Airways successfully takes over Delta Air Lines, Delta's credit card relationships may change, the analysts said in a note distributed late on Monday.
US Airways made an unsolicited $8 billion offer for bankruptcy Delta Air last week.
Valerie Wunder, a spokeswoman for US Airways, said it was too soon to tell what would happen to Delta's credit card programs if US Airways acquired the company. Right now, US Airways is doing it's due diligence, she added.
US Airways has credit card relationships with Barclays Plc <BARC.L> and Bank of America Corp. <BAC.N>, although it is terminating its relationship with the latter.
American Express's Delta SkyMiles credit card portfolio accounts for less than 10 percent of spending on American Express credit cards worldwide, Credit Suisse analysts said. In the first nine months of 2006, about $408.0 billion was spent on American Express cards globally.
"Our partnership with Delta continues to bring substantial value to both organizations, and we look forward to continuing our relationship," said Molly Faust, a spokeswoman for American Express.
If the acquisition goes through, which Credit Suisse sees as having a roughly 40 percent chance of happening, American Express would likely do all it could to keep Delta business, the analysts said.
Some portion of the Delta card customers would likely switch to other American Express cards, the analysts added.
