Delta’s Travel Demand and SkyMiles Card Growth Reinforce Amex Bull Case

We’ve reviewed the earnings conference call and transcript for Delta Air Lines' (DAL) December quarter, and we want to share a few items with you.

First, Delta's results point to continued strength in air travel as we move further into 2026, which is a positive for consumers and their spending. They also point to the strong co-branded card relationship Delta has with our own American Express (AXP) , and are very supportive of what Amex is likely to say when it reports Jan. 30.

First things first, let’s hear from Edward Bastian, Delta’s CEO, on the start of 2026:

"Last week, we set a new record for bookings, with cash sales up double digits on top of the strength that we saw last year. Top-line growth is accelerating on consumer and corporate demand, supporting an outlook for revenue growth of 5% to 7% in the March quarter.

"Business travel is showing signs of improvement as corporate confidence grows, with the most recent survey of corporate customers indicating that they expect to grow their travel spend this year."

While we tend to focus on the Amex Platinum Card refresh initiative, those comments support a nice outlook for Amex’s consumer services and commercial services billed to business. In Q3 2025, billed business attributed to airlines accounted for ~6% of total billed business, but when you travel like that, there tend to be lodging and dining expenses. Those two categories accounted for 7% and 5%, respectively, of Amex’s total billed business in Q3 2025.

Now let's turn to the co-branded relationship between Amex and Delta, which is a long-standing one with Amex being the exclusive issuer of Delta's co-branded SkyMiles credit cards. Delta captures revenue from card spending, fees, and loyalty benefits such as SkyMiles earning and redemption, including perks like Sky Club access, free checked bags, and Companion Certificates for cardholders. Those cards range from no annual fee to ones with annual fees between $350-$650. Needless to say, it is a lucrative deal for both companies, and one that extends through 2029.

On the subject of the Amex-Delta co-branded card relationship, Bastian shared the following this morning:

"Our Delta Amex co-brand card portfolio continues to deliver double-digit spend growth, outpacing the broader consumer credit card industry…

"For the year, American Express remuneration grew 11% to $8.2 billion, driven by a fourth consecutive year of more than 1million new card acquisitions and double-digit year-over-year co-brand spend growth in every quarter."

Back in October, Delta guided that renumeration to $8 billion, which means that $8.2 billion figure signals greater-than-forecasted spending on those Amex-Delta cards.

"Roughly one-third of active SkyMiles members carry a co-brand card, and we see a significant runway ahead as member engagement and penetration continues to rise."

That supports the view that Amex will see an uptick in billed business, but it also suggests additional growth for cards in force and potentially average fee per card above and beyond the Platinum Card refresh.

And it seems Bastain shares our view on President Trump’s move to cap credit card interest rates at 10%:

"I think one of the big issues and challenges with the potential order is the fact that it would actually restrict the lower end consumer from having access to any credit, not just what the interest rate they're paying, which would upend the whole credit card industry. So from our standpoint, we'll be working closely with American Express, but I don't see any way we could even begin to contemplate how that would be implemented."

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At the time of publication, TheStreet Pro Portfolio was long AXP.