By Citigroup Inc (NYSE: C) is in focus this morning after American Airlines Group Inc (NASDAQ: AAL) picked it as its exclusive credit card partner.
The multinational will replace London-based Barclays that has been the flagship airline’s sole credit card partner since 2017.
American Airlines was in talks with Citi over co-branded credit cards since September. Its share price is up close to 10% following the announcement on Thursday.
Unveiling the American Airlines-Citi partnership
The 10-year agreement that American Airlines signed this morning with Citi will go live in January 2026.
It will “expand loyalty and rewards offerings and drive incremental value for both companies,” as per a press release on Thursday.
The new deal will enable Citi to tap into AAL’s customer base to potentially attract new cardholders.
It will benefit from transaction fees, interest payments, and other revenue streams linked with credit cards as well.
Citi stock’s impressive 40% rebound
Note that Barclays cardmembers “will continue to experience the same benefits they do today,” according to American Airlines’ statement today.
Co-branded deals bring in billions for AAL
American Airlines generated $5.6 billion from co-branded deals in the 12 months through September 30th.
The air carrier expects that number to grow by 10% a year moving forward.
According to Robert Isom – the chief executive of American Airlines:
American is proud to have launched the first airline loyalty programme, and with Citi, the travel industry’s first co-branded credit card. This expanded partnership will unlock even more value and exciting new benefits for our customers.
The news arrives more than a month after American Airlines recorded a net loss of $149 million for its third financial quarter but raised its earnings forecast for the year.
AAL now expects to earn $1.60 per share this year.
Its current quarter guidance also topped Street estimates at the time.
American Airlines stock is now up more than 70% versus its low in early August.
Does AAL stock price lack any further upside?
Despite a massive rally over the past four months, analysts at JPMorgan are convinced American Airlines shares will extend their rally in 2025.
The investment firm raised its price target on AAL stock in late October to $20 that indicates potential for another 25% upside from current levels.
JPM is convinced the company’s fundamentals have now bottomed.
It expects the broader sentiment surrounding airline stocks to improve next year and sees American Airlines benefitting as capacity growth moderates.
Earlier this year, AAL fired Vasu Raja – its chief commercial officer after his sales strategy backfired.
Shares of the air carrier based out of Fort Worth, TX do not currently pay a dividend and, therefore, remain unattractive for those in search of passive income.
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