Summary
- Large airlines profit from cobranded credit cards.
- American Airlines offers two sets of cards.
- Different cards cater to varied demographics and budgets.
Almost all large airlines, especially full-service network carriers like Delta Air Lines, American Airlines, and United Airlines, have placed heavy emphasis on creating extensive customer-focused loyalty programs to keep travelers coming back. A vital element of these loyalty programs is cobranded airline credit cards, which allow customers to earn loyalty points and other miles on everyday purchases.
As a result, airlines can make impressive amounts of money by selling off loyalty points in bulk, as credit card companies are desperate to secure the most lucrative airline partnerships. Traditionally, airlines will offer a package of flagship cobranded credit cards through a single banking partner, with annual fees ranging from zero up to over $500.
Photo: Philip Pilosian | Shutterstock
United Airlines follows this model, with a single line of cobranded cards offered through Chase Bank, and Delta Air Lines follows suit by partnering with American Express. However, American Airlines does things quite differently, offering two different lines of cobranded credit cards.
The company’s Citi AAdvantage Mastercard offerings nicely complement the AAdvantage Aviator Mastercard lineup offered through banking partner Barclays. In this article, we will take a deeper look at why the carrier offers two different sets of cobranded credit cards and the unique role they serve.
The Citi AAdvantage Mastercard
Before examining why the carrier has chosen to offer two separate lines of cobranded credit cards, it is important to fully understand each set of product offerings. Let’s begin by taking a look at the cards offered by the airline through Citibank, of which there are the following five on offer:
- Citi / AAdvantage Executive World Elite Mastercard
- Citi / AAdvantage Platinum Select World Elite Mastercard
- Citi / AAdvantage Gold World Elite Mastercard
- American Airlines AAdvantage MileUp Mastercard
- Citi / AAdvantage Business World Elite Mastercard
The first thing to note about this set of cobranded cards is that it most closely resembles the offerings of other legacy carriers in the US market, with each card catering to an easily identifiable demographic. At the top of the market sits the carrier’s Executive World Elite Mastercard, which offers the most rewards of all in this lineup, according to Citibank.
With a $595 annual fee, this card mirrors the offerings at the top of United and Delta’s lineups: the United Club Infinite Credit Card and the Delta American Express Skymiles Reserve card. Like these other cards, the American Executive World card includes a full membership to the Admirals Club, the carrier’s primary lounge network.The Platinum Select World Elite Mastercard caters to the broadest demographic of the market, offering decent benefits for a moderate annual fee. Just like the United Explorer card, this product has a yearly fee of $99, which is waived for the first calendar year, alongside a healthy welcome offer.
The American Airlines AAdvantage MileUp card caters to the same portion of the market as other airline cobranded cards with no annual fees, such as the United Gateway card or the Delta American Express Blue card. The AAdvantage Gold World Elite card and the AAdvantage Business World Elite card further cater to a hybrid consumer (in the case of the former with a $50 annual fee) and the small business owner (in the case of the latter with a $99 annual fee).
The AAdvantage Aviator Mastercard
Offered through banking partner Barclays, American’s line of Aviator Mastercards are a little more unique to the carrier and are less easily mirrored by other airlines’ products. In total, there are the following five cards on offer:
- AAdvantage Aviator World Elite Silver Mastercard
- AAdvantage Aviator World Elite Red Mastercard
- AAdvantage Aviator World Elite Blue Mastercard
- AAdvantage Aviator World Elite Mastercard
- AAdvantage Aviator World Elite Business Mastercard
For starters, the business card is easy to discuss right from the start, as it is the most similar to the AAdvantage business card offered through Citibank. With a $95 annual fee and reasonable accrual rates across several categories, it is a decent choice for a small business credit card.
The World Elite Red Mastercard is also relatively easy to discuss, as it offers a $99 annual fee and offers similar accrual rates to the airline’s Platinum Select World Elite Mastercard. Furthermore, with a $49 annual fee, the Blue Mastercard serves a market similar to the AAdvantage Gold card offered through Citibank.
Why Do Airlines Issue Cobranded Credit Cards?
These credit cards provide a number of key benefits for airlines.
According to Business Insider, the Aviator World Elite Silver Mastercard is unique from the others offered by the carrier. It requires a $199 annual fee and emphasizes helping cardholders earn status. Finally, the AAdvantage Aviator World Elite Mastercard has a no-fee option but offers extremely weak accrual benefits, only awarding 1 mile per $2 spent on the card.
So why both?
The origins of American’s two parallel sets of cobranded credit cards date back to the airline’s 2013 merger with fellow legacy carrier US Airways. Before the merger, American Airlines offered its set of Citibank cards due to its preexisting cobranded credit card agreement. US Airways did the same with cards issued through Barclays.
Photo: Markus Mainka | Shutterstock
However, when the two airlines merged, American was forced to take on US Airways’ existing agreement with Barclays and, as a result, converted US Airways credit cards into AAdvantage Aviator cards, according to The Wall Street Journal. Therefore, while the airline prioritizes its Citibank cards (more advertising, placing them higher up on its website), it still offers popular Aviator cards.
What Happened To US Airways?
The airline might not exist as a separate entity, but its rich legacy still endures as one of the pioneers of commercial aviation in the US.
Additionally, the airline offers dozens of credit cards worldwide and hundreds of partner loyalty programs with miles that can be redeemed for travel on American Airlines. In Canada, cobranded AAdvantage cards are offered through Scotiabank and Butterfield Bank.
