American Airlines Stock Surges on New, Exclusive Credit Card Deal With Citi

American Airlines Stock Surges on New, Exclusive Credit Card Deal With Citi

Shares of American Airlines Group ( AAL ) soared 15% Thursday after the carrier announced it had signed a new, exclusive credit card partnership with Citi ( C ), which will be taking over Barclays' ( BCS ) share of the portfolio.

American Airlines and Citi, who have partnered on credit cards for more than 37 years, inked a 10-year extension with the bank "becoming the exclusive issuer of the AAdvantage co-branded card portfolio in the U.S. in 2026." Up until now, American Airlines has issued cards with both Citi and the British bank Barclays.

"The agreement creates an innovative alignment between the Citi ThankYou and AAdvantage card programs and is designed to drive incremental value for both companies and produce a significantly expanded loyalty and rewards offering for AAdvantage members and Citi-branded cardmembers," the companies said.

In a Securities and Exchange Commission (SEC) filing, American said it expects an annual increase in cash payments of about 10% annually. The carrier—which said it received roughly $5.6 billion from its co-branded credit card and other partners for the 12 months ended Sept. 30—estimates it will receive about $1.5 billion in annual pre-tax benefits compared to 2024 as those payments approach $10 billion per year.

Investors appeared to cheer the move. Citi stock and U.S.-traded shares of Barclays both were up about 2% in recent trading, while American Airlines stock hit its highest level since the summer of 2023.

American Also Raises Q4 Outlook

In its regulatory filing, American also raised its fourth-quarter guidance issued on Oct. 24, as "the pricing and revenue environment has continued to improve."

American now expects fourth-quarter Total Revenue per Available Seat Mile (TRASM) to be roughly flat to up 1% from Q4 2023, up from a decline of 1% to 3%, and adjusted earnings per share (EPS) to be between $0.55 and $0.75, above the prior range of about $0.25 to $0.50.

UPDATE—This article has been updated with American Airlines' financial projections from the deal and sales guidance, as well as the latest share price information.

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