Delta Airlines (NYSE:DAL) had a strong beginning to its Tuesday as the company’s stock was soaring following its announcement that it has inked a deal with American Express (NYSE:AXP) to renew the partnership between the two businesses.
The Atlanta, Ga.-based airline said today that it has renewed its credit card partnership with AmEx through 2029, and the latter company will pay Delta nearly double as much per year compared to its previous fee. AmEx will shell out up to nearly $7 billion a year by 2023, while the business shelled out $3.4 billion in 2018.
The two companies previously extended their partnership back in 2014 for five years, and the two have been partners since 1996, bringing in plenty of revenue over the years for AmEx. The deal consists of AmEx only issuing Delta credit cards, with some AmEx card members garnering access to the airline’s network of airport lounges.
Card owners will also be able to transfer points from the credit card organization’s MemberShip Rewards program to the airline’s SkyMiles rewards program. AmEx may be shelling out more dough, but the business insists that extending this partnership makes sense financially.
Delta also increased its forecast for its first-quarter results Tuesday, unveiling an earnings guidance of 85 cents to 95 cents per share, above its previous outlook of 70 cents to 90 cents per share. Analysts see this figure as reaching 81 cents per share, per a FactSet survey.
DAL stock is gaining about 6% on Tuesday following the news, while AXP stock is down 0.6%.