28 July 2025

American Airlines and Mastercard have renewed their long-standing partnership, reinforcing a decades-long collaboration built on rewards, loyalty, and cutting-edge payments technology. This new agreement cements Mastercard’s role as the exclusive payment network partner for American’s co-branded credit cards and promises to deliver more seamless, personalized experiences for AAdvantage® cardholders in the years ahead.

“We had previously extended our contract with Mastercard in 2016, and with our new, exclusive partnership with Citi announced in December, now was the time to renew our long-standing partnership with Mastercard to deliver our customers more rewarding travel experiences and value through advanced payments technology and services,” said Chad Schweinzger, vice president of co-brand and partners at American Airlines, in an interview with MoveTheNeedle.news.

The timing of the deal is no accident. It follows American’s December 2024 announcement of a landmark 10-year extension of its co-branded credit card agreement with Citi. Citi is set to become the exclusive issuer of the AAdvantage® co-branded portfolio in the U.S. beginning in 2026, consolidating the program under one roof after agreeing to acquire the portfolio previously issued by Barclays. Customers with Barclays-issued cards will retain the same benefits during the transition.

This dual move—extending with Mastercard while consolidating with Citi—highlights how central co-branded credit cards have become in the strategy of global airlines, particularly in the United States.

The Growing Value of Co-Branded Cards

At the core of the new agreement is the AAdvantage® program—one of the most established and valuable frequent flyer programs in the airline industry. Originally launched in 1981, AAdvantage was the world’s first airline loyalty program. It has since evolved into a sophisticated ecosystem that rewards customer loyalty not just in the air, but across a broad range of everyday spending categories.

American’s co-branded credit cards are the gateway to this ecosystem. Through everyday purchases, customers earn AAdvantage miles, which can be redeemed for flights, upgrades, and other travel perks. The model is a win-win for all sides: consumers receive valuable travel rewards and elite status benefits, while American gains stickier customer relationships and high-margin revenue streams from its banking partners.

The economics are compelling. Co-branded card programs generate billions in annual revenue for airlines through the sale of loyalty points to issuing banks. Banks in turn earn interest, interchange fees, and increased card usage from a high-value, travel-oriented customer base. For consumers, the appeal is simple: with every grocery run or gas station visit, they move closer to their next getaway.

A Strategic Asset in Airline Loyalty

Co-branded credit cards have become more than just financial products—they’re strategic assets. On American’s second-quarter earnings call, last week, CEO Robert Isom emphasized the central role of AAdvantage and co-branded cards in the airline’s growth strategy.

“Our work to grow the AAdvantage program and enhance our partnership with Citi is continuing as we prepare for the start of our new ten-year agreement in January 2026,” he said. “Active AAdvantage members have grown 7% year-to-date, with our highest growth in enrolments coming from Chicago, Dallas Fort Worth, and New York.”

That growth is not just cosmetic. AAdvantage members account for approximately 77% of premium cabin revenue, according to Isom, underscoring their outsized contribution to American’s profitability. Spending on co-branded cards was up 6% year-over-year in Q2 2025, even amid shifting macroeconomic conditions.

“Advantage members are more engaged, generate higher yields versus non-members, and are a key driver for premium cabin demand,” said Isom.

What Mastercard Brings to the Table

As American’s exclusive payment network partner, Mastercard plays a key role in enabling the global reach, security, and innovation behind the AAdvantage credit card offering.

“We are proud to extend our decades-long collaboration with American Airlines,” said Linda Kirkpatrick, President of North America at Mastercard, in a statement accompanying the announcement. “Together, we are continuing to modernize the travel experience, ensuring cardholders enjoy the benefits, security, and seamless service they’ve come to expect.”

Mastercard’s global acceptance network and focus on digital-first experiences align well with American’s vision of a frictionless loyalty journey. Innovations such as contactless payments, biometric ID at airport terminals, and AI-powered fraud prevention all feed into the seamless, premium experiences that frequent flyers increasingly expect.

For Mastercard, the deal also reflects a strategic pivot toward deep, experience-based partnerships. The company has moved beyond simple transaction processing and now aims to create “priceless” moments for cardholders—especially in travel, where emotional loyalty is strongest.

Looking Ahead: AI, Personalization, and Embedded Loyalty

The future of co-branded cards lies in personalization and platform integration. As American Airlines and Mastercard expand their partnership, both companies are investing in tools to enhance the digital cardholder experience—from in-app perks and real-time travel updates to more dynamic offers based on spending behaviour and travel patterns.

That future also includes greater use of AI. American has hinted at plans to use machine learning to tailor rewards and offers to customer preferences, improving both satisfaction and redemption rates. The result is a smarter loyalty engine that drives business outcomes.

American’s roadmap also reflects a wider trend across the travel industry. In an age of high customer acquisition costs and low switching barriers, loyalty is increasingly seen as the best insurance against commoditization. Airlines, hotels, and even car rental agencies are investing heavily in loyalty platforms that blend payments, personalization, and omnichannel touchpoints.

A Model for the Industry

American’s strategy offers a model for how legacy carriers can leverage partnerships—not just for financial benefit, but to deepen customer relationships and modernize the travel experience. As competition intensifies and customer expectations rise, those who control the loyalty experience will likely control the market.