American Express Co.'s two-year-old Delta Sky Miles Optima credit card has surpassed Citibank's American Airlines AAdvantage card in customers, a recent survey found.

The survey by Brittain Associates Inc. of Atlanta concluded that 2.8 million people hold the Delta card versus 2.7 million holders of the AAdvantage card.

The Citibank program is considered the granddaddy of air-mile rewards programs, and it held the top spot a year earlier when Brittain first surveyed the market.

This year, the two largest programs were each about twice as large as No. 3, the United Airlines card issued by First Chicago NBD Corp., which held second place last year.

Brittain surveyed more than 8,000 households by telephone in the fourth quarter of 1997 and used the responses to estimate portfolio numbers.

Last year, Delta Sky Miles had only 1.1 million cardholders, according to the survey. Bruce Brittain, principal of the consulting firm that bears his name, attributed the growth to heavy advertising.

"Delta is one of the largest airlines with one of the largest frequent- flier programs, and they have been aggressively hitting that base-as well as general consumers-through electronic media," Mr. Brittain said.

Citibank was not distressed by the growth of its competitor, pointing to a separate Brittain finding that AAdvantage cardholders rely more heavily on the product than do cardholders of other airlines.

About 70% of AAdvantage customers used the card as their primary one; 16% of Delta cardholders said the same. About 28% of AAdvantage customers said they used the card three times a week or more, compared to 8% of Delta customers.

"We have tremendous loyalty from our cardholders, and these findings support that," said Maria Mendler, a Citibank spokeswoman.

Mr. Brittain said the AAdvantage portfolio is "more mature" than Delta's; it often takes time, he said, for customers to begin using a new card as their primary one.

The recent addition of a Delta Sky Miles platinum card signals "an increased effort to pump more vigor into the portfolio," Mr. Brittain said.

Robert Rosenblatt, American Express' vice president of partnerships, sales, and relationships, said the Delta program has attracted a high percentage of people who revolve balances, which is unusual for an airline card.

"We want to build business for Delta by placing the card in the hands of as many of their core frequent travelers as possible," Mr. Rosenblatt said.

Competition between the two carriers is likely to intensify, said Russ Schoper, president of Business Developments International of Alpharetta, Ga. Delta just announced a push into Latin America, where American has "a very strong presence."

In other findings, the Brittain survey said that people who carry cobranded airline credit cards-representing just under 6% of U.S. households-are big spenders, charging $15,000 to $20,000 annually on their cards.

These 12 million consumers tend to pay off their balances monthly but do give card companies revenue through annual fees and merchant discount fees, which are based on purchase volume.

Airline accounts are attractive to card issuers because they tend to produce fewer delinquencies and chargeoffs, Mr. Schoper said. "They are probably comparable to the best gold card portfolio that you might have."

Brittain identified 14 airlines with credit card programs. The survey found that some of the smaller programs had lost customers to the larger ones during 1997. Among the losers were Continental Airlines, America West Airlines, and British Airways. The Star Miles Travel Account, offered by Star Banc in Cincinnati and not tied to a specific airline, also saw participation decline.

"Airline cards have not become more popular," Mr. Brittain said; "market share has shifted."

The smaller portfolios "probably lacked a strong acquisition program in '96 and '97," Mr. Brittain said. "All portfolios have attrition, and unless you traditionally have a program that brings in as many people as you lose, you lose ground."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.