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Delta Air Lines Inc. has extended an agreement with U.S. Bancorp to acquire and process Visa and MasterCard credit card payments until the end of 2011, Delta announced in documents filed today with the U.S. Securities and Exchange Commission. Under the contract, Minneapolis-based U.S. Bank will not withhold any portion of Atlanta-based Delta's card receivables. But it could withhold funds in the future if financial problems indicate Delta could cease operating, which would leave the acquirer liable for card payments on cancelled Delta flights. In June 2007, U.S. Bank returned to Delta an $800 million reserve fund for card receivables it had begun withholding in September 2005, when Delta was in bankruptcy proceedings (CardLine, 6/14/07 and 9/29/05). Under the new agreement, U.S. Bank also will begin acquiring Visa and MasterCard credit transactions for Eagan, Minn.-based Northwest Airlines Inc. after Delta finishes its acquisition of Northwest. The airlines expect to close that deal later this year.
