Capital One Canada and Delta End Credit Card Partnership
Change continues in the Canadian credit card landscape. In the last few years we’ve seen TD acquire the Aeroplan credit card program, CapOne win the Costco deal, RBC take on Shoppers DrugMart, Scotia buy into Canadian Tire, Target disappear, and who knows what’s going to happen to Sears Canada’s program with Chase. Now we’re seeing the much smaller Capital One Canada Delta Gold and World card exit stage left.
The program may have shut down because it just never realized the size required to make it worth CapOne’s focus, and CapOne decided not to renew. Or, perhaps Amex Canada is taking over the program on renewal because Amex has the Delta program in the U.S. – a conjecture which would make sense.
Regardless, the program was not without its challenges from the outset. Canada is a small marketplace, and international carriers cannot fly domestically. So Delta’s Sky Miles program was really only good for those looking to travel exclusively to the United States. However, the challenge for Delta in Canada, was that both Air Canada and Westjet have a lot more direct flights from Canada to the United States. Why would anyone limit themselves to Delta, when they could belong to an airline loyalty program like Aeroplan that flies them everywhere Delta does – and much more.
In all likelihood, only the most die hard Canadian Delta frequent fliers were attracted to the card – likely a very small demographic. Most Canadians likely had far more earn and redeem opportunities with either Aeroplan, Westjet or one of the many new flexible Canadian travel credit cards that allow you to redeem points for any travel charge on your credit card statement.
All that said, there is a precedent for niche American carriers doing well in Canada – which may serve as a blueprint for success. The Alaska Air World Elite MasterCard has done phenomenally well in Canada. Perhaps, a winning value proposition has something to do with it. The Alaska Air program offers a 25,000 mile sign-up bonus, a companion ticket for $121 USD that can be used to fly to Hawaii, and only comes with a $75 annual fee. It also flies to places, in frequencies that Air Canada and Westjet do not. Cardholders can also use their Alaska Air Mileage Plan points to fly on American Airlines, Delta, British Airways, Air France, KLM and a host of other Qualifying Partner Airlines at fantastic mile transfer rates. Alaska Air also puts its weight and enthusiasm behind marketing the credit card program in plane and at the gate – something we did not see on Delta flights in Canada.
We do hope someone picks up the Delta co-brand program, if for no other reason than to keep a semblance of competitiveness in the marketplace. We would love Canadians to benefit from higher credit card sign-up bonuses spurred by intense competition – in the United States welcome bonuses are almost double that of Canadian credit cards.