JetBlue Weighs Shifting Credit-Card Portfolio Away From Barclays

(Bloomberg) -- JetBlue Airways Corp. may move its $3 billion credit-card portfolio from Barclays Plc as it considers borrowing more from the government to help weather the Covid-19 pandemic.

The firm sent requests for proposals seeking bids after Barclays asked the airline to extend their partnership agreement, according to people familiar with the matter. Barclays and Goldman Sachs Group Inc. are vying for the business, the people said, asking not to be identified because the matter is private.

“Because we are exploring a path for the government loan or a non-governmental transaction for our future liquidity needs, we needed to accelerate an RFP for our co-brand credit card,” JetBlue said Thursday in a statement. “Our RFP will help us evaluate the right partner for us in this new travel landscape as we emerge from this crisis, and in light of other co-brand deals that have taken place since we last signed our agreement.”

The company didn’t elaborate on the connection between deliberations on liquidity needs and the partnership with Barclays, and it declined to comment on which companies are part of the negotiations.

Representatives from London-based Barclays and Goldman Sachs declined to comment. The Wall Street Journal reported the RFP earlier Thursday.

Barclays and JetBlue, which is based in Long Island City, New York, still have three years left on their current agreement, meaning any changes wouldn’t take effect immediately. The two have been partners since 2016, and the portfolio has tripled since then, according to one of the people.

“We’ve had a great five-year collaboration with Barclays, and the performance of our co-brand card has exceeded expectations,” JetBlue said in the statement. “They have been an instrumental partner to our business and the success of our loyalty program.”

Two Cards

JetBlue and Barclays have two cards together. One, with no annual fee, offers perks including three points per dollar spent on purchases with the airline and two points per dollar spent at restaurants and grocery stores. The JetBlue Plus Card, with a $99 annual fee, offers six points per dollar spent with the airline.

Last year, JetBlue became one of the first U.S. carriers to sell loyalty points to its co-brand credit-card partner to raise cash, generating $150 million from Barclays as the coronavirus pandemic crushed demand for travel.

“It’s a good time to negotiate, particularly given Goldman’s apparent ambitions with its consumer card business following its partnership with Apple in 2019,” Joe DeNardi, a Stifel & Co. analyst, said in a note Thursday. “JetBlue’s co-brand opportunity is significant, so we suspect it’s interested in finding a partner who sees that and is willing to invest aggressively behind that.”

Barclays has been seeking to diversify its card offerings in the U.S., which have long focused on hotels and airlines, and last year inked a deal to take over a co-branded credit-card deal with AARP.

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