US Airways Dividend Miles (Pre-FlightFund Merger) - Interesting filing (RE: BOA DM card agreement)

http://www.donlinrecano.net/dr201/mwc/04-13819/dk000857-0000.pdf

It's the amended version of the agreement with BOA for the DM credit cards, which has two very interesting covenents:


(a) US Airways shall retain at least forty percent (40%) of the total number of US Airways daily flights based on the total number of US Airways scheduled daily flights as of May 20, 2003.

(b) US Airways shall not increase the number of miles required for any award
under the Dividend Miles Program, unless US Airways gives the Bank at least
thirty (30) days’ prior written notice of such increase and in the event that the Bank reasonably determines that such increase materially and adversely affects the Program because it renders the Program uncompetitive with Competing Card Programs, then the Bank may terminate this Agreement on ninety (90) days’ prior written notice to US Airways unless US Airways agrees to modify such increase to make the Dividend Miles Program competitive with Competing Card Programs.

I'm not sure that the 40% bogey is any great shakes, but unless the entire legacy industry decided to collude on mileage awards the way they do on price, at least US has a hurdle before they go screwing with mileage awards again.

The co branded credit card is a legacy of the Natonsbank and Piedmont relationship, when Nationsbank had just changed names from NCNB (North Carolina National Bank). At the beginning, there were two regional presences, joining forces in their common marketing area. Roll forward. Piedmont merges with USAir, and ends up in the tank. Meantime, Nationsbank keeps growing, buys bigger banks, eventually taking the more famous name of an acquisition, and ends up being the second biggest bank in the country, within striking distance of number one. At this point, they can do better for airline affinity partners (they already have popular regional, Alaska), so they set the stage for departure if things get worse, and they get a better offer from somebody more attractive. In business, as in anything, you are known by the company you keep.