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United Airlines

United’s Relationship With Chase Bank Under Review?

United’s Relationship With Chase Bank Under Review?
Joe Cortez

After “underperforming” against legacy carriers, new direction may be coming

United Airlines could be rethinking how flyers earn points on the ground, after market shifts have seen the carrier “underperform” against legacy competition. In an article titled, Chase Sapphire Reserve Card Buzz Could Be a Problem for United Airlines, Skift reports the Chicago-based carrier and their partner, Chase Bank, could be coming back to the table for the benefit of both parties – and their flyers.

Earlier this year, United president Scott Kirby – who was formerly president at American Airlines – said his new carrier was “underperforming” in back-end financial deals, compared to his former employer and Delta Air Lines. Part of this was attributed to the launch of the Chase Sapphire Reserve, with a popular response from frequent travelers.

While analysts held some concern over airline-branded cards after JP Morgan Chase announced third quarter earnings because premium cards “cut into” the airline businesses’ bottom line, at least one analyst worried the airline’s position to get a new deal together had dropped. However, there is optimism on United’s options, because of Kirby holding the executive title and the importance of financial products to both companies.

“We view it as likely that United can renegotiate,” Joseph W. DeNardi of Steifel wrote in a research note for Steifel. “Given President Scott Kirby’s familiarity with the American deal, Chase’s desire to keep United happy, and the successful track record of airlines renegotiating early.”

Aside from those made by Kirby on the call, United has not offered further insight into where their programs are going.

View Comments (6)

6 Comments

  1. diver858

    October 16, 2017 at 1:51 pm

    Big 3 US airlines continue to devalue their mileage programs and elite status, should not be surprised when customers vote with their feet, move to private label credit cards (Chase Sapphire, Citi Premier / Prestige).
    This appears to be the first indication that recent changes are beginning to have an impact on the executive suites, perhaps the pendulum will start to swing back the other way.

  2. BobSallese

    October 17, 2017 at 3:49 am

    I do believe that United lost a lot of business when it had ended relationships for Continental frequent flyers through the use of American Express. Now if the change anything that hurts the frequent flyer with a Chase United card, it will be devastatng to them. The best thing they can do is either improve the point value with Chase purchases and renew their repationship with AMEX as “United” instead of the now terminated “Continental”. United foolishly got rid of all the things that made Continental so great including the rights for Platinum Amex users to use the lounges. Fortunately, AMEX has opened their own lounges in some airports. It was foolish for United to merge with Continental if they were going to cancel all the perks that Continental flyers loved. They became their own worst enemy in doing so. Still, I have hope that United will turn things around as they have been getting better, Plus, their relationships with Airlines like Copa and Azul has been great. They should just be careful about dissing Chase United cardholders or they will be the cause of their own demise,

  3. lbotez

    October 17, 2017 at 5:54 am

    I hardly ever use my Chase UA card anymore. I get 5% from booking through Amex Travel/3% from Chase Sapphire Reserve, plus the points are worth more for travel. I still have it for getting a free bag when I fly domestically, but 2X UA miles isn’t worth all that much these days.

  4. atomicfront

    October 17, 2017 at 7:27 am

    Could be that Chase’s 5/24 rule has kept the number of people getting United credit cards down. Maybe if they stay with Chase they will remove 5/24 from this card.

  5. abner o'mal

    October 17, 2017 at 6:40 pm

    5/24 has definitely had an impact so Citibank and Amex keep getting my spend.

  6. Dhamal

    October 18, 2017 at 4:12 am

    Time to unload the 1.5 million miles from Chase saphhire..

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