United’s Relationship With Chase Bank Under Review?
#1
Original Poster
Join Date: Sep 2005
Location: JZRO
Posts: 9,169
United’s Relationship With Chase Bank Under Review?
#2
Moderator
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
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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.
History: When Ultimate Rewards launched in 2009 there were four transfer partners (BA, CO, IHG, Marriott). UA did not join until late 2011.
Last edited by mia; Oct 17, 2017 at 4:14 pm Reason: Add UR/UA history.
#3
Join Date: Aug 2010
Location: LAS, MPL
Programs: DL Platinum, 1 MM
Posts: 1,321
Just curious, what exactly does underperform mean in this context? Not enough charges on the CC, so Chase does not buy enough miles from United? And why would that be a problem, I always thought miles are a big liability on the books of airlines.
#4
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Unredeemed miles are a liability, but that's an accounting term. It doesn't have a negative connotation in this context. UA wants to sell as many miles as they can, at as high a price as they can -and- they want to maximize the bounty that Chase pays them for each new co-branded account. Mileage Plus also wants to maximize customer engagement, and they might conclude that a multi-partner transfer program doesn't achieve that objective.
Last edited by mia; Oct 17, 2017 at 4:17 pm
#5
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Join Date: Jul 2008
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I don't know this, but I'd expect that there is some form of revenue to United for spend on their co-branded cards while spend on the CSR, there wouldn't be any kickback for that. I'd be willing to bet that CC spend on the United co-brand cards is down, maybe a lot, since the CSR release, since if you hold both, there's no reason to spend on your United card when you earn more points on the CSR (unless it's a United flight and you need the checked bag waiver, or you're spending to meet the PQD waiver). Also with the United card being 5/24 restricted that must be limiting new sign ups at least a bit.
#6
Join Date: May 2013
Programs: UA Au Marriott Ti Hilton C
Posts: 159
As a guy that just bought a UA ticket today using CSR, this is perfectly timed.
The UA Chase products are simply inferior. I'd suggest that UA use caution here - I'm already close to dumping my UA Chase card.
I have a feeling that UA's "enhancements" will backfire on them.
Here's some free advice for Kirby - make your card and FF programs more compelling and you will see your customers return.
The UA Chase products are simply inferior. I'd suggest that UA use caution here - I'm already close to dumping my UA Chase card.
I have a feeling that UA's "enhancements" will backfire on them.
Here's some free advice for Kirby - make your card and FF programs more compelling and you will see your customers return.
#7
FlyerTalk Evangelist
Join Date: Jul 2008
Location: IAH
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UA's card isn't *that* different from the competing airlines. The main differences between the MileagePlus Explorer and say the Citi AA Platinum and Amex Delta Gold IMO are: 1) UA gives you 2 club passes a year, the other two don't give any. You can use these or resell them, I mean they're worth $15ish on ebay; 2) UA gives you access to better economy award availability on some flights, YMMV, if that's of any value; and 3) UA makes you buy your ticket with the card for a free checked bag, while AA/DL don't, so that's a bit of a ding for me.
The other competitive argument, who else would UA pair up with for a co-brand card? Every other major issuer already has an airline, or in Barclay's case they have like 4, so.... where would they go without DL or AA throwing a fit? I think UA and Chase, for better or worse, are kinda married to each other for the near/mid term.
Edit: now that I think about it, there really isn't much reason to spend on any of the normal airline cards, because if you're earning faster on other Amex/Chase products and can just transfer to Delta and United/SW, respectively, why use the airline card at all unless you're going for the PQD waiver? Chase/UA actually give you an incentive to spend because you get a 10k mile bonus if you spend $25k/yr on the card. Again, something the AA/DL cards don't have at the $95/AF level, but that's a lot of spend to put on 1 card that has no meaningful multipliers.
Last edited by krazykanuck; Oct 17, 2017 at 9:28 pm
#8
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The price per mile may not be the same in these two contracts, but the big difference is engagement with MileagePlus. The customer earning UR isn't committed to UA.
#9
Join Date: May 2013
Programs: UA Au Marriott Ti Hilton C
Posts: 159
Good post, krazykanuck.
I should have been more clear - I think CSR is superior to all of the airline branded cards.
In my experience, the UR portal is often competitive or better than (to me) the ever diminishing availability of flights via FF programs.
I have wondered what Chase's other co-branded card partners (UA, Marriott, etc) think about UR.
Here's my guess: They've lost material market share to UR cards and they aren't happy about it.
I'll be interested to see how this plays out.
I should have been more clear - I think CSR is superior to all of the airline branded cards.
In my experience, the UR portal is often competitive or better than (to me) the ever diminishing availability of flights via FF programs.
I have wondered what Chase's other co-branded card partners (UA, Marriott, etc) think about UR.
Here's my guess: They've lost material market share to UR cards and they aren't happy about it.
I'll be interested to see how this plays out.
#10
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Join Date: Oct 2006
Location: SFO/SJC
Programs: UA Silver, Marriott Gold, Hilton Gold
Posts: 14,884
I don't know this, but I'd expect that there is some form of revenue to United for spend on their co-branded cards while spend on the CSR, there wouldn't be any kickback for that. I'd be willing to bet that CC spend on the United co-brand cards is down, maybe a lot, since the CSR release, since if you hold both, there's no reason to spend on your United card when you earn more points on the CSR (unless it's a United flight and you need the checked bag waiver, or you're spending to meet the PQD waiver). Also with the United card being 5/24 restricted that must be limiting new sign ups at least a bit.
The other competitive argument, who else would UA pair up with for a co-brand card? Every other major issuer already has an airline, or in Barclay's case they have like 4, so.... where would they go without DL or AA throwing a fit? I think UA and Chase, for better or worse, are kinda married to each other for the near/mid term.
Good post, krazykanuck.
I should have been more clear - I think CSR is superior to all of the airline branded cards.
In my experience, the UR portal is often competitive or better than (to me) the ever diminishing availability of flights via FF programs.
I have wondered what Chase's other co-branded card partners (UA, Marriott, etc) think about UR.
Here's my guess: They've lost material market share to UR cards and they aren't happy about it.
I'll be interested to see how this plays out.
I should have been more clear - I think CSR is superior to all of the airline branded cards.
In my experience, the UR portal is often competitive or better than (to me) the ever diminishing availability of flights via FF programs.
I have wondered what Chase's other co-branded card partners (UA, Marriott, etc) think about UR.
Here's my guess: They've lost material market share to UR cards and they aren't happy about it.
I'll be interested to see how this plays out.
The other issue is that no matter what, CSR (and Amex Plat...and Citi Prestige, etc.) are still out there and are competing. If Chase and UA were to end their agreement, UA would find another bank and have them offer their cards. And they'd still have the same issues of competing...doesn't matter which bank is issuing it. UA could, i suppose, pull out of UR, hoping that there would be many that switch back to a UA card (whether they are issued by Chase or someone else). But I'm not sure that would work out so well. CSR and similar are always going to offer more flexibility than single-airline branded cards. UA could try to add new features to help make up for that, but reality is, they will never be as flexible.
#11
Original Poster
Join Date: Sep 2005
Location: JZRO
Posts: 9,169
I think Kir Baby doesn't like a couple of things:
Hopefully, Kir Baby's gambit will release UA-branded cards from the yoke of 5/24. Or, even better, if a new bank begins issuing UA-branded cards we can all have a field day applying willy-nilly.
- Chase's self-serving 5/24 rule stymies issuance of UA-branded cards to otherwise perfectly qualified applicants. He wants his cards in lots of wallets and couldn't care less how many other cards we've applied for in the last two years.
- As others have mentioned, the ability to convert UR points into UA miles disincentives use of UA-branded cards. For example: I book all UA travel on my CSR card rather than my Explorer card because I'd rather get 3 URs than 2 MPs. I'm elite, so I don't need to worry about free bags.
Hopefully, Kir Baby's gambit will release UA-branded cards from the yoke of 5/24. Or, even better, if a new bank begins issuing UA-branded cards we can all have a field day applying willy-nilly.
#12
Join Date: Jun 2014
Posts: 207
This. Its whats preventing me from getting an united card. Will fall below 5/24 in a few months and will be applying for the marriott card (replace spg) and maybe save a pull in case the 100k reserve bonus comes back. Would like an united card, but thats just not going to happen.
#15
Join Date: Apr 2013
Location: Bucks County
Programs: UAL GS & Million Miler; Delta Lifetime Gold; Hilton Diamond; Marriott Platinum; Legion Etrangere
Posts: 1,609
Have Presidential Plus Card but likely not much longer. Received "offer" yesterday: spend 49K by the end of the year and get 5000 miles- not a misprint. I know someone else with same card: spend 20K and get 7500 miles. Really?