View Poll Results: No longer transfer Chase UR→UA @ 1:1 ratio (or at all)? What to do? What to do?
[NO] UA Card, [NO] Ultimate Rewards Card → [NO CHANGE] I still don't want any UA/UR Chase product
8.06%
[✓] UA Card, [NO] Ultimate Rewards Card → [NO CHANGE] I keep my UA card and [DO NOT] carry UR card.
9.48%
[✓] UA Card, [NO] Ultimate Rewards Card → [I KEEP] my UA card(s) and [ADD] UR Chase card(s).
3.79%
[✓] UA Card, [NO] Ultimate Rewards Card → [I CLOSE] Chase UA card and [DO NOT WANT] a UR Chase card.
1.90%
[NO] UA Card, [✓] Ultimate Rewards Card → [NO CHANGE] I dont carry a UA card and I [KEEP] my UR card
25.59%
[NO] UA Card, [✓] Ultimate Rewards Card → I [ADD] a UA card and I [CLOSE] my UR card.
0
0%
[NO] UA Card, [✓] Ultimate Rewards Card → I [ADD] a UA card and I [KEEP] my UR card.
0.95%
[✓] UA Card, [✓] Ultimate Rewards Card → [NO CHANGE], I keep [BOTH] my UA and UR Chase cards.
24.64%
[✓] UA Card, [✓] Ultimate Rewards Card → I [KEEP] my UA card(s) and [CLOSE] my UR card(s).
2.37%
[✓] UA Card, [✓] Ultimate Rewards Card → I [CLOSE] my UA card(s) and [KEEP] my UR card(s).
23.22%
Voters: 211. You may not vote on this poll

United pushes JPM on Sapphire Reserve

Old Jul 4, 19, 7:27 pm
  #271  
 
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Originally Posted by GUWonder View Post


I am pretty certain that UA can’t change mileage prices so quickly and easily when it comes to its contractual counter-party with whom it’s in a massively material value, long-term contract for selling huge numbers of miles. And that would mean the price change would have to be agreed by both sides prior to becoming effective.

The biggest bank card issuers have had lawyers tighten up these agreements over the years and I doubt that they’ve gotten so sloppy as to make exiting or breach — or a contrived exit to veil intent to breach — any easier for the airlines than before. Speaking of the airlines for whom the banks have affinity bank cards.
I never said, or meant to imply, that changing the exchange rate would be quick or easy. But, think of it, if you were UA and thought you were getting screwed by a long-term partner, wouldn't you be contemplating a range of actions, such as:

1. Pulling out of UR
2. Changing redemption rate for UR purchase of UA miles
3. Starting long-term discussions with AMEX about co-branded cards and their MR program
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Old Jul 4, 19, 7:43 pm
  #272  
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Originally Posted by 747FC View Post
I never said, or meant to imply, that changing the exchange rate would be quick or easy. But, think of it, if you were UA and thought you were getting screwed by a long-term partner, wouldn't you be contemplating a range of actions, such as:

1. Pulling out of UR
2. Changing redemption rate for UR purchase of UA miles
3. Starting long-term discussions with AMEX about co-branded cards and their MR program
Sure, but Citi is getting very cost-sensitive and increasingly risk averse; Amex may be interested but DL already had Amex cornered, and I would guess it has cornered Amex when it comes to US3 relationships.

Could UA try going to Barclays or some other relatively big bank and make a deal? Sure, probably after paying a break up penalty of one sort or another. But then the parties would still be encountering the reality that very large deals are going to still be within a limited range of value due to factors that the bank can’t play with too much without taking on more risk or doing some things that the bank just may not be comfortable doing.

If UA ends up with say BMO Harris, I will be laughing.
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Old Jul 4, 19, 8:27 pm
  #273  
 
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Originally Posted by GUWonder
If UA ends up with say BMO Harris, I will be laughing.
If there were to be a move (which I doubt) it would be interesting to see if Goldman Sachs would bid. They want to get into the consumer area and have the apple deal currently (which reports note doesn't make much money).
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Old Jul 4, 19, 9:46 pm
  #274  
 
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Originally Posted by 747FC View Post
I never said, or meant to imply, that changing the exchange rate would be quick or easy.
I’m in the “I don’t think they can do that” boat. They may be able to raise the price Chase pays for new miles, but I don’t think there’s anything they can do to prevent Chase from handing out the ones that they’ve already issued at whatever redemption rate they want.

Originally Posted by JHake10 View Post
If there were to be a move (which I doubt) it would be interesting to see if Goldman Sachs would bid. They want to get into the consumer area and have the apple deal currently (which reports note doesn't make much money).
AFAIK, nobody in the world has an Apple Card yet, so I don’t know how much stock to put into those reports.
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Old Jul 4, 19, 11:27 pm
  #275  
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Originally Posted by JHake10 View Post


If there were to be a move (which I doubt) it would be interesting to see if Goldman Sachs would bid. They want to get into the consumer area and have the apple deal currently (which reports note doesn't make much money).
I would suspect that Goldman may benefit way more from first getting a bigger base of current account holders than from getting first into the UA bank card business.

Given the state of US airline mileage programs becoming increasingly worse places to bank rebate currency from card spend, if I were Goldman or not, I would not want to tie my fortunes up with too much credit exposure to the retail crowd (of UA bank card users) that doesn’t know a bad deal when they see one and continues spending without regard to negative changes in value of the rebate currency.
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Old Jul 5, 19, 12:58 am
  #276  
 
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Originally Posted by jsloan View Post
I’m in the “I don’t think they can do that” boat. They may be able to raise the price Chase pays for new miles, but I don’t think there’s anything they can do to prevent Chase from handing out the ones that they’ve already issued at whatever redemption rate they want.
I doubt that Chase would stockpile millions or billions of UA miles. I would think their inventory management process would be wiser than that.

What would be a barrier to a change would be any contractual agreement. Once the terms have been met, anything is fair game.

Be that as it may, do you expect UA to just sit there and perceive themselves as being victimized or shorted by Chase without exploring better deals with Chase or other vendors? It may not be AMEX, but heck, who saw Costco dumping AMEX for Visa?
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Old Jul 5, 19, 2:43 am
  #277  
 
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Originally Posted by 747FC View Post
I doubt that Chase would stockpile millions or billions of UA miles. I would think their inventory management process would be wiser than that.
I recall a story coming out a few years back that Chase had propped UA’s liquidity up by purchasing something like nine figures’ worth of MileagePlus miles. I don’t know if they’re currently still buying in large chunks or not.
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Old Jul 5, 19, 2:52 am
  #278  
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Originally Posted by jsloan View Post

I recall a story coming out a few years back that Chase had propped UA’s liquidity up by purchasing something like nine figures’ worth of MileagePlus miles. I don’t know if they’re currently still buying in large chunks or not.
If that is true, Kirby has a lot of gall to be pissy with an entity that helped UA stay afloat.
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Old Jul 5, 19, 6:05 am
  #279  
 
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Originally Posted by halls120 View Post
...Kirby has a lot of gall...
But we knew that already, right?
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Old Jul 5, 19, 8:54 am
  #280  
 
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Originally Posted by 747FC View Post
Be that as it may, do you expect UA to just sit there and perceive themselves as being victimized or shorted by Chase without exploring better deals with Chase or other vendors?
Or maybe Chase was victimized by UA devaluing MileagePlus?
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Old Jul 5, 19, 10:38 am
  #281  
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Originally Posted by halls120 View Post
If that is true, Kirby has a lot of gall to be pissy with an entity that helped UA stay afloat.
The US3 airlines loyalty program devaluations have shown that the programs are less about rewarding loyalty than they are now about “what has the customer done for me very recently” and “you are your fare”. So it shouldn’t surprise anyone that the US3 airlines could be ingrates even in the face of their money/finance-supplying institutional saviors.

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Old Jul 5, 19, 11:25 am
  #282  
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Originally Posted by GUWonder View Post


The US3 airlines loyalty program devaluations have shown that the programs are less about rewarding loyalty than they are now about “what has the customer done for me very recently” and “you are your fare”. So it shouldn’t surprise anyone that the US3 airlines could be ingrates even in the face of their money/finance-supplying institutional saviors.

Over the past ten years, things have definitely been migrating from relationship based to transactional. In the next recession, it will be interesting to see how United deals with the behavior it has been cultivating.
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Old Jul 5, 19, 5:32 pm
  #283  
 
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Originally Posted by jsloan View Post

I’m in the “I don’t think they can do that” boat. They may be able to raise the price Chase pays for new miles, but I don’t think there’s anything they can do to prevent Chase from handing out the ones that they’ve already issued at whatever redemption rate they want
​​​​​
I very much doubt UA can increase the cost for Chase to buy miles, write similar agreements all the time, and can guarantee, without ever having laid eyes on the contract, Chase's price to buy miles is locked in for the term of the Agreement, and probably contains a bulk purchase discount. If not, Chase should immediately fire whoever negotiated that Agreement.
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Old Jul 5, 19, 6:16 pm
  #284  
 
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Interesting to read all the reactions, from sanguine to hysterical. Timely too, as my old PP card is coming up for renewal and the CSR is looking better and more flexible.

I have UA PP, AA Exec and Jetblue Plus. Have been migrating away from UA for a variety of reasons, not the least of which is their outrageous pricing at EWR, where I can get the same ticket at LGA or JFK for 10-50% less, sometimes even on UA. I kept the PP because of club access, but the clubs are horrible, and I don't care that much anymore. I also don't fly as much as I used to, so the Premier Flex Qual Miles have been useful so I can at least board early, even though Silver is basically useless at this point.

Domestically, we've moved over to Jetblue for almost 90% of it (legroom, wifi, decent planes, carry ons, and schedules), and the Barclay based Plus card is pretty decent so far. They do dynamic award pricing, so not that great on the FF front, but good enough for most domestic needs.

I'm completely torn on whether to ditch the venerable Presidential Plus and move to CSR. The fact that airfare is 3x on CSR on any airline vs 2x on PP UA only is pretty insane, especially as we fly more for pleasure at this point in our lives and we use all sorts of airlines (Norwegian, Ryanair, etc) so CSR is a massive kick in value.

AA has devalued to some extent, and they just jacked the Admirals Club fees, but with the Exec card, my family can still go there with their cards.
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Old Jul 5, 19, 8:02 pm
  #285  
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Here’s some more about Kirby and his efforts to squeeze more money out of his corporate partners despite having long-standing agreements already in place that UA negotiated and agreed to accept years back:

https://www.google.com/amp/s/skift.c...gan-chase/amp/

Almost since he joined United as president in August 2016, Scott Kirby has been working to reach a new deal with Chase with more favorable economics.

United’s current agreement puts it at a considerable disadvantage to its peers, said Joseph DeNardi, an analyst with Stifel who follows loyalty closely. United’s previous management team had announced the agreement in 2015, and while the airline has not said how long it lasts, DeNardi said he expects it goes through 2021.
If I were Chase, I would not be playing kindly with UA under Kirby. Kirby came into UA with UA having had a very fresh, long term contractual agreement with a Chase — say five-year term agreement even as it may be more — and before the ink was even too dry, he tried to renegotiate while exploiting industry and competitive firm information he had picked up from his former employer.
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Last edited by GUWonder; Jul 5, 19 at 8:08 pm
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