QS Dreamer

Today's Wall Street Journal has the article (pay wall - https://www.wsj.com/articles/sapphir...d=hp_lead_pos6 )

TLDR: "United executives have told JPMorgan they believe the Sapphire Reserve card is competing directly with the airline’s cards and siphoning off customer spending, according to people familiar with the matter."
6 more years on the current deal and more than half of the company's cash earnings over the next 5 years will come from the card (why UAL is worried about the attrition).

My take is if they hadn't devalued their own card benefits (boarding, people can buy the same benefits ala carte), United wouldn't have this issue.

Mod edit - archive link of article here: http://archive.is/3oJW4

danpeake

Interesting. Shows you why Citi has had so much reported trouble adding AA to their Thank You Rewards program.

Unless you value the benefits (free bag, priority boarding), there's no reason to have the UA card over the Reserve or Sapphire. And if you're elite, there's no reason to value those benefits.

What shouldn't be overlooked is that Chase is still buying the points when people transfer to United. Be curious if they pay a higher rate for transfer vs. miles earned on the UA card.

And an interesting tidbit I didn't realize: "United also gets a cut of the swipe fees merchants pay when customers use the [United-branded] cards."

Kacee

Yup. The United cards offer poor value after all the devaluations, with possible exception of UC membership (which UA is also devaluing with cuts to the product).

UA management needs to look in the mirror. Consumers are more savvy than they think.
Transfer to UA increasingly makes no sense. The same awards are available for less through other programs, particularly AV, NH, and AP.

PsiFighter37

danpeake

Of course, what UA could do is entice people to redeem miles to MP by making their program more competitive. God forbid they'd look at it that way!

fumje

I have to wonder if Kirby can look at anything without seeing dollar signs.

COSPILOT

Maybe United should focus on being an airline. If Chase is the primary focus, let them rename the airline. "Thank you for flying JPM Chase today. We value the credit card you have used, so much so we have decided to block anything but ours."

jsloan

AV is a Citi ThankYou partner. AeroPlan and ANA are AMEX partners. None are Ultimate Rewards partners. So, you're asking people to change issuers as well. Moving from Chase to Citi might be sensible for some people. AMEX, on the other hand, is a completely different type of product.

I suspect that I may end up using the Chase travel portal more frequently than transferring to UA, as I suspect 1.5 cents per point on a PQD-earning fare is likely to be more attractive than a UA dynamic award, unless I need a top-off.

krazykanuck

How so, to your Amex comment? I do agree with you on your 2nd point though.

fly18725

That's kind of his job. Unless you know of a way to barter customer good will for jet fuel.

findark

I think what has really done this is that we're at a high-water mark for rewards rates on cards, especially premium cards. The pathetic 1-2x UA miles on purchases hasn't changed in a very long time, whereas there has been a constant escalation of per-spend benefits on the 450 card portfolio (Citi and Amex now at 5x in their currencies in major categories). The airline cards haven't kept up, probably because it's unprofitable, and I do think this is just one more domino falling in an eventual rollback of some of the best card benefits.

I love the Chase portal at 1.5 cpp because you don't need to hoard large piles of points on the off-chance your travel patterns and availability will align for a redemption before the next devaluation hits. You can redeem part of a ticket, and it continues to earn qualifying miles for that travel too

Very miffed about Citi killing even 1.25 for TYP and that along with effectively ending 4NF means my Prestige is getting canceled next year.

Amex has always offered a much less lucrative benefit portfolio (at least to the average consumer not doing FT levels of games on the benefits) and focused on offering more intangible services for a fee rather than fungible benefits like the direct travel credits on Citi/Chase. See the airline fee waiver, which was always intended to ease the cost of ancillary fees (because apparently Amex's best customers still fly Y ) and not as the airfare credit it's been manipulated into on FT. Their original business model was earning by people paying money up-front simply for the convenience and prestige of carrying an Amex, and they have given ground on that only grudgingly over the last 40 years.

zymm

This explains a lot of the questions in the MileagePlus survey I took this morning, there was a lot about which program/status benefits I valued and their interaction with credit card benefits. While it would be nice if they redoubled their efforts to increase the value of their miles and benefits based off my feedback that I've switched to AS as my primary airline and the CSR as my primary card I won't be holding my breath....

jsloan

Unless I've missed something, AMEX doesn't offer a Visa or a Mastercard (which are, for the most part, interchangeable). So, you can't necessarily use them everywhere. Also, most AMEX cards are charge cards, not credit cards. That's not necessarily a bad thing -- credit card interest isn't usually a great deal -- but it's still a separate product.

Kacee

I can't agree with this. AMEX cards (particularly Plat and Hilton Aspire) offer a wide range of extremely lucrative benefits.
??? You don't have to fly Y to incur change fees, purchase wifi, or buy award tickets. I get fee waivers from three separate AMEX cards, fly almost exclusively premium cabin, and manage to burn all three waivers on UA every year without playing any games at all (unless you consider purchasing a wifi subscription a "game").
That's no longer true. I have three AMEX credit cards - SPG, DL, Hilton.

1P

United and Chase have only themselves to blame. I applied for the much-vaunted Explorer Card, and my application was declined. I even phoned Chase to find out why and got a non-answer. I then immediately applied for a Chase Sapphire Card — exact same application details as before — and was approved. Go figure.

All of this because Hilton decided to change from Citi Visa to Amex, and I needed a Visa card to use in Europe with no foreign currency transaction charges, because Amex is much less accepted in Europe outside big cities than people would have you beieve. My legacy United Chase Visa card does not have that facility.)