United May Still Lag Delta, American on Loyalty Revenue Even After New Credit Card Deal
Photo Credit: United Airlines has struck a new deal with JP Morgan Chase. Through at least 2029, many Chase customers can earn United MileagePlus miles they can use toward perks like upgrades to the business class cabin pictured here. United Airlines
Skift Take
United President Scott Kirby has a reputation for being a skilled negotiator. But because of a mistake by previous management, he had little leverage with JP Morgan Chase. That makes for tough contract renewal talks.
When the first airlines launched loyalty programs almost 40 years ago, they intended to do what you would expect — to keep customers from defecting to the competition. But over the past two decades, many programs have become independent business segments that generate massive cash for the corporate parent through agreements with banks that market co-branded credit cards.
United Airlines, after its merger with Continental Airlines, may not have seen the trend coming as clearly as other U.S. carriers. Just before Scott Kirby, then president of American Airlines, negotiated one of most lucrative credit card contracts ever, with Barclays and Citibank in 2016, United signed a long-term agreement with J.P. Morgan Chase. Airlines and banks never release terms, but within a few years United admitted it had fallen behind on credit card revenue. Joseph DeNardi, an analyst with Stifel, called the old deal "a well-below market contract," and when Kirby became United's president in 2016, he co
