Tag Archives for mileage plus.
Mileage Plus founder Steve Grosvald writes in the comments of a post on the launch of American AAdvantage about the speed at which United built and rolled out it frequent flyer program i 1981.
Yesterday United Airlines removed partner award charts from its website. The only reason a loyalty program removes award charts is so that they can raise the price of awards while trying to hide what they’re doing. I have never seen a program eliminate award charts and become more valuable.
We now know exactly why United pulled these charts yesterday without any notice to members. Seriously, they’re doing this now?
United’s Mileage Plus is such an important economic engine that JP Morgan Chase, which issues United’s co-branded credit card, has been the largest funder of the airline’s bankruptcy. It’s BankOne unit put up hundreds of millions of dollars in debtor-in-possession financing and JP Morgan is putting up a chunk of United’s $3 billion in bankruptcy exit financing. Now a deal to extend the co-branding relationship together with a large pre-purchase of airline miles is taking the place of hundreds of millions of dollars in reserves that United would have to post to its credit card processor (which is majority-owned by JP Morgan). As part of a deal extending United’s co-branding relationship with J. P. Morgan Chase through 2012, the bank agreed to make a “substantial” advance purchase of miles from United, according to an Oct.…
David Rowell looks at Air Canada’s successful public offering of its Aeroplan program, and wonders why United hasn’t gone public with Mileage Plus? Rowell thinks Mileage Plus could be worth $15 billion. That seems a little high to me, I’m also not sure that imputing similar per-member value makes sense. My hunch is that US consumers participate in more frequent flyer programs than Canadian consumers do, so Mileage Plus while valuable may occupy less mindspace than Aeroplan. I’d personally believe a $5 billion market value estimate rather than $15 billion, but what do I know? Either way, it doesn’t change David’s central point that United has a hugely valuable hiddle asset. Contra David, who believes United should sell a large stake in its frequent flyer program to exit bankruptcy and pay back creditors and the…
Randy Petersen believes that United’s Mileage Plus is worth $2.4 to $2.7 billion and that a public offering could lie in the future.
Back in November I explained why mileage award prices will go up, now and in the future, because there are simply too many miles chasing too few seats. This new piece (originally in the Boston Globe and then syndicated) outlines the current state of the phenomenon. Frequent-flier miles are easier to come by as airlines sell more miles to partners like credit card companies and hotels, but they’re harder than ever to redeem. Behind-the-scenes deals with corporate partners are helping cash-strapped airlines rake in millions of dollars at a time when high fuel costs and lower fares are killing their bottom lines. At the same time, these deals give companies that buy miles a sought-after incentive to offer their customers. But frequent-flier club members shouldn’t think all the freebie miles they’ve racked up will add…
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
