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- [00:03]
A
I'm Brett Snyder, author of Cranky Flyer.
- [00:05]
B
And I'm Brian Sommers. I write the Airline Observer. You're listening to the Air show, the podcast where we talk about what goes on in the business of the sky. John is somewhere right now, Brett. Do you have any idea where he is?
- [00:17]
A
I do not know where he is, actually.
- [00:20]
B
I think it's safe to say he went somewhere on an airplane. So today, Brett, how about you and I talk about changes United made to its Mileage plus program last week and why they are indicative of broader trends in airline loyalty.
- [00:35]
A
You know how I love talking about loyalty.
- [00:38]
B
I know. Let's talk about something else first, Brett, though, you had another successful Cranky Network Awards last week in Phoenix. I think it was number six. Yes, I think it was the best yet, assuming that we don't count the fact that John and I both had to evacuate the hotel at midnight with our stuff going up the stairs and then back down the stairs and head for other hotels. But seriously, you have quickly created the best conference in the industry. And I hate to say this, you are funny, too.
- [01:10]
A
Go on.
- [01:11]
B
All right, so in addition to the networking that we did in Phoenix, some
- [01:16]
C
business was discussed before we get to
- [01:18]
B
United and loyalty, did you notice any trends or did you pick up on
- [01:23]
C
any insightful information that you can share with our listeners?
- [01:26]
A
Yeah, I think it's safe to say that the main trend I noticed was that people do not like being awakened by a burst water pipe and fire alarms in the middle of the night. I do include myself in that group. However, I would like to point out that nobody had to evacuate, sir. And I just was at the after party late enough that I came back, climbed up some stairs, heaving, just really feeling it, and then collapsed for a couple short hours of sleep before the forecast breakfast. But, yeah, that was definitely the one blemish on great event this year. It all went great. We had, I think, record turnout, which was awesome. And look, the reality, though, is, and we got emails from people afterwards like, well, it makes for a good story to tell. So there we are.
- [02:12]
B
It does make for a good story to tell. But you. You didn't really answer my question, Brett. Any real trends that we learned here at the event?
- [02:19]
A
That's a very real trend, Brian, I'll have you know. But I think this year what we saw in the awards, we saw a lot more partnering going on. In fact, this year we split our, our regular Most Promising New Partnership award into two awards, with one for the US And Canada and another for Latin America. Just because of the volume we had. And even then I had some people barking at me that their partnership wasn't included as a nominee. So there's just a lot of that. And I should note, this is limited to airline or multimodal partnerships. We had JetBlue and Bright Line in there. So it's pretty narrow when you think about general partnerships. Because this week we're going to be talking about financial partnerships, which just keeps becoming more and more essential. Maybe we need to do an award for that one next year.
- [03:06]
B
For me, it's all about the gossip. And you know what insiders like to talk about when they get together. Palace intrigue. Which is to say a big topic was who will be the next CEO of American Airlines? My apologies to Robert Isom. Very nice guy. But the betting money in that room, as it were, would suggest that Isim's seat is very, very hot. I didn't really figure out who his successor might be, though. So perhaps that's a discussion for another time.
- [03:40]
A
Yes, that is a discussion for another time. People love the gossip in private with old friends. The event allows people to do that. It's, it's great. But, you know, we will leave that stuff in the room.
- [03:52]
B
We can leave it in the room. But just to be clear before we move on to United and MileagePlus, not breaking any rules here. This is not an off the record event. You run your event based on Chatham House rule, which means I can say what happened there as long as I don't identify the speaker or say anything that would allow listeners to guess the speaker.
- [04:13]
A
Yes.
- [04:14]
B
I have one more anecdote and I'm going to keep it vague. Brett. All right. I don't want to break any rules.
- [04:19]
A
That's fine. But you know, you can ask for their permission as well if you'd like. So that's always an option for you.
- [04:25]
B
Okay, I won't do that here. But let me tell you what happened. A very senior executive at a very large airline told me that they thought they heard you and me, Brett, having a loud discussion at their headquarters. But when this person went and investigated what was happening, turned out that there were two junior employees at this airline who were making fun of our voices. Brett. They were in the airline headquarters pretending they were you and me. I can only imagine how nasally they made me sound. Or how they made you seem. Maybe like the know it all that you usually are. But I guess it's good news. If you're making fun of us, that means we made it. So if the two of you are out there listening today, just know we know who you are.
- [05:14]
A
We do.
- [05:15]
B
I know who they are, all right? I know where they work. I just can't say where they work based on your rule.
- [05:20]
A
Great. Keep talking about us. Okay? In fact, let's do an impersonation contest. Let's have one on the air here. The winner gets a sub for each of us one week on the show, and we'll see if anybody notices the difference.
- [05:31]
B
Enough small talk. Let's talk about United. It made some major changes last week to how people earn and burn miles. You have not been a member of the program since 1985. Like yours truly, I was three years old at the time. But take us through these changes. What is United doing?
- [05:51]
A
The latest change makes it clear that just being a mileage plus member is irrelevant now unless you also have the credit card. So here's what's happening. Cardholders will now earn more miles when they fly United than those without credit cards. So before this change, which I believe it's April 2nd, it goes into effect, a general member would earn five times the money they spend on plane tickets in points. Now, if you have no credit card, that drops to three times. Or actually, if you buy Basic Economy, it drops to zero. If you have a credit card, it will increase from five times to six times, even on Basic Economy. And then depending what card you have and what level of status you have, then that can rise to as high as 17 times the money you spend. If you are a 1k and have the United Club card specifically, there are many charts you can find online if you want to see exactly where you fall in this matrix. Credit card holders also get a minimum of 10% off award redemptions, with elite members getting at least 15% off. And lastly, cardholders will have access to more award seats. So this is essentially opening up the extra inventory that was only for top tier elites before. It'll now be available to all credit card holders. And one last point here. I know I keep saying credit card holders, but there is also a debit option for those who can't qualify or don't want a credit card. But in short, award redemption is about to get a whole lot more costly unless you have the credit card. So, Brian, why. Why are they doing this? Is. Is this just to make our collective heads explode with complexity, or is it about shaming those who don't get a credit card to force them to do so? What's. What's the deal here, Brett?
- [07:43]
B
I don't want to shock you here at all but this is about money. Oh, United makes really good money off its credit card customers. But here's the thing. It's not as successful at this as Delta. So United doesn't brag as much about the economics of its credit card deal as Delta. But my understanding is that United makes less from its agreement with Chase than Delta earns from American Express. And you know that there's an overall margin gap between the two airlines. And juicing loyalty revenue probably is one way to close that. But let's take a step back and remind people what these economics look like, because they are really great. So loyalty historically has had two parts. The first one, you know, you get people to fly more, so you give them miles, they keep coming back. And then the second thing, get people to sign up for those credit cards. And that is increasingly where the big money comes. So some quick thoughts on that first part. You know, I know that some people say that the old loyalty is dead because lower tier customers are going to earn fewer miles. In some cases, they'll earn no miles. And even if you're a good customer, you're not getting those free upgrades anymore. But I'm not sure that that's true. I actually think that airlines are competing for loyalty based on product. Now, you hear Scott Kirby talk about creating brand loyal customers. And so like in the old way, you would give people a crappy product and then something would go wrong on the flight and what would they do? They would just shower you with miles to make all the bad go away. But now the product is better for everyone. So you get the free snacks and the inflight TV on some airlines, the free WI fi on United, you have
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C
that great app and you have a
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B
bunch of choices for all the seats you can buy so you can get what you want from for each trip. So that loyalty, I think is still there.
- [09:39]
C
But look, there's no doubt that the card program is more important than ever. And we know that airlines make a lot of money on these things. As I understand it, there's three different ways that an airline, United in this case, is going to make money on its card program. One, they get paid every time a customer signs up. Interestingly, for some people, some of you already know this, but also the flight attendants get paid a little bit as well, which is why they're so excited when they get on the PA and they tell you that there's only an offer for that flight. Two, airlines generally get a slice of the annual fee. And then three, as customers pay for more things with the card and they rack up more miles. The banks, in this case Chase, have to pay United for those miles. And I'm told that they pay a lot of money for those miles. Maybe a penny and a half a mile. Rough math. Maybe a little bit more. We know that there are expenses for these programs. Airlines need to give up inventory for free flights, and then there's those people that redeem for stuff like iPads or rental cars or hotel points. But look, there's no doubt about it. These card programs are very lucrative. Probably. Definitely more profitable than selling seats on airplanes.
- [10:53]
A
Yeah, of course. You need to have the seats or people won't have your credit card.
- [10:57]
B
That is the Doug Parker argument, which I agree with, of course.
- [11:00]
A
Well, you need to have seats.
- [11:02]
B
You cannot decouple the loyalty program program from the airline.
- [11:05]
A
I get that. Yeah, you can't do that. But also, I get what you're saying about loyalty with the, you know, the product being better. But that still doesn't change the fact that the basic old loyalty program is dead with these types of changes, because that it. It's not the points anymore because they're not really worth nearly as much. And they're going to be worth even less now with this as my guess, unless you also have that credit card. Like, for me, as a traveler, I've hated these changes over time. Not just this one specifically, but it's because I'm not a road warrior. I'm not on the road nearly as much as you and John are, and I don't want to be. I also, I will never be a top tier elite.
- [11:47]
B
But, Brett, you are an Atmos Silver member.
- [11:50]
A
I said top tier elite.
- [11:52]
B
You get upgraded 10% of the time. According to Brett Catlin, VP of loyalty at Alaska Airlines.
- [11:58]
A
I haven't flown them yet. I don't. I don't even have anything booked on Alaska this year. That's how great my elite status is. I will be booking something soon. But anyway, look, for someone like me, the idea of loyalty was that you gave people a goal to shoot for. Like, I want to get enough points to take my family to Hawaii, or I want to do this, I want to do that. That ship sailed long ago with variable pricing. You just never know what the goal is if you're a traveler. So instead, you just get stuck in this program trying to get more and more points that you hope you'll be able to redeem. Maybe. But also better chance they'll just be devalued at any time. People say crypto is risky. Welcome to airline loyalty like this stuff is, it has no intrinsic value anymore because it bounces around all over the place. And the airlines used to care about this, but it changed when they saw how much money they can make with credit cards. You hook that into the loyalty game and that's what really provided the spark. I get it. You know, the goal is and always has been maximize revenue. And so that's what this is doing. And, and that, I guess, creates loyal travelers, but that's sort of a secondary benefit. It's more just how do we maximize revenue. So if we've abandoned the idea that loyalty to an airline makes a difference for points, we might as well just go into this, the full idea. These are financial companies that happen to fly airplanes. They, it goes together. They have to. But in that world, of course, United, to make a move like this, the credit cards provide the airlines with the best margins. They no longer care if you're loyal unless you're also contributing to those hefty margins with a card. This really cements that, because you could be someone that doesn't have the credit card and they are telling you you are not important enough, even if you fly a million miles a year, which is impossible.
- [13:49]
B
I suppose so. But the vast majority of people that fly that airline often also have the credit card. That's kind of how it works. You get into the ecosystem, you want to earn more and more points. To me, this is one of the least surprising moves United has made in a while. And I spoke last week to Jill Adams Doyle, a managing director of the Mileage plus program, and she told me, quote, this is a way for us to continue to invest in customers that have chosen to invest in us. But isn't that exactly what United is doing here, Brett, like this is pretty simple stuff. Adams Doyle said that customer lifetime value is higher among people who have the card.
- [14:33]
A
God, that, that talking point is surprisingly blunt and truthful. I think it lays it right out there. What have you done for us lately?
- [14:43]
B
Oh, as one of my favorite people in the airline world tells me sometimes, this is not a charity, Brett. This is a for profit business. I mean, of course they're doing this. And look, I know that United wants to be special and first and innovative and would never want to copy American Airlines. But I would argue this isn't that much different than what Vasu Raja did when he was American's Chief Commercial officer. People may remember that Americans switched to what it calls loyalty points in 2022, and that's for elite status qualifications. But the idea on American was The more you spend on the card, the easier it is to climb the elite tiers. United's move here is more about award miles, but the idea is the same. You give more to your best customers, and those are card customers. I wouldn't be surprised if at some point we see elite program changes at United that roughly match Americans. But that wasn't part of this announcement. You can still earn elite status by spending on credit cards on United, but it's not nearly as easy as it is with American.
- [15:54]
A
Yeah. And at least for now, United still requires you to actually fly on an airplane. I believe you have to have four flights, right?
- [16:01]
B
Yeah.
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A
Whereas American, you do not. This just gets to that point. Like this. It requires admitting that the best customer isn't someone who flies on airplanes. They can fly on airplanes, but it's not required. Get the card, spend a lot of money. United loves you. They don't care if you get on the plane. They. They'd love to get rid of all that cost if they could. They. I think they know that it doesn't work that way. But. But that's what we've. Airlines like American with loyalty points where the flying component doesn't matter at all anymore. And in this case, it does matter, but only if you also have the credit card. I think American solution under Vasu is actually a little more elegant, but United's is more blunt and it will probably drive more people to do the thing that United wants them to do. There's definitely a stick approach here. I guess it's a carrot and a stick, but it's. If you have the credit card, here's your carrot. If you don't, here's a stick to beat you with.
- [16:55]
B
Brett, is it possible that that was the first time anybody has ever used the words Vasu and elegant in the same sentence?
- [17:04]
A
Oh, he's a very elegant man. I don't know what you're talking about.
- [17:07]
B
He is very well dressed. But some of his decisions at American were not known to be the most elegant.
- [17:13]
A
The implementation was maybe not usually the most elegant. So that is a fair point.
- [17:19]
B
All right, here's a fun fact for you, Brett, about United. Adams Doyle told me that the airline and dices their mileage plus customers into about 10 buckets based on how they interact with the airline. I've been flying this airline a long time. Little less than I used to, but I still do. Do you know which bucket I am in at United?
- [17:42]
A
Let's see. Blood sucking mileage gamer. Is that, Is that one of the buckets I Need to know what I'm working with here.
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B
Did you say earlier that people liked your jokes?
- [17:51]
A
I am told that people did indeed like my jokes. I guess the ones who didn't won't tell me that.
- [17:57]
B
No, I like your jokes, too. Most of the time, not so much there. But anyways, I am something called a miles maximizer in United parlance. I asked if that was a bad thing because I'm pretty much trying to beat United on every transaction. So I know roughly what United gets paid by Chase per mile, and I want to do better than that. Quite a bit better if I can. But Adams Doyle said no. She said a miles maximizer is, quote, somebody that really wants to engage with us and find value in the miles. I joked with her that I was going to try to bankrupt United by getting like, an absurd number of miles per dollar. But Adams Doyle was like, you know, have at it as you would expect with any Scott Kirby run airline. They have modeled the heck out of this. And it sounds like United is still going to win. You know, kind of like a casino.
- [18:50]
A
The house always wins.
- [18:52]
B
Exactly. And just one more Adams Doyle quote. She said, you know, she wouldn't even call it arbitrage. It's just rewarding customers for showing us value. To me, this is kind of interesting because it echoes what Chief Commercial Officer Andrew Nisella has been saying for a while on these earnings calls. I know that a lot of us in the miles and points community, God, I just. I just outed myself as being part of this community, which is embarrassing.
- [19:18]
A
I think you've been outed for a while, sir.
- [19:20]
B
Okay. But there's some concern that United is going to massively devalue its miles as it tries to match Delta. It's something that's possible, but Nacella has also made it pretty clear that the gamification of awards can be pretty good for business because it gets people excited about earning miles. So he said on a recent earnings call that he believes that there's only two to four real loyalty programs in the United States where everything else is what he called a reward program. And these loyalty programs are the ones that offer outsized value. So I'd say that they're three. I think he was being generous.
- [20:00]
C
I'm going to go with Alaska, United and American.
- [20:04]
A
Not Costco. Or was he specifically talking about airlines?
- [20:08]
B
I think he was specifically talking about airlines.
- [20:11]
A
All right, well, fair enough. But look, I think, you know, other airlines are all making moves. We'll see where that ends up. It also depends where you live. I mean, this is part of why I'm so sour on loyalty is because where we live here in Southern California, I can fly any airline I want and I have a lot of options. But otherwise I'm probably jumping into this game and getting as much as I can if I'm in a place where I don't really have a choice, but. So you're a miles maximizer. I definitely am not in that category. I don't know what the categories are, but if there's one called Irrelevant General Member, I think that's my grouping. But I would wear that with a badge of honor. I would say, honestly, I'm amazed at how airlines have been able to suck people into this world as well as they have when most people are probably better off with a 2% cash back credit card. That's the reality. Not you, you're a maximizer. But most people who, who are in this game, they probably are. And I do wonder what kind of impact this has on those who haven't given to the, the tyranny of the card yet. Like do they give in or, and, and just, you know, get the card or do they suck it up and, and just take the hit or do they say, forget it, this is ridiculous. And I go elsewhere. I mean, I guess we've seen this time and time again. Nobody ever goes elsewhere. That's why airlines keep doing this stuff.
- [21:31]
B
Yeah, it's been crazy how popular these airlines credit cards have been and it's been going on for a pretty long time at this point. And you know, you ask airline people why they have such a big pull, we kind of compare it sometimes to the Apple credit card, which, which really didn't work. And Apple is a much loved company and people love their stuff. But there's something about free travel that has gotten people jazzed. And when I talked to Adams Doyle about this, she'd clearly prepared a lot for the interview, which I, and I gave her a hard time because I think she said Tahiti three times in the interview. And then her two other examples were Rome and I think Hawaii. Right. And people like, they're not really thinking rationally. They're not thinking, oh, 2% cash back would get me to these places a lot sooner. They're thinking about that United flight to Tahiti and if they could just get enough miles, it's going to work for them.
- [22:28]
A
Yeah, because people are always planning a trip too.
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B
I thought they were planning five at the same time. Is that, is that rare?
- [22:34]
A
I mean, it's probably not that rare, honestly, But I'm comparing it to Apple where like, how often do you buy a computer or a phone or maybe some people buy one every year, but it's not the same thing. I feel like a lot of people are actively dreaming and hoping for a trip if not actively planning it directly. It's always top of mind. So I think that's probably part of it. But yeah, airlines have. It's been pretty amazing actually how they've been able to get traction here.
- [23:03]
B
Yeah. You also asked about people at the bottom of the funnel, people who might be buying basic economy and perhaps don't even have the credit card at all, and how they're going to get zero miles. Could they defect to another airline? They certainly could. But I think that goes back to what we said earlier, that the United onboard experience is so much better than say, a Frontier, that you still get the app, the screenshot, the snacks, free WI fi. As long as you're just a member of MileagePlus, it's clearly a better experience than Frontier. And also, I don't even know what a Frontier mile is worth. So fine. Frontier gives you miles. Are those really that great? Anyways, I also think that United has been pretty thoughtful about this. So you also mentioned United is including its debit card here. If you have that, you get better treatment. People who are familiar with our regulations in the United States know that debit cards are actually very not profitable because the government capped interchange fees on those and the rates are very low. So the idea there for rewarding people for having a debit card isn't necessarily the debit card itself. It's the idea that if people are willing to get in what you might call the card funnel, they could move up the ranks and they'll get the lowest level credit card. And then someday they're in the United Club for like, you know, $795 a year or whatever they're charging.
- [24:27]
A
It's just like Delta says, they love their basic economy passengers because eventually they'll be in flatbeds, like when they get money or something like that. I don't think people are going to flock to Frontier because of this. If they're buying basic economy, the earning points is not their primary concern here. It's just about making something cheap.
- [24:44]
B
Plus, you know, United seats have actual padding, even in economy class.
- [24:49]
A
Sure. But you know, if you're going transcon, that's an issue. If it's a short haul, most people can survive. I know you had a struggle to Phoenix last year.
- [24:56]
B
My toch has spread.
- [24:58]
A
But this is where people can look at other airlines that may have more similar products. In la, we certainly can. In Chicago, they can. In New York, they can. Maybe not the case in Houston, who knows? The point is there are places with multiple options. There are places that don't have it, and that will absolutely have an impact here. But what about the other airlines? Even JetBlue, right through blue sky, they have this partnership. I haven't. I don't know if that's any better, but maybe some people decide to go that way and still fly United. Actually, what do we do? We know how United's airline partners feel about all this.
- [25:33]
B
Well, I haven't asked about this particular move, Brett, but I can tell you that some of United's frequent flyer program partners have been maybe frustrated with mileageplus in recent years. And let me try to summarize what has happened. Certain programs out there, programs that I historically love to use to book United flights, were undercutting United's pricing on awards. So I'm just making this up here, but it happened a lot. United might price a domestic flight for, say, 15,000 miles, but you could just go to Turkish or Aeroplan and they would have the same flight for half of that. So in the old days, it's like, what's the big deal? Because the people who were redeeming on Turkish and Aeroplan were customers of Turkish and Air Canada. They just flew those airlines a lot. And maybe they were visiting the US and so they would go to turkish.com and they would take their free flight and they would get their little reward. But then all these foreign airlines got into the US Credit card game, or almost all of them. And that's not great for United because it wants every Star alliance customer in the United States to have its card, not Aeroplan's card. So I have heard that United has dealt with this in at least two ways. First, it has strongly urged partners to consider price parity, which is something that I'm seeing when I book tickets. Air Canada seems to be pretty close to United in pricing. And then this release makes it pretty clear that United is going to save the best seats for its own credit card customers. So for all of my fellow lovers of the Avianca Life Miles program, I'm sad to say it's going to be virtually impossible to find a premium seat on United using those miles. Luckily, Brett, I have spent nearly all of the 200,000 life miles I bought in 2024 during a very weak moment.
- [27:47]
A
Well, I think we can all rest easy now. It seems to me that it's not the people getting the Air Canada credit card in the US that's the biggest issue. The biggest issue is the people that are getting the bank cards. Right? And then you can just transfer in and this starts getting really sticky and crazy because. So United, that's through Chase, Chase obviously makes a bunch of money on these United cards, but it also has its own program. It has Sapphire Preferred, Sapphire Reserve. It has the ultimate rewards that you can then transfer to the airlines that are competing with United and potentially undercutting them. So they're competitors to the United card and they're feeding other competitors. This is a tangled web, man. This. I don't know how they keep this straight.
- [28:28]
B
It is so weird, Brett, and you're exactly right. I think the consensus among airlines is that at some point in the last five to 10 years, the bank programs, the ones that you talk about, Chase, City, Capital One, got too good. And I know that there are probably people who don't spend a lot of money, who are probably mad at United for gutting their earning potential. But there are also some big spenders who say it's good that United is finally rewarding its best customers, because in recent years, you know, people could earn a lot more United miles, as you say, by using a Chase branded card than an actual United card. And it's taken a long time for airlines to react to this dynamic. I think they knew it was happening, but it's taken them a while to change the attributes that their credit cards offer to be more competitive. And I think that this United announcement is part of that. For so long, airlines really thought that all they needed for their own card programs was maybe a free bag, priority boarding, priority check in, maybe some lounge access. That has been the status quo for a while, and now we need to see a little bit more with co brand cards to make them competitive. I am doing this from a hotel room in Washington, D.C. brett. I bought a very expensive ticket on United to get here, but of course, this was before April 2nd. So I did not use my United credit card because why would I? They have been insulting me with points earning, so I use my Chase card. Do you know how many points Chase gave me for booking a United ticket through its portal?
- [30:19]
A
Somewhere between zero and 17 times your spend.
- [30:23]
B
Oh, you're a smart guy. It's eight times the points, Brett, just from the credit card spend. And then United still treats the ticket exactly the same as if I used their credit card. So that nets me another Eight points per dollar because I'm a gold member. Sixteen times the points, baby. So I'm pretty excited about that. But of course, after April 2nd, I'm gonna have to make a new calculation and I might have to go back to using the United card to buy United tickets, which is probably something that United should have wanted me to do all along.
- [31:00]
A
Yeah, probably. But it's so complicated. I mean, there's so much math here going on.
- [31:06]
B
You love your math.
- [31:08]
A
I know, I listen. I mean, there's now all these different charts you can look at and you have to figure out, well, what credit card should I get? And then what status do I have or will I have? And it all just is. It's so much. But do you think United is done now? Because you're much more plugged into this loyalty world at United, way more than I am. Of course. But United did just clean house at the top of the Mileage plus food chain, right? Richard Nunn and Luke Bondar both being shown the door. So was there friction based on where United seems to be going or is there more coming? What do we know?
- [31:48]
B
Oh, there's definitely more to come. That's been clear from the top for a while. CFO Mike Leskonen has gone on these earnings calls and he calls the Mileage plus program the crown jewel of the company. Kirby talks about it a lot and I hear from people inside the company that Nacella and Kirby have very high standards for the Mileage plus program. So you mentioned that Nunn and Bondar who had been running the program are leaving. They're not public figures, so I don't need to talk about too much about why they are leaving. But I will say that this guy, Jared Fisher became available. He's the new head of the Mileage Company plus program. Fisher had previously worked at Apple and Delta helping them design their co brand programs. And I don't think that he's the type of person that you hire to run a program if everything is going to be status quo. And I suspect that United is going to take some attempts to try to do something with this program. So it is innovative and it doesn't look like the next iteration of every program we've seen come before it. I don't know how they're going to do it, but I'm watching carefully.
- [33:02]
A
All right, well, if you say so. Because for me this is all just exhausting and I think it's why people have such a love hate relationship with them. You know, these devaluations, massive program shifts it's all just the norm and maybe it's just the tip of the iceberg. This time there's going to be a lot more coming. But I mean now the shift is if you don't have the credit card, you are a second class citizen at best. And honestly I can understand why the government has made some noise about trying to cut down this house of cards, pardon the pun there.
- [33:36]
B
Oh, if that happens, it's gonna force so many changes in the airline industry, it's gonna be ridiculous. But I don't see the appetite for it yet. We're just gonna have to see how that one goes.
- [33:47]
A
No, I don't think it's necessarily the right thing. I mean, in a sense it is subsidizing airfare for anyone who's buying airfare. But they something that is certainly vulnerable if the government decided to do something about it. It's certainly not this administration, although I say that. And just recently there was that random stray bullet of Maybe we'll have 10% cap on interest. So who knows on any given day what might happen?
- [34:12]
B
Yeah, we talked about that for about 18 hours in the industry and then people have forgotten it.
- [34:16]
A
Well, I think it's probably because the card issuers, the banks, all these guys, they're too powerful. They probably made some calls and got it killed immediately and, and made the president move on to something else, I guess.
- [34:25]
B
Yeah, I think that the. I hate to say it, but the next thing that we can look forward to here with United could be another devaluation. Can't tell you when it's going to happen. It's illegal for them to tell me when it's going to happen because it's future pricing. I don't have anything bad to say about United here. This is what programs do all the time. And you talked earlier about the math of these programs. If you're giving 17 times the points to your best customers and then you're still giving them 15% off the price of redemption. It would seem likely that at some point you would have to raise the price, the regular price, to fly to Europe in business class, from 80,000 miles to something higher. So let that be a lesson to you all. Do not hoard your miles.
- [35:18]
A
You've been listening to the air show. If you have suggestions or questions for us, or if you're interested in sponsoring the podcast, go to our website theairshowpodcast.com to get in touch.
- [35:29]
B
Leo Duran produced and edited this episode. Our theme music is by Joshua Mosher. Thanks for listening and we'll be back soon.