United Airlines has had relationships with JPMorgan Chase and Expedia Group for years, but on Wednesday the airline’s executives suggested both companies may need to improve their offers to maintain the carrier’s business.
Simply put, it’s not 2009 anymore. Then, with airlines facing higher fuel costs and a recession, they would take cash anywhere they could find it, often by accepting mediocre deals with credit card issuers and online travel agencies.
After consolidation, and with a healthier economy, U.S. carriers are strong now. They consistently make money. In the first quarter, even as it wrestled with operational challenges, including the Boeing 737 Max grounding, United reported net income of $292 million, roughly double compared to last year.
Now, it can be more aggressive with its partners. On the credit card side, executives have been negotiating with JPMorgan Chase on a new contract, asking for terms as generous as Delta Air Lines received earlier this month from American Express. The United relationship is important to Chase, and eventually, the airline likely will get its own rich deal.
Expedia is another matter.
In February, United said it has been unable to reach a new agreement with the online travel agency, and on Wednesday executives confirmed they plan to pull their flights from the group’s consumer sites by Sept. 30. United executives said Expedia no longer provides enough value, given its cost.
“This is time to change,” said Andrew Nocella, United’s chief commercial officer, on the airline’s first quarter conference call. “Companies need to evolve and innovate, and we here at United changed a lot. We have invested in our own website and our app and continue to develop much more cost-effective and transparent and optimal sales abilities to distribute our content.”
As with Chase, United could be trying to force better terms from Expedia. But this could also be real, with United ready to have a closer relationship with customers.