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. 7 filing with a U.S. Bankruptcy Court. The bank buys frequent-flyer miles from United from time to time, which are later transferred to cardholders’ accounts as they make purchases with the bank’s Mileage Plus affinity card.



The cash provided from J. P. Morgan Chase’s splurge on miles will be used to initially fund the reserve required by Paymentech Inc., a credit-card processor that it controls. The deal’s terms were not disclosed.



“This is using the people who use the United credit card as a source of financing,” says turnaround expert William Brandt, CEO of Chicago’s Development Specialists Inc.

The article notes that Delta’s new credit card processing agreement will require reserves of $600 million to $850 million. Continental, meanwhile, may have to post an additional $370 million to its credit card processor if its credit rating slips.

United is putting up miles instead.

This morning I started reading the blog of an Air Canada Aeroplan member who has booked flights to earn one million miles in 60 days. He’s earned 135,000 miles after his first week.

The America West-USAirways frequent flyer program merger is making progress. You can now earn and burn each airline’s miles on the other carrier.

As summarized by the MilesLink newsletter:

The programs are merging into a single “Dividend Miles” program, bringing some changes.


For starters, a new four-tiered elite program will be implemented in both programs.


The entry-level elite threshold will be set at 25,000 miles. Benefits include a 25-percent earning bonus, unlimited upgrades on full fares confirmable anytime, and unlimited upgrades on discounted fares confirmable up to two days in advance.


Higher tier thresholds have been set at 50,000, 75,000 and 100,000 miles. America West Platinum Elite members will be elevated to Chairman’s Elite status by Feb. 28, 2006.


Lower-level awards (FlightFund’s 15,000-mile short-hop and Dividend Miles 20,000-mile coach saver) are history. All awards will begin at 25,000 miles.


The Saturday-night stay requirement for Dividend Miles award travel will be discontinued.


A 500-mile bonus for booking online at either airline’s Web site.

Following up on last month’s 35% bonus, American Express is offering a 30% bonus for transfers of Membership Rewards points into Delta miles through November 30. Registration is required.

Roughly speaking, American has matched the British Airways offer of earning 50,000 miles on a business class ticket to Europe.

United — and possibly other carriers — can’t be far behind, especially as this is more or less a redux of an offer from last year.

There’s a decent article on getting the best prices for hotels up over at everything2.com.

Don’t believe every claim 100%, but many of the general broad brushes are correct. Best Rate Guarantees notwithstanding, you often won’t get the best price possible for a room by booking on the internet or calling a chain’s 800 number. A hotel’s in-house reservations or revenue manager can certainly often provide a better deal.

You usually won’t do better that way than on Priceline, contrary to what the article suggests, and the techniques involved are tedious and time-consuming… but there’s little downside, especially in just realizing that while some chains offer discounts to members of their loyalty programs, that’s not where to start when dealing directly with a hotel that sees the program as a tax rather than a benefit.

A better discussion of using corporate rates can be found on Flyertalk than is offered in the article, however.