Delta & United Looking To Pre-Sell Miles To Banks

As you say Lucky, not surprising.

But yet another sign that it is best to stay away from the miles credit cards and the miles/points programs more generally.

To clarify by "never a good sign" I think you mean from the perspective as a miles arbitrageur. Ticket prices will most likely be higher in the future to account for changes in the business model - i.e. tickets paid with cash being treated as restricted cash rather than as cash available for internal use.

@ ADP -- I meant "never a good sign" in terms of the financial health of a company. From the perspective of those of us collecting miles, I actually think we'll see a renaissance over the coming months and years, as airlines will hopefully actually use loyalty programs as they were initially intended, to fill seats and make people loyal.

Citi sold miles to AA to stave off bankruptcy (was it after the financial crisis?).

Makes sense for airlines - although it shows they're scraping the bottom of the barrel in terms of what they're borrowing against.

If I was a bank, I'd want a significant discount for buying these miles. Presumably customer behavior is going to be moving away from travel rewards that aren't seen as valuable as they once were.

Hopefully we will see bigger signup bonus on new Chase United cards. Their current offer 100k for $550 United card (with mostly useless features) isn’t worth it. If 150-200k offer then maybe...

For the consumer, this is good, isn't it?
Wasn't because AA sold one billion dollars points to Citi, to avoid bankruptcy, that we saw a great increase in AA credit cards sign-up bonuses and spending categories?

I hope the banks tell them to screw off.

I don't know why anyone would want Delta miles. Instead of extending status, they should have brought value back to Sky Miles:

1) Bring back fixed, award-redemption chart
2) Allow stopover and around-the-world tickets, which fosters aspirational travel and loyalty
3) Allow regional upgrade certificates to be used for economy to premium economy

@Lucky

As you have asked in the other post, this obviously is a cash grab scheme, difference here is dealing with one big entity with a long history and obviously a huge sum of money that makes it worthwhile. In this particular case why it didn't happen sooner in my opinion is there isn't much reason to buy a doubtful airline miles when, as banks, they can loan the same money with collateral. If DL and UA is to get attention of banks, they really really have to sell it cheap.

Depending on the deal size, it will show how desperate airlines are. If they think they can survive there is no reason to pre sell to make less money 5 years from now unless there is no 5 years from now. Likely airlines now think this will last longer than expected so they probably should sell it now since it would look much worse on them trying to raise money few months from now.
I also might be overthinking this (because its very unlikely) but another reason this just came up is DL UA might reject the loan package so there are seeking funding elsewhere.

I do agree with your "renaissance" theory if they come out weak like most of us predicted. But I have to warn all of you if they come out strong only a sneaky quite "devaluation" will happen.

I’d be interested to see how many signups Chase could muster for the new United Club Infinite card—a $525 annual fee for clubs that are closed and 100,000 miles for an airline with very few flights.

If the airlines take government money. You as a tax payer you be on the hook for years. Then the airlines the ticket prices will go thru the roof so it will be a double whammy.

I have a United presidential plus card. It’s a Chase MasterCard. I get free bags for me and three travel companions, free upgrades to economy plus on United flights for me and three people traveling on my itinerary and entrance to the United club. I’ve already canceled two trips since COVID-19 and in May my presidential plus card will be up for renewal. Should II pay $450 to renew this card? I contacted Chase twice in the last month and they said contact them next month. What do you think?

I’m changing my spending and gutting my travel plans indefinitely. Never was a fan of the points game and this is the nail in the coffin.

As such I’m canceling my airline co-branded cards. Along with my CSR which has points bonuses for travel and dining out spending, something I’m not going to do for a while. Replacing these will be low or no fee cards that give cash backs for stuff like gasoline and grocery stores.

@Alan Sells

United presidential plus card is a legacy product means you can't get it anymore.
The biggest benefit for this card that current cards don't have is the ability to earn PQP that can get you up to 1K. So if you never put spend on it and never make it beyond Platinum then cancelling the card might not hurt much. But if you spend your way to status and hope to qualify for 1K, this card should be a keeper.

Calling Chase wouldn't help you until after the fee post to your statement. Please do share if you receive some retention offers.

It seems to me the airlines are their own worst enemy when it comes to this. They have devalued miles to the point they really are not worth it. With very few exceptions, you would be a fool to buy miles or spend on a credit card for whatever pittance they offer.

Hopefully the Airlines, credit card companies will come up with something , that satisfies all, no point in having loads of points, only for airlines to increase these miles for flights ,or upgrades I feel Delta , American Express will come out good(hopefully) as they seems to know what customers like, plus give good value, I feel if they do start with great offers, try not to increase miles needed ( if they don,t should kick start seats not revenue, being kept empty) this will kick start Airlines, plus knock on effect for airports, who in turn , will have to do their part, on reduced fee,s etc,Lets firstly hope everyone stays indoors , or keep away from everyone for next 3 weeks, keep well everyone, One person catching this Virus is one too many x