United Airlines Holdings Incorporated announced that they’d renewed their prolonged credit card partnership with JPMorgan Chase. This partnership will continue until 2029, which follows after months of negotiations. United Airlines was provided with an additional $400 million in credit under this revised contract, with the amended pact having to go through the regulatory provisions before funds can be initiated. United Airlines haven’t provided any additional details regarding this agreement.
The president and chief executive officer for United Airlines have persistently worked towards revamping this contract. It’s remained a significant priority for Scott Kirby, who won’t begin his CEO duties until May 2020. These negotiations were held primarily between Scott Kirby and Andrew Nocella, the chief commercial officer for United Airlines. It should be noted that the American Airlines Group assisted with these negotiations, with additional collaborators including Barclays PLC and Citigroup Inc.
Scott Kirby has increasingly been more vocal regarding his desire to create a new contract with JPMorgan. This desire became exponential after Delta Air Lines signed an agreement with American Express, allowing for them to receive an incredible extension in credit financing. United Airlines knew they would need increased funds to compete with Delta Airlines. It should be noted that United Airlines holds additional contracts with Visa and Chase Bank, containing more than $1 billion in available credit. The extension with JPMorgan enables for their credit portfolio to drastically improve, allowing for increased funds towards a new fleet of aeroplanes. Details regarding this fleet haven’t been provided.
The Stock Increases
United Airlines saw their stocks rise by 2.6% over the weekend, increasing their valuation to $80.05 per share. This increase follows after United has experienced an 11% decrease in stock valuation throughout January and February, which was expected with the associated flight cancellations with the COVID-19 epidemic.
Their recent stock increase doesn’t come from the newly formed agreement but instead from a specialized sign-up bonus, which will correlate with the four credit card firms that work with United Airlines. These credit firms will introduce new cards that provide flyer miles, with business executives and small-business owners being targeted. Considering these are the people that invest, it saw an immediate rise for the stock’s valuations.