United Continental (UAL) is trying to squeeze more money out of JPMorgan Chase (JPM) with a makeover of their deal offering co-branded credit cards, according to The Wall Street Journal.
United President J. Scott Kirby reportedly said that he believes the renegotiation “will get to, ultimately, a much better result,” suggesting that the existing partnership is a “disadvantage” for United.
JPMorgan launched its own Chase Sapphire Reserve card just over a year ago, in a move which appeared aimed at much the same people that United traditionally targets. United is one of the bank’s biggest co-brand card relationships, and will hope to use its leverage to extract better terms at the bank’s expense. It’s not clear how much any renegotiation will benefit customers.
JPMorgan has been issuing United credit cards since the late ‘80s, last extending their partnership in 2015. The length of the extension was not announced at that time, but the Journal notes that the bank said its co-brand agreements “generally range from three to ten years.”
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Even though the extension came only two years ago, contracts of this kind “can allow a partner to renegotiate terms if they put it at a competitive disadvantage,” notes the Journal. With low-cost carriers flooding the scene and higher overhead in some areas, United is facing increased competition. The airline hopes that renegotiating its partnership with JPMorgan is one way to increase profitability.