Sensible. Aggressive. Creative. That’s how we would describe Luc Bondar’s first moves as the new head of loyalty at United Airlines.
On Friday, Bondar launched a re-vamped United Explorer Card, the airline’s co-branded Chase credit card. But far from a run-of-the-mill upgrade, Bondar has re-tooled the rewards portfolio significantly to bring more value to their general customer base. We’ll talk about the specific changes in a moment but what strikes us as significant is that Mr. Bondar’s data appears to indicate that addressing value propositions for the “general” customer strata will yield more return than focusing on their elite customers.
Taken in the context of what United Airlines was in the midst of when he stepped into the role*, Bondar’s first moves would surely have been designed to create expectations – both for the airline and for himself, personally.
*On November 1 of last year, the day he started, United announced it would increase the price of many award seat tiers as well as adjust pricing on various routes. The immediate effect was a very vocal outcry from their members.
United’s MileagePlus Club Card had been designed to compete with other premium cards such as the Chase Sapphire Reserve and the American Express Platinum. But the United Explorer Card had languished as it had become overshadowed in recent years by more aggressive benefit packages. To counter that, Bondar and company created a portfolio of benefits that is squarely aimed at their mid-tier flyer.
They include:
- Double miles on hotel and restaurant purchases
- Up to $100 in Global Entry or TSA Pre-Check statement credit
- 25 percent awards on in-flight purchases placed on the card
- The $95-a-year card will also come with a 40,000-mile sign-up bonus if customers spend $2,000 in the first three months.
On the other hand, the card has cut back on certain other services that were found to be of less value to these particular tiers. According to NerdWallet, the Explorer Card trip cancellation coverage dropped from $10,000 to $1,500 per trip and now offers no price protection benefit whatsoever.
According to Bondar, “What we found was that less than half of a percent of the total portfolio – of the total number of cardholders – was actually getting value from price protection and trip cancellation.”
The announcement was well-timed for both United and for JPMorgan Chase & Co. as United executives have openly complained to investors that the company’s co-brand credit card had fallen behind those of competitors American Airlines Group Inc. and Delta Air Lines Inc.
