Scotia Bank United Mileage Plus CC; 2nd quarter 2012????

Discussion in 'Air Canada | Aeroplan' started by Wawa, Apr 16, 2011.  |  Print Topic

  1. Okay, now that AP has raised redemption fees to be more in line with competition(collusion) and United MP will be bulked up at the end of 2011 as the largest airline FF program; I think UA will be ballsy enough to step into their friendly colluded *A Canadian market to take their share. Since AP's non transparent surcharges are creating so much dissonance with customers, the new United would likely have the rest of the savvy travellers ready to jump onboard. The question is which financial institution would partner. Scotia Bank without a major co-branded airline card yet, may be a potential partner...but is a Canadian oligarchical bank agile enough to realize the potential value. My bet would be a Canadian version of the UA Chase card will appear. Lower odds go to American Express, as an outside contender. Canadian travellers would dump AP pretty quickly to avoid hefty $200 + surcharges.....or ....AP would start competing. As a separately owned co. AP may have to ask itself some questions to keep its position in any case....the AP flight surcharges can't go on forever since the toaster buying rubes will eventually wise up....or will they???? We'll find out in a year....???
     
  2. milchap
    Original Member

    milchap Gold Member

    Messages:
    27,668
    Likes Received:
    148,085
    Status Points:
    20,020
    Wawa: Welcome to the forum. :)
     
  3. ACMM
    Original Member

    ACMM Gold Member

    Messages:
    25,791
    Likes Received:
    113,120
    Status Points:
    20,020
    Interesting comments. Thanks for sharing your thoughts and I join milchap in welcoming you to the AC forum.
     
  4. ACMM
    Original Member

    ACMM Gold Member

    Messages:
    25,791
    Likes Received:
    113,120
    Status Points:
    20,020
    Question here - and it may be a dumb one - would there be any regulations against a CDN entity partnering up in the fashion you mention with a US airline?

    Not really sure I can see AE worrying about competing. I think there is likely a large number of AE members who rarely use their AE miles for flights, but rather merchandise, and other such. AE is probably happy with that; as has been mentioned elsewhere, AE is more a reward initiative now than a frequent-flyer initiative.
     
  5. chaptwo
    Original Member

    chaptwo Silver Member

    Messages:
    16
    Likes Received:
    18
    Status Points:
    155
    I don't think regulations would be a problem since TD has an AA branded card..unless they did so under the pretense that they have an American bank operation as well..
     
  6. jarusoba
    Original Member

    jarusoba Silver Member

    Messages:
    106
    Likes Received:
    38
    Status Points:
    245
    I think TD has an AA Visa card.
     
  7. WOW this would be amazing I have always wondered why UA has not had a Canadian CC.
     
  8. global_happy_traveller
    Original Member

    global_happy_traveller Silver Member

    Messages:
    1,046
    Likes Received:
    1,404
    Status Points:
    945
    isnt AP a UK company?
     
  9. ACMM
    Original Member

    ACMM Gold Member

    Messages:
    25,791
    Likes Received:
    113,120
    Status Points:
    20,020
    I do not think so. I think you may be thinking of Nectar which is owned by Groupe Aeroplan. Groupe Aeroplan also owns Aeroplan.
     
  10. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    Those surcharges are imposed by AC -- YQ applies to all reward travel on any airline (with AP points), the difference is that AC's international fuel surcharges are substantially higher.
     
  11. rehoult
    Original Member

    rehoult Gold Member

    Messages:
    595
    Likes Received:
    1,890
    Status Points:
    1,020
    Couple things.

    1) There is no rules regarding who a bank partners with for rewards, so it wouldn't be an issue for a bank to partner with UA.
    2) This could happen with one of the banks, but it won't be Scotia; they have very little presence in the US and don't seem to be particularly interested in growing it. RBC is similarly not huge in the US. BMO and TD on the other hand have massive operations in the US and actively looking to grow them through takeovers. If I had to bet on who would be involved in this, I would say BMO. While they have a WJ card, UA and WJ attract vastly different consumers so they wouldn't compete against each other. And it would be a great card for them to sell to the many Canadian snowbirds that use BMO HarrisBank in the US.
     
    canucklehead and ACMM like this.
  12. Delta has a capital one card in Canada, Alaska Airlines has an MBNA in Canada, RBC has British Airways; It's only seems like the next step for the Combined United to come around.....
     
  13. ACMM
    Original Member

    ACMM Gold Member

    Messages:
    25,791
    Likes Received:
    113,120
    Status Points:
    20,020
    Thanks - just goes to show you how little I look at other airlines and other cards :)
     
  14. Canadi>n
    Original Member

    Canadi>n Gold Member

    Messages:
    1,956
    Likes Received:
    1,617
    Status Points:
    1,120
    Won't happen. Can't happen. First, Chase has no operation in Canada on the commercial level and IIRC does not have a chartered bank status for such purposes. Second, AC has just signed a major co-branding marketing agreement with UA/CO which no doubt also includes some form of non-compete clauses in the FF realm. More to the point, the startup costs for any such card in a market dominated the way Canada is by AE and AM is considerable and the returns negligible. If you want to put miles into your UA/MP account, build points up in the Amex MR account and set up a CO FF account before September and transfer them. Then in 2012 these will end up in the new MP/CO/UA program.

    TD's AA card is a holdover from the CP days and a marginal business at best for TD.
     
  15. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    I like the idea of BMO/HarrisBank tie-up given their HQ is in Chicago, and personally as I do my banking at BMO.

    Aeroplan offers a US--residents only World Mastercard operated by Bank of America, so I am not sure about the no-compete clause.
     
  16. Canadi>n
    Original Member

    Canadi>n Gold Member

    Messages:
    1,956
    Likes Received:
    1,617
    Status Points:
    1,120
    BMO is AIR MILES in Canada, and no way will they hook up because Harris Bank competes with UA's card banker in the US.

    There are more Canadian expats in the US who are AE members than UA members in Canada so it makes sense to have a US card for AC/AE. The key point is that the cost of miles is actually borne by the retailer not the bank, and the retail lobby has been hitting Ottawa hard about the extra rake off for premium credit cards that's taken by the banks to cover the cost of these benefits. Ottawa is going to come down hard on the banks over these premium cards after the election, so don't hold hopes for any generous offerings or new card programs. Not to mention UA will have to rationalize its US credit card operations once the merger is completed since CO and UA have two different banks and programs.
     
    rehoult likes this.
  17. Chase has a presence in Canada through a co-branded Marriott Rewards, Sears, Future shop, & best buy...
    Start up costs? ...It was worth it for AA, DL, Alaska, & BA.....(UA will be the biggest Airline as per their merger announcement.) I'm sure Canadians would be willing to join UA to fly the same AC metal with $200 less surcharge per redemption that is being paid now....
     
  18. The bank's operations in the US doesn't have much relevance since the CC product would be for Canadian clients spending in Canada. UA already has a US resident CC. UA and the attraction of associating with the world's biggest airline would would bring converts from AP hoarders/spenders along with the significantly lower cash costs for redemptions in UA MP.
     
  19. UA and CO both have Chase Co-branded Cards in the US.
     
  20. The Lev
    Original Member

    The Lev Silver Member

    Messages:
    398
    Likes Received:
    376
    Status Points:
    545
    Why is it that AC imposes those charges on AE members, but IIRC it does not impose the charges on members of other FF programs who redeem on AC?
     
  21. ACMM
    Original Member

    ACMM Gold Member

    Messages:
    25,791
    Likes Received:
    113,120
    Status Points:
    20,020
    If that is the case I did not know that and am surprised that there would be this difference! Ouch!
     
  22. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    I recall seeing fuel surcharges on *A tickets (on AP) but my memory is admittedly foggy. But the charges applicable would be determined by the AP's contracts with the other *A airlines, and quite likely by an overall *A policy.

    So it could be that *A doesn't allow the member airlines to add fuel surcharges for *A reward tickets. But it would not be able to regulate what a member airline charges its own members -- and in this case it's almost certainly governed by the contract between AC and AP.
     
  23. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    The extra surcharges (sorry, never broke them down by category) on AC tickets on AE and AC tickets on UAMP for my short-haul flights have been about $160 vs $55-60 respectively. On current AE redemptions, the Carrier Administration Service Charge alone is $56.40.

    For AC flights booked through Continental Onepass, taxes are $57.30.

    Mileage Plus redemption taxes on my Continental flights (EWR-YYZ) were about $60.

    It is not a straight comparison as on AE the redemption is 15K and on UA, its 25k.
     
  24. rehoult
    Original Member

    rehoult Gold Member

    Messages:
    595
    Likes Received:
    1,890
    Status Points:
    1,020
    As much as one might think there would be hoards of people jumping to a UA card, I just don't see it. Canadians as a whole would rather flying direct than route through the US on their trips so I don't see 1,000,000 Aerogold holders suddenly switching. OTOH, Canadians who frequently travel to the US would be a good fit for this card (especially if it was paired with a 0% cross-border fee) and while there aren't loads of those people, there are enough. Many of those people will have other financial dealings in the US, so it makes sense that the banks that would jump at the ability to offer a UA card are those which would stand to gain business not just from the card, but also from other accounts, mortgages, etc... Hence, in the event that this was to happen I would place a lot more money on US focused banks like BMO or TD than I would on RBC or Scotia who focus more on Europe and the Caribbean, respectively.
     
  25. Just to spell it out, Canadians could still fly direct and not route through the US (if they choose not to) on any of the same planes they're flying now with AP by US mileage Plus....and likely save $150 / redemption domestic within Canada or transborder and $300+ / redemption international.
     

Share This Page