For about three years, Al Sanzari carried two JPMorgan Chase & Co. credit cards: a United Airlines card and the Sapphire Reserve.

He canceled the United card in March. The Sapphire card doles out more points for travel and dining, and he likes that he can redeem them for a variety of rewards—including United flights.

“There wasn’t anything the United card was doing for me that the Chase Sapphire Reserve couldn’t,” said Mr. Sanzari, a 29-year-old nutrition coach and personal trainer.

JPMorgan’s Sapphire Reserve has been a huge hit with frequent travelers and big spenders since its launch nearly three years ago. That is a problem for United Airlines Holdings Inc., which wants those same customers to sign up for and spend on the airline’s credit cards.

For JPMorgan and other banks, promoting their own branded cards while keeping airline partners happy is a tough balancing act. Banks in recent years have tripped over each other to lure big spenders with ever more generous rewards. At the same time, they are trying to stay in the good graces of their airline partners, which have come to rely on the revenue from their card deals with banks.

United executives have told JPMorgan they believe the Sapphire Reserve card is competing directly with the airline’s cards and siphoning off customer spending, according to people familiar with the matter.


While the deal lasts for another six years, according to people familiar with the matter, United President Scott Kirby has said publicly that the airline has had tough conversations about the JPMorgan partnership and wants to get more money out of it.

The airline has asked JPMorgan to pay it more for miles, among other things, according to people familiar with the conversations. JPMorgan, meanwhile, insists the cards aren’t direct competitors and believes the airline should be doing more to earn traveler loyalty, the people said.

“This is a solid, longstanding relationship, and we’re working together to find new ways to grow our partnership for years to come,” the companies said in a joint statement to The Wall Street Journal.

At least half of airlines’ cash earnings in the next five years will come from the sale of miles to card issuers and frequent fliers, according to estimates from Stifel airline analyst Joseph DeNardi.


“When you talk to the card issuers, the general sense is the balance of economics is generally skewed in [favor] of the airlines, and if you talk to the airlines they say ‘we have more room to go,’” said Mr. DeNardi.

JPMorgan and United have been partners since 1987. Today, the bank issues five cards for the airline with different rewards structures.

When JPMorgan launched Sapphire Reserve in 2016, applications for the United cards slowed, according to people familiar with the matter. United executives were unhappy, the people said. Among their complaints: the bank was offering a more generous sign-up bonus for Sapphire Reserve than the United cards, the people said.

JPMorgan pays United for the miles cardholders accrue. The airline gets paid before customers book flights, and a portion of the miles is never redeemed. United also gets a cut of the swipe fees merchants pay when customers use the cards.

United Airlines President Scott Kirby has said publicly that the carrier has had tough conversations about the JPMorgan partnership and wants to get more money out of it. Photo: kamil krzaczynski/Reuters

It works differently with Sapphire Reserve. Customers collect points they can use to buy tickets on a number of airlines, including United, through the bank’s Ultimate Rewards website. JPMorgan then buys the tickets from the airline when cardholders redeem their points for a flight. It doesn’t share the swipe fees.


Sapphire Reserve points are worth 50% more when used to book travel, making the card particularly attractive to frequent travelers who aren’t loyal to a particular airline.

The perks on airline cards have been enhanced in recent years to better compete with banks’ premium offerings. Some United and American Airlines cards, for example, added last year 2 miles for each dollar spent at restaurants.

Airline cards “have felt the heat from bank cards,” said Brian Kelly, founder and chief executive of rewards website the Points Guy.

Rewards travel is getting cheaper, according to an annual IdeaWorks survey. WSJ’s Scott McCartney digs into the data and explains how you can take advantage of the miles you’ve saved. Photo Illustration: Drew Evans/The Wall Street Journal.

Airlines still have plenty of leverage with the banks. A series of mergers that created a few mega-airlines in the U.S. has strengthened their hand.


When Delta Air Lines Inc. renewed its card partnership with American Express Co. earlier this year, the airline said it expected its financial benefit from the deal to double to nearly $7 billion annually by 2023. Delta is AmEx’s largest card partner, accounting for some 21% of its world-wide credit-card balances at the end of 2018.

Citigroup Inc. and American Airlines Group Inc. also are discussing possible changes to their card benefits, according to people familiar with the matter. One of the issues that has come up over the course of the partnership: Citigroup wants its customers to be able to transfer American miles to its Prestige credit card, according to people familiar with the matter. American hasn’t historically allowed for that.

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Banks say there is room for both airline and premium cards in consumers’ wallets.

Kristi Fergason charged nearly all her expenses on her United Airlines credit card for about 16 years. That changed when she signed up for Sapphire Reserve shortly after it rolled out.

Ms. Fergason, 49, moved most of her travel and dining expenses—about a third of her card purchases—to Sapphire Reserve for the extra points. She uses the United card for almost everything else.

She also uses Sapphire Reserve points to book airfare on United and Southwest Airlines Co. , to rent cars and for hotel stays, a strategy she employed for a recent family trip to Wyoming, South Dakota, Arizona and Nevada.

“Hotels, rental cars, cruises and all restaurants used to go on the United card, but now go on the Sapphire Reserve,” she said.

Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and David Benoit at david.benoit@wsj.com