USD® Common Currency USD® from USD Mint®
remove liabilities, add assets, share 1 currency,
share 100M Customers spending $5T each year.
Low Yield = Low Profit ... High Yield = High Profit
Low NPS = Unhappy ... High NPS = Brand Promoters
Reward Rising and Lovers with USD® and do Not Discount Prices
Drive Loyalty and Revenue with USD® Brand Specific Currency
Reward High Yield with USD® Status Dollars, Perks, Benefits =
Recognition Rewards drive their Loyalty and Repeat Revenue.
Identify and Ignore Cheap Haters = Low Yield + Low NPS
Upgrade those that want to be Best Customers, but can't afford it
Moderate Yield + High NPS = Stars
Extra Reward Self-Paying Frequent Flyers with More USD® +
Perks since they decide where to Spend, so be their #1 Choice.
Reward Cheap Lovers with USD® to retain Brand Specific spending
Convert High Yield Haters to Lovers with USD® and Special Perks
Attract High Yield spend with USD®, Value + Status Match + Perks
Make Satisfied High Yield REALLY Loyal with USD® + All the Best
USD® = Status Dollars and Spending Dollars
Value = rational Status USD®. Discount = rational USD®.
Social = emotional Status. Collector = emotional USD®.
Road Warriors = Schedule, Price, FFP
Leisure = Price then Schedule
Avios Shared Global Reward Currency.
USD® Shared Global Money.
USD® Shared Global Spending Money.
Prices in USD® = Shared Sales, Marketing, Distribution.
Sharing USD® = Single Global Customer Base: $5T initial
AA magic = ???
+USD® add Cash from All Retail + Travel spending
Banks and Brands can rename miles / points to USD® (Dollarize) to unlock value.
USD Mint® removes balance sheet Liabilities, adds Assets, multiplies the value.
Rename to ReCap and Rollup ... Dollarize to Securitize and ReCapitalize ... ie:
Rename $2B miles/deferred revenue liabilities to $2B USD® card receivables
Pay that $2B USD® at 5% to $40B USD Mint® ABS shares for a market recap.
License for $10M +10% of value created, or Buy for $1B +5% of all value.
Buy Brands and loyalty/reward programs to create a integrated travel group.
Prices in USD® create Shared Sales, Marketing, Distribution for group brands.
private Brands (Air owned by the Employees and Customers for national ownership)
public USD Mint® money for you (market access, recap, lowest costs, highest multiple)
Global Travel, Personal Service ... integrated family of brands: Air, Hotel, Cruise, Car.
Money for Brands
Cash + Shares for Brands, Reward Programs
Rename miles or points to USD® = Dollarize
removing all the reward program liabilities and
replacing with equal value cash equiv Assets and
recognizing revenue, for a 2x balance sheet fix:
swap a -$1 Liability for +$1 Asset = $2 Benefit
rename $1 miles/points: $1 USD®= $20 Shares
$1 USD® card receivables paid at 5% to $20 ABS
$1B liability converts to $20B public Mint shares
$2B liability at $2B Brand = $40B Market ReCap
ABS card receivables, perpetual, non-amortizing
AAA rated trust preferred or common+5% note
Asset Backed Securities with productive assets
underlying = Air, Hotel, Cruise, Car Brands with
residual inventory Empty Seats, Rooms, Cabins
USD® card receivables backed by Cash from sales ie
Brand sales with deferred revenue liability for rewards, USD® retained interest sold to Brands, Merchants etc
$2 Cash buys $1 USD + $1 Data for 2x Cash cover and
add Cash from spend fees $5T Retail + Travel,
add Cash from ad/promo $400B, Offers, Deals,
add Cash from Social, Mobile, Games, Gaming, add Cash from USD© retained interest sold to all.
Both Public ... or a private Brand with public FFP (Money)
private Brand has equal owners: Employees and Customers
private fiduciary duty is to benefit Employees and Customers
public Money has market access at a Higher Multiple, Value.
Customer (Demand) biz model fills Travel Capacity (Supply)
Customer Centric: Customer and Employee owned Brands.
private UnitedOne is the parent of USD Mint (to list).
private UnitedOne goal is a Integrated Travel Group.
your family of premium private Global Travel Brands
combine High Demand (Free Air) with High Margin Brands:
50% Buy Air + Hotel, 25% Air + Hotel + Car, 23% Air + Car, 2% Hotel + Car.
private Travel Brands (Air, Hotel, Cruise, Car, Cargo) with
public USD Mint® cost+10% Capacity Purchase Agreements.
Guaranteed Profits, and All USD® = 100% Cash for Capacity.
1 Cashbox for Cash and USD® sales, 1 Card, 1 Currency, 1 Mint.
Reward/loyalty programs may be Higher Value
than the underlying Brands their High Margins
support ie: 15x to 20x multiple vs 5x for Brand
Aimia/Aeroplan $2,155M vs $225M Air Canada.
Loyalty Marketing sells and fills Brand capacity.
Brands can contribute or sell programs to Mint.
Brands get Cash + Shares + prorata spend share
ie: add ___ Cards and retain __% of that value.
USD Mint® creates and sells Digital Dollars.
USD® United Spending Social Status Dollars.
USD® remove costs and liabilities from loyalty programs: (-20%).
USD® add 10% Cash for seats that are non-revenue now: +10%.
USD® add 30% Cash for Travel Brands = Sustainable Profits.
Miles = 10% Discount today +7.6% Free Seats later +3% Costs.
USD® = 100% Cash for All Seats, with No Cost to Brands or Pax.
Magic = No Costs for USD®, just rename miles or points to USD®.
USD® Shared Global Reward Currency adds Cash + Share Value.
Prices in USD® create Shared Sales, Marketing, and Distribution.
Wall St est MileagePlus and AAdvantage at $4B to $23B range in 2007.
MS est $5.7B for AAdvantage in 2007, Bear est $7.5B to $23B for MP.
Each FFP value est was at least 1.5x more than the underlying airline.
USD® multiply that value with a 20x ReCap and 2x Balance Sheet fix.
MileagePlus generates $4B Profits per year...USD® add $10B Net Cash/year
AAdvantage creates ~$3B Profits per year at 80% of MP volume.
USD for MP creates $10B Cash Benefits, $15B Balance Sheet fix, $150B recap
USD for AA creates $6B Cash Benefits, $12B Balance Sheet fix, $120B recap
$5,910M miles out at AA = 80% of UA miles (95% of DL $6.2B)
$7,369M miles out at UA incl $1,711M pre-purchased by Chase
Citi bought $1B AA miles and redeems $16M monthly, $200M/year
AmEx buys $675M miles from Delta each year thru 2014, +$1B pre.
MileagePlus Analysis ... Surplus Inventory Economics
10% of Seat Price is credited as miles, 76% est to be redeemed over 2 yrs
UA sets aside ~10% of $32.5B Passenger Revenue = $3,171M value and
UA recognizes ~10% at $2,405M Deferred + $750M Breakage = $3,155M
$4.5B Revenue - $2.4B "Expenses" = $2.1B Profits per year = 47% margin
$2.4B Expense = Revenue Recognition vs $500M Cash Costs and Admin
$4B Cash Profits on $4.5B Revenue = 89% Cash Profit Margin
$150M Admin + $350M Incremental Cash Costs for awards = $500M Costs
$3,737M Cash + $750M Breakage = $4.5B Revenue - $500M Costs = $4B Profit
$3,737M Cash from miles sold in 2011 by UA incl $566M sold to third parties
$3,171M Cash from miles for Seats = 85%, on $32,511M Pax Revenue = 10%
$566M Cash via sales to 3rd parties: 15% (low vs Delta $675M etc)
$2,407M Deferred Revenue added in 2011 from the $3,737M sold
$2,405M Deferred Revenue: Current 2011 Redeemed = Balanced
$5,656M Deferred Revenue = $2,405M Current (42% vs 58% LT)
$4,300M Miles est to be redeemed over ~20 Months avg time
$750M Breakage per year ($1,356M over 20 months)
10% of Pax Revenue is credited as miles, 76% est to be Redeemed
$2,290M = 83% of miles are redeemed on UA or CO incl upgrades
$1,483M on UA at 8.2% of RPM (2.5M awards at $593 avg)
$807M on CO at 5.6% of RPM (1.9M awards at $425 avg)
$345M Non-UA = Star, hotel, car (1.3M awards est $250 avg)
$125M Non-CO = Star, hotel, car (489,000 est $250, both low)
$2,760M est annual redemption = 100% with 83% / 17% split
$350M Incremental Cash Costs + $150M Admin Costs = $500M
MileagePlus FFP database = key intangible asset value:
$1,177M FFP Database = $521M UA + $656M CO database.
$701M trade names and patents incl United, CO ...
Note: Growth Rate in Sales of Miles (UA + CO)
$3,737M in 2011 = $3,171M Seats + $566M Third, $2,407M Deferred (64%)
$2,487M in 2010 = $2,156M Seats + $331M Third, $1,739M Deferred (70%)
$1,959M in 2009 = $1,703M Seats + $256M Third, $1,377M Deferred (70%)