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United Changing Frequent Flier Program to Reward Spending, Not Distance

James Joyner
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airlines-money

United is joining Delta in making its rewards program match the realities of the business.

Chicago Tribune (“United Airlines overhauls frequent flier program“):

United Airlines on Tuesday made a dramatic change to its frequent-flier program, basing earnings on dollars spent rather than miles flown.
 
Chicago-based United’s new MileagePlus program mirrors a move made by Delta Air Lines earlier this year. It’s aimed at rewarding big-spending fliers who are most profitable for the airline, making corporate travelers the big winners and most leisure travelers the losers.
 
The switch to base awards on fares, specifically base fare plus carrier-imposed surcharges but not taxes and airport charges, will take effect March 1 of next year and applies to flights on United, United Express and most United-issued tickets for flights on the company’s airline partners.
 
“It’s a risky move given United’s current underperformance versus Delta on both operating and financial measures,” said Brian Karimzad, director of MileCards.com. “Many of United’s most frequent flyers are frustrated with the airline right now.”
 
Years ago, fares correlated more closely with miles traveled, so miles were a good gauge for money spent with the airline. That’s no longer true. Flights of the same number of miles could cost $200 or $1,000. 

As with charging more for aisle and bulkhead seats, I find this change perfectly reasonable. The whole point of frequent flier programs, after all, is to incentivize customers to spend more of their flying dollars with a particular airline. Those who pay extra for first or business class seats, or simply book last minute and thus pay full fare for coach seats, should surely be rewarded more than cheap bastards like myself who book trips based on fare discounts when possible.

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13 responses to “United Changing Frequent Flier Program to Reward Spending, Not Distance”

  1. Sean Paul Kelley Avatar
    Sean Paul Kelley

    I absolutely loathe United. I loved Continental. But having taken two long haul flights with them in the last 6 months, one to Central America and the other to Istanbul, I will now seek to fly overseas on another carrier and will fly Southwest domestically. I was a loyal customer for almost 20 years and the airline has grown so bad it’s like flying Aeroflot in Russia during the late 90s, early 2000s.

    Yes, it’s that bad.

  2. James Joyner Avatar
    James Joyner

    @Sean Paul Kelley: United is horrible. So is Delta. And US Airways. Pretty much all the major carriers are awful.

    I’ve had good, but extremely limited, experience with JetBlue and Southwest but neither currently service Reagan. Southwest is supposedly on the way.

  3. Anonne Avatar
    Anonne

    Southwest bought AirTran but the companies still operate as if there is a wall between them, although there are some perks – if one of your legs is a Southwest leg, you get 2 bags to fly free the whole way. It will be a while before AirTran is gone but there are still some benefits.

  4. John Peabody Avatar
    John Peabody

    Hehehe- Mr. Joyner had me when he said “cheap bastards like myself” Hehehe

  5. Davebo Avatar
    Davebo

    @Sean Paul Kelley:

    I’ve got to agree. Continental was the best of the US operators especially for overseas flights.

    United has sucked the last three times I’ve flown it (2 int’l and 1 domestic).

  6. Electroman Avatar
    Electroman

    Delta did the same thing relatively recently. It’s actually fine for business travel, but isn’t too good for vacation travel. I don’t like UA or AA, but I have a particular loathing for Delta.

    Back in the day I flew mostly on Eastern from their hub at DCA (which will always be “National” to me, regardless of who it’s been renamed for). I remember them as being pretty good, and I’m not one to forget bad experiences, *especially* involving aircraft.

  7. Electroman Avatar
    Electroman

    @Sean Paul Kelley: I’ve had very good experiences with THY (Turkish Airlines) CONUS to Istanbul. If you have UA miles, you can use them to book on THY since they’re both Star Alliance members.

  8. MichaelB Avatar
    MichaelB

    James, I am surprised to hear you say that Delta is horrible. I have actually been pretty happy with them that last couple years (mostly flying in/out of NYC). Though, to be fair, it may just be Stockholm syndrome since I fly a decent amount.

  9. Matt Avatar
    Matt

    I was caught in Chicago when the fire caused all outgoing flights to be canceled for many hours. Southwest gave me some excellent customer service during that panic day.

    Other then one lady a the ticket counter the entire staff was extremely helpful and nice.

  10. ernieyeball Avatar
    ernieyeball

    I have not flown enough in my life that frequent flyer miles mattered to me. I have not flown at all in at least 15 years.
    Are FF miles/credits a bonus the airlines use to attract customers? Do these programs increase the overall cost to the airlines of providing transportation or are they considered an expense that can be obviated for tax purposes?
    I suspect it is unrealistic that we will see these perks eliminated in return for lower fares/charges for all customers.

  11. rodney dill Avatar
    rodney dill

    @James Joyner: I’ve been flying between Detroit and Houston a few times a year, and I’ve had no problem with Delta so far. After a trip to the UK, on Lufthansa, I’d stick with them for overseas. The amenities are better, even in coach.

  12. Electroman Avatar
    Electroman

    @ernieyeball: Frequent-flier miles are used to retain, not attract, customers. It’s a kind of customer lock-in.

    I travel a lot (for business) by air, and use the FF miles for vacations. I currently have about 110,000 American Airlines FF miles, and have something like 150,000 United FF miles. I have Delta miles as well, but the reality is that it’s almost impossible to book “reward travel” on Delta.

    My wife and I are taking an Alaska vacation this year, and the air transport (ten segments, all on Alaska Airlines) is all paid for by FF miles – it would cost about $3,000 US otherwise. I think I used about 175,000 FF miles for that airfare.

  13. ernieyeball Avatar
    ernieyeball

    @Electroman: Thanks for the input.
    I always enjoyed flying the several trips I have taken over the years. Usually Midwest to California and return. My 35 year career in the landline telephone industry mandated that I supply my own truck and tools for jobs so I drove to the 14 states I worked in.
    Of course this was all before the security screening that is routine today.
    I actually like driving more than flying and try to motor from Southern Illinois to my brothers place in the high dessert in Southern California and back for Thanksgiving each year since I retired.
    I have known a few folks who have driven from the Midwest to Alaska and back!
    If I had an oil well in my backyard I could make gasoline in my kitchen. Then who knows where I would go?

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