United changes frequent-flier guidelines

Posted: June 12, 2014

United Airlines on Tuesday became the latest major carrier to change its frequent-flier program to reward miles for free travel based on the fare paid, rather than the distance flown.

The change, announced by the nation's second-largest airline by passenger traffic, is modeled after a shift that competitor Delta Air Lines announced in February for its SkyMiles program, scheduled to take effect Jan. 1.

Southwest Airlines, JetBlue, and Virgin America already have revenue-based rewards programs, which favor the passengers who spend the most, such as business travelers who buy expensive tickets and top spenders in first class and business class.

United, which has 95 million members in its MileagePlus program, announced that starting in March customers who fly fewer than 25,000 miles and spend less than $2,500 a year with the airline will earn fewer miles per dollar than "elite" level members.

General members will receive five miles for each dollar spent on tickets, excluding government taxes and fees for extras like checked bags, while bigger spenders with silver, gold, platinum and 1K status will earn between seven miles and 11 miles for every dollar spent on their fares.

"These changes are designed to more directly recognize the value of our members when they fly United," Thomas F. O'Toole, United senior vice president, said in a statement.

Passenger "road warriors" who fly frequently on flexible-fare tickets and international business and first-class travelers are airlines' most profitable customers.

United and United Express operate 19 flights a day at Philadelphia International Airport and have 4.7 percent market share locally.

Newly merged American Airlines/US Airways is the last major carrier that still bases award miles on distance flown. But that could change next year, when American and US Airways combine their separate frequent-flier programs. Those carriers transport nearly 80 percent of fliers in Philadelphia.

Historically, frequent fliers have been rewarded for the miles they logged. But industry consolidation has led to fewer carriers, fewer flights, less competition, and now the shift in frequent-flier programs.

After the recent mergers of United and Continental, Delta and Northwest, Southwest and AirTran, and American and US Airways, airlines have more clout to make such changes. The result: Travelers will have to come up with more reward miles to get free tickets.

"People don't like these changes," said Brian Kelly, founder of the website ThePointsGuy.com. "If you are flying short distances, and your company is shelling out $1,000 to fly Philly-to-Atlanta every week, you may make out. The general traveler is going to be earning fewer miles."

Kelly urged consumers unhappy with the changes to "let United know via letter, call, Twitter and Facebook, or simply vote with your wallet" and fly "an airline that better rewards your loyalty."

"People who fly on high-fare tickets will be the winners," said Brian Karimzad, director of MileCards.com. The big losers, he said: people whose employers require them to take the lowest coach fare, whether across the U.S. or internationally.

Leisure travelers may not be greatly affected because they earn most of their miles on the ground, through their spending on credit cards, Karimzad said.

"If you want to go to Hawaii, the starting price is 45,000 miles. Now, you will get a little less help from the flights you make on United," he said. "To make that up, you may have to spend on your credit card for a few extra months."

By the Numbers

95M - Members globally in United Airline's MileagePlus program.

5 - Miles that general members will earn per dollar spent on flights under United's new rules.

7-11 - Miles that elite members will earn per dollar spent on flights under United's new rules.

19 - United and United Express flights operated daily at Phila. International Airport.

4.7% - United's share of the local market.



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