In what should be a surprise to nobody, United has announced changes to the way it’s loyalty program “MileagePlus” will operate. They are following the lead of Delta and moving to a revenue based frequent flyer model. This means that customers will earn frequently flyer miles based on how much they spend rather than how many miles they fly.
The exact amount of miles you’ll earn will be dependent on what member level you have. The rates are as follows (per dollar spent):
- Member: 5 miles
- Premier silver: 7 miles
- Premier gold: 8 miles
- Premier platinum: 9 miles
- Premier 1k: 11 miles
These changes will come into effect on March 1st, 2015.
The Good News
- Redemption rates are not changing, this means all award flights will still cost the same amount (United did have a devaluation earlier this year)
- Those who fly high value short flights will actually receive an increased amount of miles per flight (e.g regional center to regional center)
- Those flying first or business class should also see an increase in the amount of miles they receive
The Bad News
- Those who fly the cheapest possible route (e.g leisure/vacation travelers) will earn much fewer miles than they usually would
- Long haul coach flyers will see a big reduction in the amount of miles they’ll earn on most flights
Our Thoughts
This should only really affect those who fly frequently for work and thus rack up a large amount of bum in seat paid flights each year. I’m unfortunately one of these people and the amount of miles I’ll earn after these changes will be reduced dramatically. The biggest loss for me will be in international flights, that said I almost always book my flights based on cost rather than airline loyalty and this will remain the same (I like to save my employer money where possible).
On the bright side, award availability should increase because of this change. People who get their miles through credit card sign up bonuses and manufactured spending will not be negatively affected.
From a personal perspective this is a disappointing change, but as I stated earlier in the article it’s not altogether surprising. Loyalty programs are becoming more & more sophisticated in the aim of increasing the bottom line for a company. These programs are big business and they make a lot of money by selling miles to credit card companies and other “resellers”.
It’ll be interesting to see what American Airlines does after the merger, will they adopt a revenue based model like United & Delta? Or will they use this as a unique selling proposition and market the fact they don’t use a revenue based model? What do you think of the new United changes? Let us know your thoughts in the comments.
