June 11, 2014 in Business

United Airlines alters how travelers earn mileage rewards

David Koenig Associated Press
 
Associated Press photo

Travelers check in at the United Airlines ticket counter at Terminal 1 in O’Hare International Airport in Chicago.
(Full-size photo)

DALLAS – United Airlines is about to start rewarding its big-spending customers at a potential cost to bargain-hunting travelers who rack up miles with long-distance getaways.

United follows other U.S. airlines that have begun basing awards on money spent, not miles flown. The changes would benefit customers like elite members of United’s loyalty program who fly at least 25,000 miles a year.

Starting next March, elite members of United’s MileagePlus will earn 7 to 11 miles for every dollar they spend on tickets, not counting taxes. Regular members, those who fly less than 25,000 miles and spend less than $2,500 a year, will get 5 miles per dollar toward free travel.

Since 1981, when American Airlines rolled out the industry’s first big loyalty program, travelers were rewarded for the number of miles they flew regardless of how much they paid for tickets.

In the last few years, however, Virgin America, JetBlue and Southwest Airlines retooled their programs to favor passengers who spend the most. In February, Delta Air Lines announced that it would do the same starting in 2015.

American Airlines and US Airways have yet to follow suit and say they remain focused on completing a merger between the two carriers.

The shift is part of a larger strategy by airlines to lure big spenders, especially business travelers who buy expensive, fully refundable tickets, sometimes in the first- or business-class cabin.

There are 95 million MileagePlus members.

Leisure travelers who fly United once or twice a year may not be greatly affected, said Brian Karimzad, director of the MileCards.com website. Many of those customers earn most of their miles on the ground – chiefly by using the airline’s credit card, he said.

Even among United’s corporate travelers, the changes will benefit some more than others.

“The big losers are people who work for companies that require them to always take the lowest coach fare, even across the Atlantic Ocean,” Karimzad said. “That’s a lot of companies.”

While basic United MileagePlus members will earn 5 miles per dollar, awards for top fliers will depend on their status level. For each dollar, they will earn:

• 7 miles for “silver” members (25,000 miles and $2,500 in spending the previous year).

• 8 miles for “gold” status (50,000 miles and $5,000).

• 9 miles for “platinum” (75,000 and $7,500).

• 11 miles for “1K” passengers (100,000 and $10,000).

United did not alter the miles needed to attain elite status, nor did it change the number of miles needed to earn a free flight. It tweaked redemption rates in November, raising the mileage price for many international trips in first- and business-class.

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