Seriously, is anyone surprised? And if you are, why? What were you really expecting?
United announced today that they’re going with a spend-based earning program for most United-operated or sold flights. The numbers essentially mirror the changes Delta announced earlier this year for the SkyMiles program. The multiplier numbers for the different status levels are the same and there will no longer be a bonus for earning based on premium cabin travel; that’s baked in to the fare price (premium cabin sale fares will be the most significant losers on this aspect of things).
And then there’s this interesting tidbit in the details United released:
Tickets for flights operated by a Star Alliance™ or MileagePlus partner airline that aren’t issued by United (ticket numbers that don’t start with “016”) will still earn award miles based on distance flown and the purchased fare class.
Partner flights purchased through United – a necessary bit to get credit for elite qualification – will apparently earn based on the fare, not distance flown. That is an important distinction (assuming it is true) which adds complexity to the program. And that’s after getting to the point where the program (and all of them, really) is unnecessarily complex. I understand the technical issues of making it happen. Heck, I have seen first-hand the technical issues associated with United properly (or, all too often, improperly) crediting PQDs which is the same basis for the upcoming earning rules. And that certainly sucks. But at some point it seems that making the internal systems work reasonably reliably should come before upending everything and changing the way the entire program functions when it depends on that. Or maybe that’s just me being naïve.
I’ve said for several years now that spend is a smarter basis on which airlines should reward passengers versus distance flown. My view on this topic has not changed, despite the negative implications it has on me personally. And I truly believe that we would have seen this sooner had it not been for the technical limitations, those which the airlines haven’t completely solved but which they’re getting closer on. I don’t particularly like it, but the game has shifted from one where a customer works to fly cheap and earn miles, arguably screwing the airline, to one where there is manufactured spending where one is likely screwing a merchant or bank to earn miles on the cheap. On the one hand, I suppose the part where the airlines get a bit better paid is nice since I need them in business to continue having fun. But I really do enjoy flying, even if it is just to earn some miles one day.
I do know that my spend and travel pattern has already diversified significantly this year, even more than I expected it would after United’s announcement related to status-based earning. And there are some real costs to that for me as a passenger. But those costs are not such that shifting my spend to an airline where I can “profit” from status are smart.
Just like with Delta there will be some winners and some losers with this change. There are some high fare customers who will be very happy to see the new rules take effect. And that’s great for them. Must be nice to mostly spend other peoples’ money, huh?
As for the rest of the industry, I figure this is likely part of AA’s new program when they announce it later this year. They’ve got very little to lose by making such a change and plenty to gain. That leaves Hawaiian and Alaska Airlines as the holdouts in the US market. Those are two small dominoes left to topple over.
And for those suggesting that United should have had some creativity and done things differently than Delta did, what would you actually change? Unless there are plans to drastically revamp the redemption chart (probably a few years off yet) there isn’t really much I can see as reasonably useful with alternate numbers involved.
- Delta ties elite status to spend
- Why spend is a good qualifier for airline status
- United Airlines adds spend to elite qualification requirements
- Are we looking at a shift towards revenue-based loyalty programs?
- Why the Delta SkyMiles changes don’t really matter
- Winners and losers with Delta’s new revenue-based SkyMiles earnings
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