The End of Frequent Flyer Programs That Benefit Families

  Recently United had announced a change to their frequent flyer program that will make it much harder for the occasional traveler and families to benefit from the very programs designed to improve brand loyalty. The airline joined other airlines in similar changes so it’s worth mentioning how this will affect future travel plans for you. Essentially the program has changed the accrual rules to FF miles. Instead of earning a mile for every mile travelled, you will earn a number of miles for every dollar spent. This change will reward those who buy the higher priced tickets and de-incentivize those who are the bargain shoppers and look for the best price for their tickets. To further widen the gap, those who fly more will also get more. If you are the yearly or semi-yearly flyer then you will probably only earn about 5 miles for every dollar you spend on your airfare. Whereas those who are silver status (25,000 miles and $2,500 in spending in a year) will earn 7 miles per dollar. Gold status (50,000 miles and $5,000 in a year) will earn 8 miles per dollar, Platinum (75,000 miles and $7,500) will earn 9 miles per dollar, and finally the “1K” passengers (100,000 miles and $10,000) will earn 11 miles per dollar spent. This means if I spend $400 on a ticket from San Francisco to Orlando as a basic Mileage Plus member I would earn about 2000 miles. Previously on this trip I would have earned about 5,000 miles. To put this into perspective, buying the same flight on Mileage Plus miles would cost 25,000 miles on the Economy Saver rate. So my family could expect to get a free ticket every 5 trips whereas now it will take 13 trips to earn a free flight. For those who fly frequently the rewards go as follows: For a $400 fare: Silver will earn 2800 miles Gold will earn 3200 miles Platinum will earn 3600 miles And “1K” passengers will earn 4400 miles This works out as a loss to all levels of passengers. However, you have to remember that In order to maintain even silver level you must fly quite a bit and pay the higher fares. So looking at it through the flex fare rates (the rate one pays for a refundable flexible ticket) for the same trip would now cost about $1600 per ticket round trip. So here are the accrual miles at that rate. Silver will earn 11,200 miles Gold will earn 12,800 miles Platinum will earn 14,400 miles And “1K” passengers will earn 17,600 miles Clearly the true “Frequent Flyers” make out like bandits in this scenario. I’m not even going to go into the benefit increases of going first class. But you can see how Gold or above will earn a free ticket at for every two flights they take. Now I don’t want to go into how this is unfair or any other class warfare rhetoric in this article. Truth is, it’s United Airlines program they can do whatever they want with it. But I do want to point out that for the past four years I have been a loyal customer of theirs and the biggest reason for that were those frequent flyer miles I was racking up. But now needing over 13 flights to earn the same amount of reward, I am completely dis-incentivized to remain loyal to this brand. I am a budget flyer and as such I am now free to search for the best price I can find from whomever I can. No longer will I pay slightly more for a United flight because I will be rewarded with a “free ticket.” (Although one could argue that if I had spent too much money in pursuit of a free ticket then the flight ceases to be free.) Oh, and that United Credit Card that I carry around in my wallet. It’ll cease to exist as well. It costs me $85 per year to keep that card. But as long as I fly with my family once a year it pays for itself in free baggage. ($200 savings per flight) plus gives me miles for every dollar spent on it. However, if I no longer have that brand loyalty then there really is no reason to keep the card. So, I wish United the best in their new program. While it’ll keep existing frequent flyers happy, I doubt it’ll garner them any new ones. But who am I to say. I’m no marketing genius, just a working schmuck who desires to travel without drowning in debt. But, as for me and United, we’ll soon be parting ways once I spend the miles I’ve accrued and I’m okay with that. Question is will they be happy over that?
Steve,