During the third quarter United Airlines earnings call this month, CEO Scott Kirby declared a goal of doubling MileagePlus profit by 2030. That was also his stated goal in 2021 within the same amount of time and he didn’t hit it.
He said they have “some really big ideas on the loyalty program” that he wouldn’t reveal,
But they’re doing some interesting things.
- United – like Southwest and Wyndham – is introducing a mileage-earning debit card. That taps a new market of customer who can’t get credit or doesn’t want to use credit. While average spend is lower, there are more debit than credit transactions in the United States.
- Kirby said they’d sell MileagePlus as more valuable than competitors. I thought this was odd since the value of MileagePlus has been declining over the past five years fairly consistently.
I speculated that the recent improved award availability for credit card customers, while restricting it from non-cardmembers and partner airline members, was part of this strategy.
Interestingly, United has quietly just lowered partner award prices. It seems they do not want to mimic Delta on everything.
- Transatlantic business class partner awards generally drop from 88,000 miles to 80,000 miles.
- Transpacific business class partner awards drop from 110,000 miles to 100,000 miles.
These aren’t game-changing updates but they’re moves in the right direction, and the opposite direction from where they’ve consistently been heading. Pricing is still higher than with many competitors, and higher than what partners like Air Canada Aeroplan charge for the exact same flights, but it’s progress.
For United to grow the program, they need to compete for business – both with other airlines (especially in markets they do not dominate) and with non-airline programs (like cash back or bank-branded programs like Chase Ultimate Rewards and American Express Membership Rewards).
If this is a sign that United has some fight in them to deliver value to customers, that’s a great sign, because it also could elicit a competitive response – instead of a race to the bottom, a race to deliver value to customers. However, we’ve heard the same goals from United and Kirby before, accompanied by devaluation. So we’ll have to wait and see what this means.
(HT: Thrifty Traveler)
Basically seems like the rack saver rates are primarily available to card members. And then it says card members save X% (whatever the discount to the saver rate is).
Really just played around with this for one minute, but looks like the era of “you generally will need the card in the ecosystem to get the saver rate” may be upon us? Have to imagine AA/DL will follow suit.
Less of a ‘company doing a nice thing,’ and far more of ‘the economy is about to tank, and we’ve been in a silent recession for awhile now…’ *gulp*
They have also simultaneously been reducing the amount of their own awards they release to I (availble for partners to book) and increasing the amount of IN – which you need to have a credit card to book. Before you had to have Platinum or higher status to get IN space.
@ Peter — Delta invented this with the 15OFF benefit for SkyMiles AMEX cardholders almost 3 years ago!
Hi Gary, 1. The US-Europe business 80K (credit card holders) / 88K (everyone else) isn’t new. That pricing has existed for at least a couple years. I just did a couple searches and found exact pricing today as previous. So that’s definitely not a sign of lowering points prices. Just business as usual. 2. I think there’s a real story in United systemically bringing Star Alliance partners in-line with their points pricing. I’ve been planning a trip HNL-IAH and was struck by United, Aeroplan, and Lifemiles all pricing at 25K for economy one-way. Turkish, which should be 10K, is unavailable and when I did some additional digging it seems Turkish has zero availability for any United flights now – so maybe United has kicked out Turkish until they get in-line the way Aeroplan and Lifemiles did. Once United succeeds at bringing all SA partners in-line with their pricing, that’ll push more business to MileagePlan.
Yeah I’m pretty sure I’ve seen at least 2 years of 80k discounted cardholder rates to Europe. That’s certainly not new, and I thought even pre-dated Delta’s cardmember discounts, but I could be wrong on that part. I use AA miles a lot more than UA.
@Gene – this is different. It’s not just “here’s a 10% or 15% discount if you are a cardholder”. It’s “if you are a cardholder you get access to the saver rack rate “IN” space if available” and if you are not a cardholder you get access to the other dynamic pricing space which may be saver-esque. I’ve seen results where cardholders save 1% (discounting a ~41k economy ticket to 40k for example). Not just “here’s a 40k ticket and cardholders save 10% so you can get it for 36k”. Different model completely.
@Peter — Totally different… Like, with Delta, it’ll be 15% off 200,000 SkyPesos for DeltaOne on JFK-LAX (just 170K if you have that Reserve card; what a deal!); unlike United, where that EWR-LAX Polaris ticket will be 150K after 25% off 200K, but, that’s today only, or until some else buys a ticket, then it’ll be 180K after 10% off 200K. Wait a minute…
I have not seen 80k miles for BC in a very long time. I’ve been shopping for this rate or one close to Lisbon for months.