Tag Archives for mileageplus.
United’s financial advisors “have begun contacting potential investors including private equity firms” about a sale of less than 15% of the MileagePlus program. The buyer may be a strategic partner “to help better monetize data from the business.” A sale could bring over $3 billion in cash.
United Airlines is beginning to roll out cash and points (‘money + miles’) awards on a limited number of domestic U.S. markets. They want to make it possible for customers to redeem a small number of miles and get some value quickly from the program.
The airline is changing the method they use to calculate distances between two airports. That’ll mean some customers earn more miles and some earn fewer. And that matters also because ‘Million Miler’ status is still based on distances flown.
United MileagePlus began as Mileage Plus with a space between the two words in May, 1981 – days after American AAdvantage launched the first mileage-based airline program offering free flights. Learning that American AAdvantage was about to announce its program, United pulled off the launch of Mileage Plus in just 10 days.
United Airlines MileagePlus is now charging a premium for non-stop partner award tickets booked within a month of travel. Right now, of course, when people book air travel it tends to be at the last minute cause of all the uncertainty in the world. And United hasn’t even told members they made this change.
The program’s $5 billion in new debt could create strong incentive for current cash flow versus long-term stewardship and profitability. Of course that is not new in the airline industry, at this time, or at United under Scott Kirby’s leadership in particular.
United Airlines shopped the MileagePlus loyalty program around to lenders to raise cash, and they had to present a lot of internal data as part of the process. Now that the transaction is moving forward, they’ve had to make this data public.
Here’s how the $5 billion loan is going to work, and some facts about the program they hadn’t previously revealed.
Redeeming airline miles or hotel points for retail products is almost never going to be a good deal. The loyalty program has to actually buy the item, perhaps they’re getting a modest deal compared to street prices but there’s usually a third party managing the process for them too that takes a cut. There’s not going to be any leverage redeeming miles this way.
United has made a change to elite qualification, making status harder to earn, and they’re putting the change into effect in the middle of this year. Travel on partner airlines won’t count as much towards earning MileagePlus premier levels – the amount of qualifying dollars you can earn will be capped.
I’ve cancelled American AAdvantage award tickets and Delta SkyMiles tickets for travel in the next month and neither program charged their usual mileage redeposit fee. These fee waivers are normally in place for top tier elite frequent flyers, but where a ‘no change fee’ fee waiver applies to travel, the redeposit fee for mileage tickets has been waived as well.
Not so with United, although that finally seems to have changed.
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
