United Airlines President Scott Kirby believes airfares should be 100% higher. He hasn’t been able to get there, but thinks there must be room in the prices they charge to access United Clubs.
Three years ago after raising lounge membership price, United said they hadn’t increased prices enough. Since people were “still buying” at the $550 general member price point, the airline believed it hadn’t “hit the sweet spot yet.”
In October American Airlines announced an increase in the general member prices for its lounges from $550 to $650. Elites pay less, and premium co-brand cardholders still pay just $450 a year (and no annual fee additional cardholders get access, too). Then a month later Delta announced a price increase too.
United’s website now says,
Effective August 13, 2019, we will no longer require a $50 United Club initiation fee. The new United Club annual membership price will be $650 or 85,000 miles.
Currently general members pay $550, and there are discounts down to where 1K members pay $450 which is also the annual fee of the premium co-brand United credit card that comes with lounge access as well. There’s no mention of lower prices for elites once this change goes into effect. By the way domestic United Clubs no longer offer showers.
Empty soup in United Club Houston
It’s an historical anomaly that US lounges charge for access at all. In general airlines around the world (outside Australia/New Zealand) do not charge for access. It’s provided free to premium cabin and elite customers.
In the US, airlines charge even elite frequent flyers traveling domestically for access. From the time American opened the first airport lounge up through 1974 they didn’t. However the federal government ordered – on anti-discrimination grounds – that airlines either make clubs available to everyone, make clubs available to everyone flying a particular class of service, or make clubs available to everyone who pays.
Paid memberships were a way of ensuring compliance with non-discrimination rules coming out of the civil rights era. Anyone who could pay – regardless of race – could access the lounges.
Once the airlines had a revenue stream associated with the lounges it became difficult to walk away from that. The lounge network starts looking like a separate business unit, with its own profit and loss calculation.
It seems strange to pay hundreds of dollars to access US airline lounges compared to what is bundled with status elsewhere in the world. I’m not saying it isn’t worthwhile — for the handful of times a year I’m delayed by weather or mechanicals, the help I get in the lounges is worth the price of admission.
It’s hard to imagine a Newark-based flyer, with the virtually non-existent lounge situation in that key United hub, being willing to pay $650 a year.