United is Trying to Stamp Out the Mileage Run – and the Customer Evangelist

Classic mileage running, where you fly to earn redeemable miles that can be used for future free trips, has been dead for a long time. The low fares and lucrative bonuses on offer 16 – 20 years ago meant that it could (occasionally) make sense, but the last vestiges of it more or less ended with mileage accrual based on fare paid.

The ‘purist’ mileage run was one where you didn’t actually do anything where you were going. It wasn’t an extra weekend trip for leisure. If you left the airport at all it might be to cheap overnight accommodations. But the whole point was to keep the cost per mile down as low as possible. I was never a purist in this regard.

Even with frequent flyer programs ‘evolving’ it still made sense in recent years to go on that occasional end of year mileage run for elite status. There was a time when leisure travelers did mileage runs to earn status completely. While that’s largely in the past because elite status itself isn’t as valuable as it once was, if you were going to fly 95,000 miles on business during the year then it often made sense to take an extra 5000 mile trip to get over the 100,000 mile hump. That’s because the 100,000 mile status level was worth that much more than 75,000 mile status, and the extra benefits would be useful over that whole next year.

When I spoke to United’s Vice President of Loyalty Luc Bondar about United’s move to revenue-based elite status he mentioned the end of the end of year mileage run.

  • He talked about the program no longer rewarding those who spent very little, as little as possible, to earn status. However that went out several years ago with the introduction of minimum spending requirements for status. Just a year ago United increased its minimum spend requirement for 1K status to $15,000.

  • He talked about no more end of year trips for status. But that’s not true at all with the new program – they just replace long distance trips for short segment runs. If you need a couple of flight segments for status, you’ll fly Houston – Dallas instead of Houston – Tokyo, or you’ll cram as many segments into a trip as possible (Washington Dulles – Pittsburgh – Chicago O’Hare – Kansas City – Houston and back) or you’ll go on a qualifying dollar run using a cheap partner business class fare.

There’s this notion that someone, somewhere might be getting real (‘excess’) value from a program – more than they deserve – and that this must be stopped at all costs!

It’s worth remembering how United used to think about mileage runs, and mileage runners. Randy Petersen held a chat on FlyerTalk with United program executives in 2001. Here’s what they said.

Randy Petersen Ohhhh, good question…..

Robert Sahadevan It’s allowed in the program. Have at it!!!!!!

Randy Petersen Straight from the boss….. I guess that’s an endorsement to fly….

Jim Davidovich We appreciate loyal customers!!!!!

Several years ago, before United CEO Jeff Smisek insisted that MileagePlus go revenue-based, one of the program’s managing directors laid out the reasons why the wallet share of lower revenue frequent flyers is important to the program and the airline. (Incidentally he’s now a Vice President at Alaska.)

  • A flyer may buy one expensive ticket because you are the only airline who flies non-stop on the route. Does it make sense to reward them? You’re essentially just lighting money on fire giving them rewards if they’re going to pick your airline anyway.

  • In general a high revenue passenger is probably better for an airline than a low fare one. But a high fare passenger may trade off with another high fare passenger (for instance they both buy the last seat available on a flight). That high fare customer wouldn’t actually be profitable in an economic sense (opportunity cost basis).

  • On the other hand a low fare passenger may fill empty seats and be pure profit – or they may ultimately displace a high fare passenger and be very costly if the airline didn’t get their revenue management right.

  • Low fare customers may also engage with an airline’s ancillary products. Base airfare isn’t the only contribution to revenue that matters, and other products are often higher margin than the actual airline seat.

  • Meanwhile third party partner customers are profitable too. A member who carries an airline’s credit card and uses it, credits points for their non-air travel to the program, and uses their shopping portal may be a highly profitable customer.

  • The program needs to try to influence incremental business. You may reward a high spend customer but not get additional business you wouldn’t have otherwise have gotten. But you might be able to move the needle with some of your other customer segments.

Do you remember when people felt so attached to an airline brand that they paid more money to spend extra time flying, just to demonstrate enough loyalty for when they’d fly in the coming year? It’s hard to say there hasn’t been something lost.

About Gary Leff

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 »

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Comments

  1. I get pumping up the dollar spend required (the other shoe dropping from the “positive” PointsPlus change)
    I get eliminating the foreign address loophole (though you dropped a key reason to stay loyal to United)

    But the 54 segment thing is just punitive and stupid IMO – eliminating miles as a criterion already helped out the EWR/IAH short haul high CPM types

  2. I’ve continuously had elite status on airlines for 30 years now, but I find it hard to believe that anyone would exert much effort these days to achieve this status. The cost v. benefit ratio is horrific. In the “old days,” it was relatively easy and straightforward to earn the status, and the benefits were great. The world is a very different place these days. For example, as a UA 1K, I can’t even get an advance coach seat assignment (yet alone one with extra legroom) if I buy certain cheapo fares. That’s nuts, so why should anyone bother? Just look for cheap, nonstop flights with the comfort you feel you need, and don’t worry about status. If you “need” status, get it at hotels with a credit card. That still makes sense.

  3. The person behind this move obviously has a bean counter mentality and not the faintest clue about customer loyalty. Sounds a lot like Scott Kirby.

  4. United really ruined it’s loyalty program. They are expecting higher spend for no new benefits? Dream on. There are other airlines and many will speak with their wallets.

  5. I am really curious what the current split of 1Ks is that have between 18k-24k dollars but do not have the segments and wonder in 2021 what % of 1Ks will qualify w/ or w/o the segments. I think the majority will only hit the higher spend. In my mind this should really be billed as 24k status now with a 6k waiver if you meet the segment threshold.

  6. for those of us who can make the new requirements for 2021 and are already above $18k spend a year, it’s going to be a golden era to be a 1k.
    Just Imagine all your waitlisted global upgrades actually clearing on the flights you actually want!

    Essentially these changes reduce the 1k program to way fewer people, who will have a much better time. How often has it been said that it’s worthless because the upgrades don’t clear? At times I’ve been on place 25 on the upgrade waiting list — as a 1k!

    The 54 segment thing is not easy, but it does count all partner segments, and you can always choose a few more itineraries with layovers if you are short. Getting to 100k miles as cheaply as possible was also challenging sometimes, this is just a new kind of game.

  7. By the way, the fact that they made it 54 (such a strange number to pick) instead of 50 tells me that there are tons of 1ks who manage just about 50, but that way fewer reach 54… And that so few reach 60 that they decided it was too much.
    When I looked over my segment counts from past years, I reached high forties every single year and often over 50, but rarely over 54.

  8. “The program needs to try to influence incremental business.”

    BINGO

    The new system, to a certain extent, rewards folks who are spending their own money or spending money of employers who do not have contracted fares.

    For example, US gov’t employees in DCwho need to get to SFO this fiscal year pretty much HAVE to fly UA at negotiated rates as low as $332 on way for a full Y fare. They are not “loyal” to UA; their business is not incremental, as that federal traveler has a tough time justifying anything else. Nor is this a screed against the government – corporate travelers who are with enterprise that have contracts (ones that are similarly discounted for last-minute-fully-refundable travel) with UA bring no incremental traffic.

    These people, whether government or private are not choosing UA out of loyalty – they are stuck with UA already. The trus incremental dollars are from travelers who are not stuck with UA, but nevertheless choose UA.

  9. Let’s face it, this new world of FF/loyalty programs is for the 1% who are at the upper echelons of corporations holding corporate accounts, not for the individual traveler. So unless you’ve been flying for decades and managed to lock into one or another tier of lifetime status, the game is over. Travel by air will no longer be attractive as you join the masses squeezed into E- back cabins, zone 7 boarding and no overhead space. As for premium cabin “free flights”, it’s spend spend spend and churn churn churn on your airline affiliated credit card(s)!

  10. As someone who frequently travels last minute and can easily top 70-80 segments in a slow year, I’m excited for the chance to finally get 1K instead of platinum (as all flights are domestic to even 90 segments barely gets me 75,000.)

  11. I have the opposite issue with American. I actually like their program and do the spend very easily flying long haul for work. But find it hard to get the eqms or segments. Two or three trips to Hk or London a year and you can reach executive platinum paid. But the eqms are ridiculous. I’d say why not just have a spend way to reach status.

  12. “Several years ago” there was no Spirit or Frontier or Sun Country, so it made a bit more sense to reward the price-sensitive flyer, because he or she could spill over. Now, not so much — the bottom feeder who takes United does so accidentally, otherwise you’ll see him/her on Spirit, Frontier or Sun Country.

    It makes more sense for the program to influence incremental business from profitable customers than from price-sensitive (unprofitable) ones.

  13. I’ve been 1K for many years and am ticked off that suddenly the spend to achieve 1K has increased by 20% in just one year. REALLY ticked off.

  14. @Gus – the number 54 is purely mathematical. They are requiring 4/8/12/18 [16+2]K spend, so incrementally it’s 12/24/36/54 [48+6] segments, it’s 1.5x the previous level for 1K instead of 1x. They are going for the similar effect of DL Diamond incremental achievement.

  15. I have shaved 50-100k miles off travel this year, with giving up 1k United. Life is much better. Perhaps the benefit of UA’s policy will be to dissuade flyers from flying needlessly.

  16. Am a 1K and could care less about these changes as I just don’t care that much about flying United anymore. Have total United Mileage Plus terms of service changes fatigue. Why invest the time to understand all these changes? They will only get worse next year.

    With the changes from two years ago I went from close to 100% United to 60% and this year to only 40%. All my booked business class tickets are with One World and Sky Team at fantastic rates in 2020. With the most recent announcements from United I feel vindicated and predict that only about 10% of my flights will be on United next year.

    Can’t understand how any business loosing 90%+ of revenue from a customer is a change they will like. But that’s their issue not mine.

    To all other 1Ks my recommendation is take a closer look at BA and KLMs programs if you want to diversify your status options. And in Star Turkish, Avianca, etc. You have plenty of options.

  17. Easy solution is to only rewards the spender, not the flyer. Give the spending entity, ie. a company, or a business a certain amount of 1k statuses for x spend. They can then distribute those statuses amongst their employees.

  18. Not sure quotes from circa 2001 United management are useful to illustrate how to run a viable program for the airline

    That said, was at a Premier flier event with someone senior from MileagePlus earlier this year – and that person, who was directly involved in these changes – said point blank the Flyertalk crowd is an enemy that is exploiting the airline at every avenue possible

  19. No one benefits from these changes to MileagePlus at all.

    The people UA is trying to please with these changes appear to be those who were spending big ***on premium cabins*** and not making 1K because they did not fly “far enough.” So, what will now happen is that those same folks who routinely purchased premium cabin tickets upfront and already flew in premium cabins will be the very same people who will be the only ones that will be able to afford to make 1K or Premier Platinum under the new rules. What that means is that United has effectively eliminated complimentary cabin upgrade as a meaningful elite benefit. The people (i.e., the “new” 1Ks and Plats) who will be getting the new upgrade points are already flying in premium cabins, so they won’t need to use their instruments to upgrade their own tickets. At the same time, in order to requalify for 1K or Platinum those same folks will be forced to keep paying for and flying in premium cabins. They have just hopped on the elite status treadmill, paying big bucks to make 1K or Plat, except that there is no reason for getting either elite status if one is already paying top dollars to fly upfront. It seems like their relatives are the ones that stand to benefit from sponsored upgrades!

    UA no longer has a loyalty program. MileagePlus can no longer be called a “frequent-flyer” or “mileage” program because elite status qualifications have been completely dissociated from distance flown, and cabin upgrades are no longer very meaningful to those who will now be entitled to them.

    I keep searching for the proverbial silver lining, but I cannot find anything that United gives in return for gutting their heretofore relatively decent and rewarding program.

  20. @DCS you are right. I’ve already noticed this by buying inexpensive business class tickets from all the major alliance carriers. Who cares about frequent flyer status or loyalty if you get all the perks of a too tied frequent flyer.

    What I’m kind of excited about is to fly more non-aligned carriers like Oman Air, Hainan, La Compagnie, with wheretocredit maybe the miles are useful but if not who cares. Most important is to hunt for great flights at the best price.

    How this benefits United I just don’t understand. But that’s the beauty of being a free agent: don’t have to.

  21. @EndlosLuft — Yup. I am now a free agent, so it’s: “Goodbye MileagePlus, hello KrisFlyer!” As a lifetime UA Premier Gold and *G, I will now fly with any *A carrier that gives me ‘best value’ and then I will credit all redeemable and status miles I derive from such flights to my SQ KrisFlyer account, where I will likely also achieve *G status…

  22. @DCS I think there are many travelers who fly premium cabins for work, then use the frequent flyer benefits when flying with their families. So it’s not necessarily the case that travelers who earn status with premium travel aren’t using the benefits.

    E+ at booking for 8 companions is huge for family travel. So is the ability to change or cancel award bookings for free.

  23. Brilliantly succinct observation, Mr. Gary. “..There’s this notion that someone, somewhere might be getting real (‘excess’) value from a program – more than they deserve – and that this must be stopped at all costs!..” I would go a step beyond the frequent flyer space and and (strongly) argue that this is the animating notion behind so much of the division in today’s society.

  24. @Adam — Care to hazard a guess as to how many of those there are? In fact, I suspect that such folks would likely be the exception that affirms the rule, and their numbers would be so limited as not to be a big factor in the scheme of things.

  25. I thought that conventional wisdom considered this to be a common type of frequent flyer, but I have no data myself. Do you, or might Gary?

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