United today announced what everyone already knew (or at least expected to a 98% approximation), that the surviving frequent flyer program in the United-Continental merger would be called Mileage Plus, and not Onepass. Mileage Plus was the larger program and significantly more brand value that they couldn’t walk away from. It would have been silly to create an entirely new name, as well.
Lots of little details to be ironed out in the merger, and I provided an update over the weekend on much of what we know.
United’s posting to Milepoint by Scott O’Leary mentions several outstanding issues still to come. Perhaps the biggest unanswered question not listed is whether the new program will engage in Starnet blocking.
For those unfamiliar, this is the practice whereby Mileage Plus programmed its computers to say that award seats weren’t available even when United’s Star Alliance partners were offering them those seats. Mileage Plus did this when it didn’t want to pay for the seats. Roughly speaking, Mileage Plus would set a budget for each partner for the quarter, they would have some blocking of award seats at the beginning of a quarter in order to prevent themselves from running out of planned spend on partners. As they used up their allotted money, they would tighten blocking. Lufthansa was the most-blocked partner, when blocking was in place you could almost never get a Lufthansa premium cabin award seat, despite Lufthansa offering those seats to all of their partners. But it wasn’t limited to Lufthansa. In its early forms, United’s system would usually just not return even the existence of the flight. Which led to surreal conversations with agents like “Lufthansa doesn’t fly to Frankfurt” and “ANA doesn’t serve Washington DC” (and I’d be like, “It’s called ANA Flight 1 and I attended the party to celebrate 20 years of service.”)
For a long time United was the only Star Alliance carrier engaging in the practice. Currently there’s some confusion about what is going on at US AIrways mostly with Lufthansa first class transatlantic award space. Some speculate it’s blocking, though it’s equally plausibly an AVS synch issue with their reservations system. One imagines though that US AIrways rather likes this problem and hasn’t acted to fix it, in fact they’ve instructed their agents not to manually sell the award space (which is a way to circumvent the problem).
Anyway, Starnet blocking led to agents unintentionally (on the part of the agents, though likely intentionally on the part of Mileage Plus) lying to customers. They would tell customers that the partner airline wasn’t offering seats to United, and that each partner allocates a certain number of seats to each Star Alliance member. Neither of those statements were quite true. The seats would be offered to United, United just wouldn’t book the seats. A manual sell of the award space would confirm this, but of course United then began threatening their agents to prevent them from doing manual sells. (Some carriers do offer their own members additional seats, eg Lufthansa and Swiss offer extra availability to Miles & More members and Singapore offers additional seats to Krisflyer members, and also strangely to Miles & More members.)
When Continental joined Star Alliance Scott O’Leary went on the Upgrd Podcast for an interview in which he stated that Continental doesn’t believe in award seat blocking, and promising that they would roll out an award chart which was ‘realistic’ enough to allow them not to block award inventory.
Of course, what we wound up getting for both United and Continental was this new ‘realistic’ award chart. And they recently adjusted the chart again, just a few weeks ago, so hopefully that chart remains one they can live with sans blocking.
Now, I also understand that Continental has seen higher redemption costs than they had expected when joining Star Alliance, but certainly on net the benefits outweigh the costs. And they still believe in being honest with their customers, as Scott promised they would when Continental joined Star.
When I posted on this on Milepoint, Wandering Aramean took issue with my claim that this issue is a big deal for many members and how they perceive the program. Presumably his take is that it’s sufficiently esoteric as to not reach the radar of most of the program’s combined 70 million or so members. I disagree. First, because it materially affects their award redemption experience and that’s the touch point when members really determine their long-term relationship to a program. A good reward experience heightens loyalty and future engagement while a frustrating experience turns them off to the program. Second, because the folks who will base their opinions directly on the issue of ‘starnet blocking’ are thought leaders, are influencers, and are vocal in public fora, and will have a disproportionate impact on the reputation of the program which will reverberate across many more members than their numbers alone indicate.
This is a “big deal.”
If anyone from United reads this, I’d like them to know that I’m one of many customers who will base my future alliance favoritism primarily on whether United/Continental chooses to continue with starnet blocking.
If the blogosphere shows it to continue, I’ll shift my focus entirely to BA and AA, which I have found are very easy to work with on partner redemptions.
Don’t be stupid, United/Continental.
Great article. I’d like to know if starnet blocking occurs on other Star Alliance carriers and if this practice has been noted on One World or SkyTeam carriers?
I too would take my business elsewhere if Starnet blocking continues. I don’t think United realizes that if their first class product was top notch, such as Lufthansa and Singapore Airlines, it’s customers would not look elsewhere.
I would happily fly United First Class if it wasn’t so crappy, especially compared to others.
I shifted mileage collection from CO to AP when I first heard about the merger due to *net blocking. I certainly wouldn’t come back until/unless *net blocking is confirmed to have gone away.
I’ve been blocked from too many seats, it made Mileage Plus miles almost worthless for my needs. You’re completely correct Gary, this is a big deal.
Thanks for your vigilance in keeping Starnet blocking frontburner issue.
Be careful in assuming AA/BA is a viable alternative. They might not have blocking, but they have fuel surcharges. I have an upcoming USA-Middle East ticket in F, using AA miles. I was charged $649 ONE WAY for the privilege of using my miles. My return is on LH F using UA miles. I was charged $72.
When I use AA/BA to Europe, I have to flip my mentality. I have to think as though I am paying for coach and using my points to upgrade to F. With UA, I feel as though I am genuinely getting a free ticket.
Gary thank’s for the honesty. Is U.S. Air still StarNet blocking premium cabin award space on Star Alliance carriers?
@John the major US Airways problem is Lufthansa first class transatlantic.
I left United years ago as a 1k when award availabilty was sinking to new lows on their own metal.When I considered leaving One World and saw what they had done with Starnet blocking I banked in other Star Partners keeping with my primary carrier in One World.I will never return to United if they continue their death wish Starnet blocking.Being a bigger carrier isn’t better just because they can.I flew 500,000 approx rev miles with them in the past and I am clearly watching and that of everyone else I know worth their weight as a frequent traveler.Many of us are betting United to become the next Delta which equals a deflated an unimportant or less desirable currency
I hope folks are wrong as it would be great to fly UA again if they get it right
Gary,
This is the biggest unresolved merger issued for me. I have been a loyal CO flier & OP member for a number of years. My OP balance is hundreds of thousands of miles. I often pay a little more for CO/UA flights instead of the B6 option, but I know in the end it’ll be worth it when I redeem for a *A F award with the wife. If the new MP *net blocks, I will no longer see the longer term value. This single decision will decide my loyalty post-merger completion.
GREAT ARTICLE , JUST SOME OF MY SAME THOUGHTS AND I AGREE WITH YOU.
I HOPE THEY FOLLOW CO –IF THEY BLOCK ,I WALK—A.A. B.A. WILL WORK FOR ME JUST FINE ( EVEN DELTA MAY WORK ) , YES IT MAY COST SOME $ BUT AT LEAST I CAN FIND A SEAT.
I started heavy business travel a couple of years back. Before starting i did my research and STARNET BLOCKING the biggest factor for not opting for United. What use are all the miles if you cant use them easily. Also, if a frequent flyer does not care about his miles, he wont have a FF account in first place….reminds of of this guy i met once flying….flys 200k miles a year in J/F and did not care about EXP as he is booked in J anyways!!
I ended up going with one world and i have been happy (Yes there are ways to avoid flying through london and avoid fuel surcharges!!)
Thanks for raising the issue. I hope the merger removes starnet blocking, so that i can use United as my second carrier instead of dreaded delta!!
Just to echo the comments above – I’ve purposely avoided crediting ANY AND ALL miles to Mileage Plus OR Continental because this issue is still up in the air. I’ve instead redirected them to other Star Alliance members — and NOT the domestic trio (soon to be duo) that engages in any sort of blocking (that trio being US Airways, United, Continental — even if Continental supposedly didn’t/doesn’t). In the meantime, United is simply hurting itself by keeping mum about whether it will adopt it (and will hurt itself further if it continues the practice post-merger). And I assure you, I’m NOT the only avoiding Mileage Plus/OnePass entirely.
And as a P.S., I’m transferred my miles from Mileage Plus to OnePass and am trying to burn through them ASAP so that if the inevitable comes to pass, I’ll simply be able to cut UA/CO out of my frequent flyer life completely.
I really like how I can easily book partner awards on continental.com. Not so much on United. What are the chances United will adopt Continental’s booking software? It should be best of both worlds, right?
Not a decenter but, I recently booked 2 one way tix using UA miles on partner airlines from CMB (Columbo Sri Lanka)/BKK/ICN/JFK in business.
*A blocking is by far the single biggest issue that I have with MP. It is the reason I do not direct any credit card spend to UA or CO cards. However equally bad is UA’s failure to release any C saver seats to certain destinations (e.g. USA-Australia) until very close to ETD, if at all. This is equally deceptive – advertising the award on your chart but not delivering it.
If UA continues to engage in this deceptive practice I think many customers will simply choose to accumulate miles in other *A programs, even when they fly UA. Or maybe simply choose to fly other carriers like VS who offer a better product and a more honest FF program.