United is Trying to Sell Customers on How Great Their Mileage-Earning Is. Don’t Believe It.

I got an email from United yesterday telling me that this year’s new revenue-based mileage earning program is great because on a recent expensive short flight I earned an extra 456 miles.

This was the pitch:

You spend more with us, so we want to reward you more

Because you are earning miles based on the fare you pay¹ instead of the distance you travel², your award miles can add up quickly. On your flight to […] on […], 2015, you earned 456 more award miles than you would have if you had taken this flight under our old program. All MileagePlus® members now earn 5 award miles per dollar spent for flights on United® and United Express®.

United now awards miles based on spending.

It doesn’t matter whether United has a corporate contract, or the only non-stop flight on an obscure route, or was the only airline available. They aren’t going to reward an incremental decision to actually fly United over a competitor. They are just going to tally the amount you spend with United (even if you would have spent that money anyway) and dole out a rebate on that basis.

But that doesn’t mean you earn more miles and it doesn’t mean the average customer earns more miles. It does mean that expensive short flights earn more miles than before.

United has a revenue-based system for elite qualification: you have to spend a minimum of 12.5 cents per mile when flying 25,000, 50,000, 75,000 or 100,000 miles to qualify for elite status. But to break even with mileage earning you need to spend around 20 cents per mile.

At current average fares a member would earn 20% fewer miles than they would under the old system. And fares are falling.

This email, though, tells me that United thinks its customers don’t believe the new model is a good one and they need to do some selling — by emailing those that are coming out ahead about specific flights where that happened. They should probably do that, though a few hundred miles isn’t going to excite me and of course I know how far behind I came out when they devalued the miles that I’m earning.

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. This is why I’m glad to have a non-US address on record with United. I do US–> Middle East once a month and although my spend isn’t near qualifying, my PQMs are for 1K.

  2. They must have gotten their MBA at PT Barnum school of Mushroom Management.

    Could this be good news? They’re finally seeing effects of deval on their bottom line and scrambling to do damage control?

  3. I am earning a lot more miles this year than last year, because I fly a lot of expensive domestic trips. Earning based on distance was arbitrary to begin with.
    And, it is fairer to reward based on spend, as it then translates roughly into a 20% rebate for me (since I value the points at slightly less than 2 cents a mile, and get 11 miles per dollar spent)
    By the way, since elites earn so many more miles (a 1k earns 11 miles per dollar as opposed to just 5 for a regular member) the incentive to stick to the same airline is still there.

  4. I am definitely earning more miles than before, and I fly on mid-priced tickets as a 1K. However, with pricing for partners having gone up, in the end I am at a loss, but I would be the same with most programs.

  5. Odd, I haven’t received an email like that all year. Perhaps because I am earning between a third and half the miles I earned last year for the same trips. It actually works out fine because I am taking between a third and half as many flights with United as I did last year, so I guess we both have figured out how well their loyalty program is working.

  6. As much as I hate changes made (by Continental…oops …I mean the new management) to United’s MP program; I have to say that I am also earning MORE miles on my long-haul USA – EUROPE trips.

    For example a roundtrip Business Ticket SFO – FRA used to yield me 11.400 miles + Business 50% bonus resulting in 17,000 miles. Now that same ticket (based on a $3k price) nets me around 25,000 miles.

    One thing I dislike is that prior to the changes, when booking on Star Alliance carriers, you got essentially the same mileage accrual as on a United booked ticket. Now however, it’s strictly based on miles flown/distance. Furthermore, if booking a ticket on United which includes a Star Alliance partner (i.e. Swiss, Lufthansa), you can’t pre-select your seats – even if booking FIrst or Business. Odd thing is that if booking on Lufthansa or SWISS and flight include a UNited operated flight – you can pre-select the seats…sounds like an odd disconnect !

  7. The math on a recent UA SFO-SEA flight. 460 miles today versus ~660 before.

    I’ll stick to AS and get my ~1,320 miles (with status bonuses).

  8. I fly out of SFO and was a United elite for years. With all of the recent changes I don’t care about status in the same way anymore. They have gutted the program on both the earning and spending sides. I used to have quite a high degree of loyalty to United because flying with them (when of course there were better airlines) was worth it because of the rewards. For me this is no longer true.

    Personally I’m in a bid to use up my miles before they inevitably devalue again and so I don’t currently have status, I’m flying on a whole variety of different airline and no longer feel a need to stick with United, it’s no longer worth it for me. I earned a ridiculously small number of miles on a recent cross country flight. For us it’s now all about credit card mile and banking miles.

    Yes, United does think we’re stupid.

  9. When you pay over $3K for an so called deep discount economy N class SFO-PEK ticket that would used to earn only 50% miles, then yes, the new program is better.

  10. Well, at least they are showing an interest and thinking about how to sell the changes they have made. I recently suggested to United that they change the name of their program from a “Loyalty” program to a “Rewards” program the more you spend, the more status you have regardless of how much you fly. The program no longer has anything to do with loyalty, at least from the United side. I hope the new guy turns things around.

  11. United, like Delta, has recognized that it should be rewarding loyalty based on how much one spends with the airline rather than how far one flies. Blogs like this and many others encouraged people to take advantage of loyalty recognition–via earned miles and elite status–by flying long routes when they were cheaper, thereby stacking the deck against the airline. Now, as is always the case, the airlines have restacked the deck in their favor…and in the favor of those who actually are their most important customers.

    All this bellyaching and whining is just rhetorical nonsense. We had it good for many, many years. Now the airlines finally have caught on. Rewarding customers better who pay the most money to the airline is just good business and common sense, and anyone who disagrees is an idiot.

    American is the only major airline that doesn’t have a revenue based earning/elite loyalty system, and that is likely to change in the coming year. Or, if you think American is better in that regard, stop whining and switch to American. Otherwise, suck it up.

  12. I’m not sure anyone is whining. They changed the format and many of us are changing are our behavior in response, e.g. choosing different airlines or burning mile..
    I agree with the assessment that it’s clearly a rewards program for higher spenders vs the loyalty program it was. No whining just a new reality.

  13. There is a relationship between flying a lot and flying a lot of miles. If you are already flying business class then you probably don’t need an upgrade. My industry is required to follow the government Joint Travel Regulations that require flying the lowest available fare. I fly 120 to 150,000 miles a year and I have seen my upgrade rate drop to below 15%, even using my regional and global upgrades. I lose upgrade coupons every year that are not honored. As a permanent Gold, my only real perks are boarding in group 1 rather than group 2 as a 1K and a $100 discount on my club membership. Before Jeff took over I boarded with the Global Service members, so boarding with group 1 is actually a downgrade. The rest of the benefits are still on the chart, but are seldom honored. Benefits have evaporated despite the criteria for 1K being raised each year. It’s a sucker bet to pay more for an up-gradable ticket when upgrades are honored at such a low rate. I’ve seen Global Service member”s secretaries get upgraded over them because it was a last minute Y class purchase despite having no status at all. That is what revenue based upgrades result in, rewarding poor planning while screwing the remaining road warriors.

  14. This reminds me why I don’t fly United any more. Both their miles and elite programs are now sucker’s bets.

  15. Don’t UA realize that business customers also fly personally with their families? Their major rewards program change earlier this year only further benefited GS (typically $40K-$50K+) and some 1K (who were loyal anyway). I’m currently 1K and I marginally get less rewards miles but my family get far less. Hopefully with a new CEO they will rethink their whole rewards program (the old one was much better). I’ll probably be 1K next year but I’m positioning to make an easy transition to AA (for US Domestic) for 2017 and over to one world. I was totally loyal to UA before they made that major rewards change.

  16. @bill – who is whining ?!? Sounds more to me like smart people adjusting their behavior – maybe you are projecting here. Speaking of “loyalty”, I now have it in abundance – for AA. As long as they continue to keep differentiating themselves by not making policies based on what Delta is doing, they will have a competitive advantage that no other U.S. major does and I’m happy to reward them with my business For that. “But revenue models are inevitable” cry the airline sheep. We’ll see about that …

  17. 2 thoughts:

    1) Last year I made million mile (Elite Gold for life), now I can fly Swiss or Singapore or any of the other better quality Star Alliance partners and not worry about my Elite status requirements per year on United.

    2) There is a school of thought that there are too many elites….and this is one way to thin out the herd – not that I agree – but it is what it is. As a previous comment says – air travel has changed in recent years. Especially with the LCC’s and their fare models. Added to that are the travel sites like Expedia etc. The airlines want to reward their most frequent fliers who at the same time spend money on tickets. As much as I hate the new rules – I understand the reasoning behind it.

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