United Airlines’ decision to count spending on partner flights only on tickets issued by United for purposes of earning elite status marks a fundamental blow to the concept of airline alliances, undermining its Star Alliance partners and begging the question, will airline alliances soon be nothing more than marketing gimmicks?
We run into the following predicament: say Lufthansa is running a sale and I buy a business class ticket from Frankfurt to Los Angeles from the German carrier for $2,500. The routing is Frankfurt-Chicago-Los Angeles and back the same way and Frankfurt-Chicago-Frankfurt is operated by Lufthansa and Chicago-Los Angeles-Chicago is operated by United. Despite being Star Alliance codeshare partners and A++ joint venture partners (they share revenue on these flights), the price of the whole ticket would not count toward my minimum spending requirement because it would be issued on Lufthansa (220) stock rather than United (016) stock. How United will prorate the cost of the Chicago-Los Angeles-Chicago (United operated) portions is a mystery to me.
Thus, United has now weaponized booking and balkanized loyalty in the Star Alliance. United has weaponized booking in trying to monopolize it, making it a condition for loyalty and essentially going to war with its partners for business, alliance partners that cannot be labeled purely as competitors like AA and Delta. And that is certainly United’s prerogative. But it undermines the implicit promise of the Star Alliance network, pursuing loyalty by siphoning revenue from other member carriers in a race to the bottom. Surely other carriers will follow.
If I were a CEO of one of the Star Alliance member carriers, I would ask United CEO Jeff Smisek to explain himself in front of everyone at the next CEB meeting. What if every carrier followed United’s lead? In the aggregate, it will drive away Star Alliance loyalty because consumers will be less incentivized to book with Star Alliance, even if the price is a bit more, knowing that the benefits are diluted. Paying an extra $100 for elite status + lounge access is a lot easier to stomach than paying $100 more only for lounge access…
What if Thai, Asiana, ANA, and new member EVA decide that if United will not “count” flights purchased on their ticket stock, they will no longer count flights booked on United ticket stock?Despite United’s notable Pacific route network out its Tokyo and Guam hubs, conscientious frequent flyers of these programs will scale back purchasing from United, opting instead for booking on their own carriers, who presumably would market their own flights more prominently than United codeshares. United thus looses revenue.
The problem is not that I won’t be able to qualify for 1K status next year. I may well be in Germany, which would exempt me from the requirement all together. The problem is United has unleashed a snowball that I fear will gain in intensity and size as other carriers contemplate retaliation. The result: the consumer is crushed, or at least in a position much worse off than before.
The “good” news is that there are rumors of a Star Alliance systemwide tool under development that would track spending in a uniform manner across Star Alliance. I have no inside information in this regard, but if it is the case, why doesn’t United wait until it is rolled out to implement its new revenue-based scheme? It is not far-fetched to wonder, for penny-wise, pound-foolish reasons, that even if such a tool becomes available United would still mandate partner tickets be issued on United stock in order to satisfy minimum spending requirements for elite qualification.
This is a sad chapter in the story of airline alliances, an indication that the future world of airline alliances will be limited to something like the three Ls—lounges, luggage, and logos. That’s not something to celebrate.
It isn’t a race to the bottom, but a race to the top. Mileage running game players can keep their fake Agean accounts, while the real frequent fliers and business travelers can finally enjoy service on UA comparable to SQ and LH, with fewer flyer talk fare hackers.
Booking class & distance (miles) should be sufficient to determine customer $$$ contribution, without the need to introduce PQ$ concept & penalizing partner use. Just give 100% (or more) PQM to M+ fares, perhaps better reward C/J/F/A at 200% PQMs, and bump qualifying elite thresholds to 50/75/100/125. Seems so much easier.
Um, if you read the FAQs, flights operated by UA will still count towards PQDs. They don’t say how they’ll do the allocation of the fare, but your central premise that everything must be ticketed on 016 stock seems incorrect.
The answer is a lot easier than it is being made out to be: UA wants to treat as “elite” only those who generate funds for the airline. They tried selling the attraction of earning elite status via its partners, and did not like the result, hence the change. Therefore your contention is invalid. Moreover, You can still earn PQM and RDM on these partners, but when rubber meets road, UA’s rules dictate you have to spend on them an amount commensurate with the benefits provided.
Several partners already have similar rules (KrisFlyer and PhoenixMiles, to name two), so I am not seeing this as an Alliance buster.
@Ruben: It is a race to the bottom, for the reasons I outlined above. Care to address those rather than positing who “real” frequent fliers are? First off, market conditions will prevent UA from ever emulating SQ and LH. Second, weeding out loyal frequent flyer (by definition, those who fly frequently…) who go out of their way to fly United will not help service. Those are the passengers who tend to go out of their way to be kind to crew members, which encourages them to treat all passengers better.
What’s the sad reality here is that in your example, the said flier would be accustomed to earning their United status points by buying the LH-issued ticket for United operated flights. “Phew, I’m flying United and I absolutely know I’ll get my United PQMs (and soon-to-be PQDs).”
The only reason they’d know otherwise on the PQD-front is if they followed the program changes as closely as we do. And who really does that?
Now granted, United would match the fare you present, but I agree that a flier (or person booking them) would have to know in advance which actual flight (the LH codeshare on UA, or the true UA metal) to book. Yes, availability in the sale fare bucket could be different, but you get my drift.
It is a shame for the United elites (and those who book their tickets) will now have to closely monitor which “flights” they book, even though they’re in the same alliance.
@Rob: I hope you are correct, but I have my doubts.
@Darren: So sad, even if all United flights (no matter the ticket stock number count)
The FAQs don’t state “most United tickets”, they state “most flights operated by UA/UAex/CM” with the following paragraph offering up the case that flights operated by UA/UAex/CM won’t count:
“Certain specialty tickets, including but not limited to unpublished, consolidator, group/tour, and opaque fares do not earn PQD.”
Delta did the same. Starting with their partnership with SPG, I can only get SPG points if the ENTIRE ticket is using Delta planes. For example, I flew to Europe MSP-AMS-GVA-AMS-MSP, since AMS-GVA-AMS was on KLM plane I got NOTHING for the SPG partnership.
I agree with Rob – the bullet points should be interpreted as the word “and,” or else the third bullet point (E+) would make no sense in context. Of course, it’s also possible that the people who wrote this are terrible communicators, so you never know…
@Rob, but those “unpublished, consolidator, group/tour, and opaque fares” can still be issued on United stock , as the other tickets.
I’ve reached out to UA for clarification.
United has long treated United metal flights differently than non-United metal flights: E-500 earning, lifetime status, and Global Services qualification/re-qual (although ISTR they also counted JV miles on LH for GS which would certainly be nice for PQD considering UA gets a cut of the revenue). Heck, you can only use CR1s and SWUs on a subset of alliance flights.
Lufthansa since September of last year has only counted LH Group (+ a small handful of airlines they have investments in, it looks like) premium cabin miles towards HON status.
Singapore counts only premium cabin revenue on Singapore and SilkAir flights towards PPS status.
Air Canada, Air China, Alaska, EgyptAir, South African, US Airways, and more on home metal for lifetime status.
Alaska also has easier status qualification if you’re on home metal versus partner metal.
AA for 500 miler upgrade earning.
There is a long tradition of FFPs treating flights on home metal as more valuable than flights not on home metal and used to qualify for more benefits. Once you’ve earned the benefits, the incentive is still there to use partners because you’ll receive benefits, just as it was before this announcement when it was quite easy to book fares on partners that would earn 0 EQM.
Your original supporting premise has been disproven, yet your point on the magnitude on the weakening of the alliance (“a fundamental blow”) is unchanged, which seems a bit disingenuous. Personally, I think Delta’s changes to partner earning (especially the Korean demotion) and the QANTAS/Emirates partnership being far more fundamental blows to alliances.
“I disagree, but I’m not going to tell you how I disagree”? Any chance you could pick just one to distinguish?
It’s already the case that you can fly a JV partner and not earn elite status (which I personally think is dumb, but I have no insight into how the heck the airlines negotiate all that stuff; all the JV inequality stuff boggles my mind…it’s metal neutral in ways that benefit the airlines, but definitely not metal neutral in ways that might benefit the consumer): try booking a T or L fare on Lufthansa within Europe and see how many EQM post. In fact, as currently written, if you book that T or L fare within Europe but on UA ticket stock, you might earn PQDs but not PQMs. Check out the Air Canada EQMs granted for their deep discount fares in MileagePlus within Canada and the US. Yes, this is an expansion of that, but the “fundamental gutting” happened long, long ago.
UPDATE: Aaron has confirmed, “Eligible flight segments operated by United, United Express and Copa Airlines count toward PQD even if on non-016 tickets.”
I’ve updated my post, but my prevailing point–the Alliance is weakened by this news–remains unchanged.
Per staralliance.com, the whole concept of Star Alliance was to assemble a group of airlines “to offer customers convenient worldwide reach and a smoother travel experience.” The front page of the benefits section lists out: “As the world’s first airline alliance, we work behind the scenes to constantly improve your travel experience.
Bringing you benefits to make your journey smoother and more relaxing. Extending our network to fly to new places where you’ll do business tomorrow. And creating ways to earn and redeem your miles, including our Star Alliance Upgrade Awards.” So it earning miles isn’t even the topmost or secondary benefit, and that still doesn’t mention earning status on another airline. It’s not until you dig into earning and redeeming miles that the website mentions earning gold status by flying on multiple airlines. I would argue then that based on Star Alliance’s own marketing, the most important facet of the alliance is easing the travel process, not earning elite status.
@Rob, Sorry, I disagree. I am not going to go through and distinguish each of your examples, though I believe they are all distinguishable (with the exception of Delta/Korea, which indeed is even worse).
When one cannot earn elite status in booking through a partner carrier, even a JV partner, a fundamental aspect of the Alliance partnership is gutted. You are free to disagree, but my LH/UA example above is a valid demonstration of why/how.
I think there is a difference between fare class–i.e. cheap fares don’t earn anything, which is seems perfectly valid to me and I am waiting for UA to do on N/G/K/L fares–and booking identical fare class on UA stock and earning PQD credit and, for example, TG stock and earning no credit, for the exact same flight!
That’s different than counting purchase toward special revenue-based HON or UGS programs that go beyond just achieving Star Gold status, counting flight miles toward million mile status, and earning bonus points on a carrier’s own metal.
The whole concept of Star Alliance was to assemble a group of airlines where in you fly on one carrier and you can earn points/status on another. Now this becomes much more difficult and United, as world’s largest airline, has severely hurt the Alliance through this move.
I don’t speak on behalf of Star Alliance, but I did work for the company–and I contend earning status on partner carriers is a fundamental part of the equation, making United’s actions a fundamental blow to the concept of airline alliances as we know them. It is not surprising that an organization dependent on United and subservient to its overwhelming share of size-based power has for some time highlighted other areas of the Alliance that will persist in a new world of increasingly weaponized booking and balkanized loyalty. It is just a shame that United is now leading the Alliance in a race to the bottom.
I’m done debating this topic.
“would have already begun an effort to highlight other areas of the Alliance”
Well, the text has existed on the Star Alliance website going back to at least 2006, so I guess they started the effort way early and the new world is at least 7 years old
Weaponized booking? Balkanized loyalty? I do not think those words mean what you think they mean. This change while unfortunate exists so that MileagePlus members are encouraged to spend money with United. That really isn’t a threat to Star Alliance. If any airline is a threat it’s Singapore and they are not going anywhere.
Matthew, you make incorrect statements (called-out by many above) and inappropriate accusations (“balkanization” and “weaponization”) and then say you’re “done debating this topic”?
Than why in the world are you a blogger and why did you write your blog post above? If you are not trying to stimulate discussion on a subject, then why and make said accusations?
colpuck, SQ is certainly a threat and I have called them out here for being poor alliance partners, but their relatively limited size compared to United makes them a smaller issue in my mind.
You are correct on United’s rationale, but when a LAX-NRT flight on NH booked on UA stock costs several hundred dollars more than the same ticket booked through NH, consumers are hurt and the Alliance is hurt.
I’ve expressed my viewpoint and explained it clearly. You’re free to disagree and comment away, but I am done debating.
ETA: Oh, it’s you…
Apparently, I’m not free to disagree and comment away. Personally, I’m disappointed that for someone who so strongly believes in freedom of speech, you censor comments that contain dissenting opinions. I don’t think I personally attacked you in any of my comments; if I gave that impression, I certainly apologize.
I had a comment that was awaiting moderation well before the earlier two above, that never got approved. If it disappeared due to technical difficulties, then my bad on the censorship claim.
Well, per Mike, it sounds like there was a technical issue and not moderation that prevented my earlier comment from posting. Sorry about saying that you were censoring comments.
Rob, as long as there is no vulgarity, excess profanity, or spam, every comment is approved.
So looking now, when I posted my comment #19 (before the difficulties prevented it from actually being posted on time – thankfully Mike was able to reconstruct it from his e-mail stream of comments), the quoted text I had was in your comment #18, but no longer is.
@Rob–I do edit posts and my own comments based upon feedback from others, primarily in order to clarify, but I again emphasize that all comments are approved and unedited unless they contain vulgarity, excess profanity, or spam. Your comment certainly would have been approved and I clarified my earlier comment based on your very fair comment.
I think you hit the nail on the head Matthew: the problem will be that a UA-coded ticket on a given flight (especially international) is often significantly more expensive than a partner-coded ticket on the same flight. For me, that means that I might have to pay a lot more for the ticket in order to earn PQ$. Since almost all of my travel is on business and paid for by my employer, I won’t have the freedom to choose a UA flight number when the partner’s flight number is hundreds (or thousands) of dollars less expensive. This seems to spell the end of Premier status for me, since I’ll never get there with the handful of domestic UA-coded flights that I fly annually.
Many if not most alliance partner flights cannot be booked on the United website. They are just not displayed when you search for them. This means there is no way to get United mileage credit for some flights on, say, Turkish airlines.
Ian, it is true that partner space can be hard to book, but it is possible (I booked JNB-IST-ZRH on united.com, all on Turkish as a revenue ticket) and can always be accomplished over the phone.
This is the exact problem I am facing. I will travel to Seattle to Vietnam multiple times this year, most of them on Star Alliance partner EVA. The United routes to Vietnam are inconvenient and expensive. I will be racking over 1K in miles easily, but will not qualify for 1K status because the ticket is issued on EVA, not United.
I have, quite literally, gone out of my way to be loyal to United all these years and enjoy the premier status benefits. I guess this is the year that I make the switch to EVA’s frequent flier program.
The bummer is that it means no more free upgrades on United for flights state to state, which I gotta say, I enjoyed. I frequently booked my monthly trip to San Francisco on United, not because it was cheaper, but because I knew I’d probably get bumped to business class. Now there is absolutely no incentive to book these short legs on United, because even if I booked 20 economy class trips this year, I still wouldn’t get to a decent premier level. Guess I’m switching to Southwest for the domestic flights.
United Star Alliance partners: did you know that it’s no longer possible to see the points accrual if you book discount economy on any star alliance partner airline. Until very recently you could choose to book your flight and know whether or not you would earn points. Now it’s totally impossible. While they list elsewhere on their site the various categories which will earn points, there’s a vast unknown of “others” which don’t earn points and which can’t be discerned at booking. I know this sounds complex……and I did not succeed in explaining it to a series of United personnel (or they were very good at pretending not to understand)but it makes booking on their partners a fishing expedition and very problematic for someone trying to earn points.
Thanks for writing. I’m just now encountering this issue myself. The point of confusion in this debate is that this really isn’t a business decision. By establishing a loyalty program, they have stepped out of the realm of cold business and made it personal. That is why personal outrage is an appropriate response. They smile and pretend to want our loyalty, but look for every little excuse not to reward it.
The reality is the alliance as it is should not exist. United belongs in the class of Air Asia, Scoot and Tiger. The current alliance only highlights the contrast between members such as United and the very much better Asian carriers. With such abysmal service, United should be enhancing the chance of members to reach higher status. Let’s face it with the service United offers, bribes are the only way to go. The new policy is tantamount to threatening Frequent flyer customer “alleged” allegiance to hold them. In this case I would have thought that carrots would work better than sticks. In any case, as accountants seem to be making the decisions – in the support of short term gains and not long term benefits to the company, it is inevitable that United will in the long run bleed customers, many who have been loyal for decades. A shame yes – that a formerly good company should come to this.