United Airlines has not yet announced any program changes to MileagePlus for next year. Perhaps it is waiting a bit longer for the dust to settle at Delta Air Lines before making any adjustments to its own program, which is a wise move. United stands well-positioned to attract disgruntled Delta passengers on the margin, many of whom are quite valuable in terms of spending but do expect a bit more in exchange for loyalty than Delta appears willing to offer. Here’s my blueprint for how United can address realistic market pressures while still crafting a valuable MileagePlus program for travelers and credit card holders.
A Blueprint For The Next Chapter Of United MileagePlus
I start with a concession of the overall logic that seems to have driven Delta’s radical program changes: if everyone is elite, no one is elite. That is true.
We don’t have access to raw numbers at Delta or United, but Delta CEO Ed Bastian claimed that the number of top-tier Delta Diamonds has doubled since 2019. I still find that hard to believe, but if there are so many top-tier elites that the benefits (such as upgrades or even extra legroom seating) become elusive, there is reason to question the need for loyalty in the first place. This is especially true when United and Delta have jettisoned change fees on all but basic economy tickets and when United no longer charges for award ticket changes or redeposits.
Bastian claimed that Delta erred in “ripping the band-aid off” but the implication is that there is no remorse about the changes themselves, only the speed in which they were foisted on SkyMiles members. I’ve already explained why these changes present such a missed opportunity for Delta flyers at the margin and may not even alleviate the bottlenecks in lounges that have vexed Delta flyers for years at busy hubs like New York JFK.
Delta’s high bar for elite status essentially requires you to buy premium cabin tickets to eventually obtain status. But when you buy those tickets, you already enjoy many of the elite perks without needing the actual elite status. United should avoid this mistake by crafting a program that sees loyalty as multi-dimensional and rewards not only high spending, but those passengers who go out of their way to travel on United. Practically, that means miles or segments flown should still matter. Upgrades still matter too.
Operational Reliability Is Key, But Upgrades And Award Redemptions Matter. These Are At The Heart Of Top-Tier Loyalty
At the baseline, United must continue to focus on operational reliability. This is so fundamental and it forms the foundation for everything else I will discuss below. No matter how great the MileagePlus program may be, United will not win loyalty if it cannot operate on-time.
But operational reliability alone is not enough, especially for shrewd frequent flyers who are looking for value in an airline loyalty program.
I am a 1K traveler on United Airlines and fly a lot. My upgrade ratio this year has been strong. I’ve purchased a lot of premium cabin tickets outright, but when I do attempt to upgrade I have been largely successful. On several transcontinental routes I have found myself at or near the top of the waitlist when PlusPoints are applied and have a perfect record when it comes to international upgrades.
Upgrades matter. United, like other US carriers, has done well in monetizing its premium cabins, but upgrades are still possible and that is a big loyalty driver for discerning passengers. I would not buy so many paid premium tickets if I could not occasionally upgrade when I buy economy class tickets.
While these days I find the Aeroplan program to be more valuable than MileagePlus on the redemption side, MileagePlus still maintains value and that value along with the efficacy of PlusPoints drives my loyalty to United, even when United is the more expensive option. I’ll end the year spending over $15,000 on United…hardly chump change.
While not as valuable as the folks blowing $10K on a single trip or spending thousands of dollars by virtue of their corporate contract, I have a choice…and I choose United.
So rather than raise the bar to $35,000 for 1K status (as Delta did for Diamonds), I think United should maintain current spending thresholds, but bring back higher mileage requirements (put the mileage back in MileagePlus…). Yes, you still need to spend $20,000 to reach 1K status, but if you do it on a single ticket you are simply not as loyal as someone who does it over dozens and dozens of flights. Keep the thresholds as is or raise them slightly, but add a much higher mandatory segment or mileage requirement because the people buying a couple expensive tickets each year and thereby gaining status are not in need of elite status.
Practically, this would thin out the elite herds but it would make elite status more attainable for those willing to demonstrate their loyalty not just in terms of dollars spent, but distance or frequency traveled. Both matter when looking beyond a single transaction.
But freezing current status thresholds alone is not enough.
Five Ways United Airlines Can Grow The Value Of MileagePlus Without Giving Away The Farm
MileagePlus and United Airlines were not always the same company, though their fortunes were closely related. Now under the same roof, the health of MileagePlus is critical to the health of United. Delta wants you to spend hundreds of thousands of dollars on your American Express co-branded cards, but fails to offer meaningful value for doing so when the tradeoffs are considered. Delta also rewards your loyalty by charging an obscene premium for front-cabin redemptions compared to American Airlines or United. United could chart a different path.
#1: Offer A Truly Compelling Credit Card That Outshines Flexible Currency Alternatives
We’ve seen some lucrative card offers recently for MileagePlus co-branded credit cards with Chase. I’m not interested, though. There isn’t the trust left for me to keep a nest egg of miles in my United account. Instead, I insist upon placing spending on cards which earn flexible points like American Express Membership Rewards or Chase Ultimate Rewards (or lately, more cashback cards).
I’m hardly alone and that is a problem United must reckon with. While the market is not fully saturated (there are still millions who have not signed up for airline credit cards who are eligible), I know of far too many friends, family members, and clients who are cutting up their cards. It’s not because they are ending their relationship with MileagePlus; it is because it just does not make sense to put spending on a United card if you are a savvy traveler.
And let’s be clear: it’s all about the credit card. The customer that matters most is not you or me, but Chase Bank. I mention that to note that perhaps our only leverage, as concerned customers, going forward is to place pressure on Chase.
So my first suggestion would be to continue to work with Chase to create a compelling card product that actually is more valuable than the Chase Sapphire Preferred or Reserve to savvy United flyers. And I don’t just mean a card to hold, like the United Club card because it is cheaper than annual United Club membership, but a card to actually put spending on. Sure, earning for miles per dollar on the United Club Infinite Card is better than three points per dollar on the Chase Sapphire Reserve, but I still use a Sapphire card because I do not want my points tied up with United.
Creating a card product that is better than the alternatives for United flyers is critical.
#2 Bring Back Award Charts, Keep Prices Reasonable
It’s time to bring back award charts. They matter for two main reasons: first, they hold an airline accountable. Second, they help people to plan and thereby incentivize them to keep their eye on the prize.
The only reason an airline takes away award charts is if it wants to get away with raising redemption prices indiscriminately and without providing notice.
I’m tempted here, of course, to gripe about the recent devaluations. Rapidly increasing the prices of partner awards shows a certain contempt for the customer. But that is not nearly as problematic as the lack of transparency in not publishing award charts any longer.
A customer who has saved for years for a dream vacation may find prices rise 20-30%, sometimes more, overnight. What do you think that does for loyalty? How do you think that passenger feels about United? Hint: it makes them HATE United.
There’s also a technological issue. In today’s world of MileagePlus, you pay what the computer says you’ll pay. The problem is that computers are designed by humans, humans are flawed, and dealing with a problem (most often with United’s Excursionist Perk) takes hours of time. Having a clearly-defined award chart could save hours of back-and-forth when systems do not work as they should. Sadly, that is still prevalent at United.
So award charts encourage transparency, promote accountability, and spur demand by helping passengers save toward a meaningful goal.
And as part of that award chart transparency, United should keep all prices reasonable, but particularly partner redemption prices. United pays a set cost to partner carriers for access to award space and it is actually very low (you’d be shocked at how little United pays for access to business and first class cabins on other carriers).
Already, United charges on the higher end for redemptions compared to Star Alliance partners like Aeroplan or LifeMiles. Inflating the cost of awards, particularly premium awards, turns away valuable customers who are willing to pour in discretionary spending to Untied Airlines, but want to be able to use miles to travel the world in forward cabins. I fit into that category…and it is becoming increasingly difficult to pay almost as much for a one-way ticket on United to Africa as I do for a round-trip ticket on ANA (even on United’s own metal!).
#3 Maintain Meaningful Elite Benefits For Flying United
The current elite structure (five tiers if you count Global Services) works well overall. Access to Priority check-in, security, and boarding is important. Lounge access is important for higher tier elites. Extra legroom economy class seats are vital and upgrades are a nice perk.
Here, it is essential that United keeps these elite benefits intact. As I factor whether to fly United or another carrier, I note that United gives me access to seats with an extra five inches of legroom and a complimentary snack if I am flying behind the curtain. If flying internationally, I have lounge access. I can always check bags and am invited to board ahead of other passengers, thus assuring access to overhead bin space. I am upgraded more often than not as a 1K flyer.
These are fundamentals, but they merit our spotlight: there can be no cutbacks here.
#4 Keep The MillionMiler Program Intact
United would be wise to keep its MillionMiler intact and unchanged. I’m a United MillionMiler for life, on my way to two million miles, and no one can take that away. But United can devalue my lifetime status at anytime. And while it may be tempting to start MillionMilers at lifetime silver instead of gold or take away the spousal benefit, it’s the MillionMiler program and the thought of realistically hitting 3-4 million lifetime flight miles over the course of my career and retirement that often makes me choose United metal over Star Alliance competitors.
United lost tremendous amounts of trust when it devalued its MillionMiler program after the Continental merger, a true bait-and-switch. This time, it would be wise not to repeat that mistake and continue to recognize what a driving factor lifetime status is in pushing business.
#5 Always Be Honest About Devaluations
Devaluations are going to happen. They always have and they always will. And that’s okay. Those of us in the miles and points game expect this. But it is absolutely unacceptable to characterize devaluations as beneficial to customers.
I’ll give you an example. In 2019, United boasted for months that it would eliminate its $75 close-in processing fee for award travel booked within 21 days of travel. It did eliminate the cash fee, but added a surcharge of 3,500 miles for all close-in bookings instead. And while MileagePlus elites were exempt from the $75 close-in processing fee, no one was exempt from the new close-in processing fee that was simply charged in mileage, not dollars.
This was an insult to all customers but particularly MileagePlus elite members. This does not build loyalty. Instead, it alienates customers and promotes disloyalty. I’m still angry about it four years later!
United would do well to be honest. Characterize devaluations as devaluations and people will shake their heads for a day, but respect you. But play Orwellian games and you’ll simply lose credibility.
Without reliable operations, friendly employees, the dispensation of empathy, and a value proposition that makes sense, people will not be loyal to United. While there are many loyal to MileagePlus and not United, the vast majority pledge allegiance to both, at least practically in terms of travel patterns. The above goals are foundational to creating a stronger and better MileagePlus program. I hope United does not make the same mistake Delta did.
image: United Airlines