Wednesday, September 27, 2023

United’s New Revenue Earning System Might be Good for Some

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United will be changing its frequent flyer program by moving to a revenue earning system.  Basically this means that United miles will be awarded for the amount of money spent on a revenue ticket instead of amount of miles flown.  My first reaction was that this was another devaluation.  However, my next thought was that United’s new revenue earning system might be good for some people like me.

New United Revenue Earning System as of 3/1/2015

New United Revenue Earning System as of 3/1/2015

I earn about 99% of my miles through credit card sign ups, manufactured spend, and daily spending. Only about 1% of my miles are earned from paid tickets either from work or a rare case of me paying for a ticket.  I think United’s new revenue earning system might be good for some because:

  • I always use airline miles to fly for leisure.  Since award tickets do not earn miles, it doesn’t matter if United changes its earning system.  Therefore, I care mostly about the redemption side of loyalty programs.
  • Less miles circulating, means better award available if all else holds equal.  Your average consumer will take a lot longer to accumulate enough miles for an international trip.  Logically, there will be less competition for seats.  United’s new revenue earning system will have people earning less miles.  While last minute business trip goers may earn more miles, leisure travelers choose the lowest rate most of the time.
  • Business and first class availability should improve. It will take the average consumer a lot of spending on revenue flights to reach the current business/first class redemption rates.
  • People will shift to American Airlines and other loyalty programs.  American Airlines Aadvantage program is definitely now the best airlines program out there.  Their business and first class award redemption rates are 25-50% cheaper than United.  People naturally shift towards the better deal, making availability better for United and its partners.

I’m hoping my predictions are accurate and we might see a lot better award availability in 2015.  Compared to this year, I see better business and first class availability for 2015 already because United increased it’s business and first class availability earlier this year.  The high cost of premium awards definitely has lured some people away.  Mileage running or flying for miles and status will be harder than ever.  I believe manufactured spending and credit card churning will be the future of points and miles.  As long as we stay ahead of the game, we can always adapt to the changes in loyalty programs no matter how drastic they become.

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