Evaluating United’s frequent-flyer program, MileagePlus

MileagePlus

Under United’s MileagePlus program, members earn mileage credits for flights on United, United Express, airlines in Star Alliance, and other airlines that participate in the program. Customers can also earn miles by purchasing goods and services of United’s non-airline members, such as credit card issuers, retail merchants, hotels, and car rentals. United also has a co-brand agreement with Chase bank that provides flyer mile credits for purchases using credit card issued by Chase and provides Chase the permission to market its products to United’s customer database. Each airline has their own policy to award miles and also offer different options for redeeming the miles. The table below compares the frequent-flyer programs for American Airlines, United Continental, and Delta Air Lines.

Recent changes to frequent-flyer programs

United has been awarding its customers based on distance traveled but plans to change its approach to awards based on ticket price (base fare plus carrier-imposed surcharges). The mainline carriers in the U.S. have started a new trend in awarding miles based on ticket price rather than distance traveled. United Airlines members will earn five miles for every dollar spent, and members in the MileagePlus Premier category will earn seven to eleven miles per dollar. Low-cost carriers like Southwest Airlines (LUV), JetBlue (JBLU), and Virgin America were already following this approach, but Delta Airlines (DAL) was the first among the three mainline carriers in the U.S. to shift to awards based on ticket price with an effective date of January 1, 2015, followed by United (UAL) on March 1, 2015.

This approach provides better award miles to premier customers and frequent business travelers who spend more at the expense of less frequent travelers who buy cheap tickets. American Airlines was the first airline to come up with a frequent-flyer program, AAdvantage, in 1981.