United Airlines Simplifies Seat Upgrades With Points Incentives

Many U.S. road warriors have given up on the frequent flyer miles awarded by airlines. For all but the most profligate spenders, miles are tougher than ever to earn from flying, and they’re not so easy to redeem.

Upgrades are another matter. Many flyers stick with an airline not because they want miles, but because they hope they can upgrade to a flatbed to Europe or Asia for free, saving thousands of dollars per trip.

United Airlines knows this, and on Tuesday, it outlined a new program executives claim will make it easier for the carrier’s best customers to sit in premium seats. Starting Dec. 4, United no longer will award frequent flyers chits they can use for upgrades, replacing them with a new proprietary currency, called PlusPoints.
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Customers will start earning points when they fly 75,000 miles in one year, with United giving them 40. But they won’t start racking up a lot of them until they reach 100,000 miles. Then, they’ll get another 280 points.

In most cases, each upgrade type will cost a fixed number of points. A passenger will need 20 to upgrade to domestic first class, or from economy to premium economy on long-haul routes.
A customer will need 30 points to go from long-haul premium economy to business class, and 40 to upgrade from higher-priced economy fares to long-haul business class. Customers who want to upgrade from the cheapest economy fares to business class will need 80 points.

Like today, upgrades will be capacity controlled, so United is likely to upgrade a passenger only when it cannot sell the seat. But Luc Bondar, vice president of United’s MileagePlus program, said in a briefing United may offer its best customers an upgrade on a popular flight if the customer will part with more points.
“We are very confident that this is the most generous upgrade benefit for premium customers in the U.S. today,” Bondar said. “Upgrades are a huge benefit. We want to make it easier for [customers] to use these upgrades.”
Bloggers Rejoice
Before it makes frequent flyer program changes public, United briefs a group of influential bloggers, some of whom have followings into the millions. Airline executives often fear how they’ll react, as a lot of poor reviews can sway frequent flyers.

This week, the bloggers were wondering if United might gut its program, making it tougher for frequent flyers to earn upgrades. These upgrade programs are tricky for carriers, because while they’d prefer to sell seats for cash, they also know they need to upgrade their best customers, or they could defect.

Two of the bloggers briefed on Monday told Skift they were pleasantly surprised by the airline’s changes.
“This is basically the same program, with a few tweaks,” said Gary Leff, who writes View From the Wing. “But it’s a new currency that allows members to spend fewer points for less valuable upgrades, and more points for more valuable upgrades.”
Seth Miller, who blogs as Wandering Aramean, said he agreed. He noted United fixed two problems that irritated elite frequent flyers. In the past, he said, members could only upgrade to long-haul business class if they bought a more expensive economy class ticket, but now they can upgrade on more fares. Also, he said, United previously would take the chits even if the customer waitlisted, returning them when the upgrade did not clear. Now, United will take points only when the upgrade clears.
“At first blush, the improved flexibility of the PlusPoints program appears to be a real win for MileagePlus elite members,” Miller said. “United addressed two significant drawbacks of the old program.”

There is one possible issue for customers, Leff said. United has created a new currency, and while today United is charging fair prices for upgrades, Leff noted that United can devalue its currency whenever it wants.
Perhaps, he said, today’s 40-point upgrade could ballon to 50 or more in a few years.
“While there’s nothing negative for customers today, they can more easily devalue upgrades in the future by changing the number of points required for the upgrade,” Leff said.

By: Brian Sumers

Source: Skift