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New Award Fee Is a Minus for United’s Mileage Plus

New Award Fee Is a Minus for United’s Mileage Plus

Yesterday, members of United’s Mileage Plus program received an email with the subject line "Important changes to Mileage Plus award fees."

That’s almost never good.

And it wasn’t in this case.

For mileage Plus members, the following changes will take effect on June 15:

  • 1. A $75 "close-in booking fee" will be reinstated for awards booked within 21 days of travel. Premier and Silver elite members will be charged $50; Gold and Premier Executive members will pay $25; and 1K, Global Services, Platinum, and Presidential Platinum members can continue to book fee-free.
  • 2. The fee to change award bookings (origin, destination, or connection city) will decrease from $150 to $75 for non-elites, $50 for Premier and Silver Elite members, and $25 for Premier Executive and Gold members. There will be no change fee for 1K, Global Services, Platinum, and Presidential Platinum members.
  • 3. The fee to cancel an award and redeposit the miles will decrease for elites, from $150 to $125 for Premier and Silver members, and $100 for Premier Executive and Gold members. The fee will continue to be waived for 1K, Global Services, Platinum, and Presidential Platinum members.

Bottom Line: a Minus for Mileage Plus

In their email announcement, United explains away the changes as a necessary byproduct of the United-Continental merger: "We’re revising certain Mileage Plus and OnePass award fees to make them consistent across both programs."

Consistency, however, is hardly a component of consumer value, and the net effect of the changes is a significant devaluation of a Mileage Plus mile, and thus of the program itself.

When United discontinued its award booking rush fees in July 2009, the company enthused as follows: "Being the first airline to eliminate the last-minute booking fee will make it easier for our members to use their miles, and it is one of the many steps we are taking to make Mileage Plus the most rewarding loyalty program for them."

By the airline’s own logic, reinstating the fee will make it harder for Mileage Plus members to use their miles, and make the program a less rewarding one.

Reader Reality Check

Which of the upcoming changes has the most impact on your participation in United’s program?

How does this change affect your perception of Mileage Plus?

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