Combining its frequent flier program with Continental's, United Airlines announced new rewards on Wednesday to lure in high-fare corporate travelers.
Merging into the world's largest airline, United Continental Holdings Inc. took yet another step toward unifying its brand. The new combined mileage program will allow members to earn and redeem miles to 130 additional destinations, bringing to total redeemable destinations to 1,100. It also revamps its elite memberships, rewarding the most frequent fliers at the expense of lower-tier members.
Continental's old OnePass frequent flier program is set to end on Dec. 31, at which time fliers will have their OnePass miles converted to the new MileagePlus program. United has said that Continental frequent fliers will continue to get miles and upgrades between the end of the year and the conversion next year.
Absorbing Continental Airlines' OnePass program, United Airlines' MileagePlus program will more plainly distinguish between its four new Premier levels. MileagePlus will adhere to United's four-tier system, where those flying 25,000 miles earn silver status, 50,000-milers achieve gold, 75,000-milers get platinum and 100,000-mile status is called 1K.
Silver members can check one free bag under the new program, from the previous two, while Gold, Platinum and 1K can soon check three free.
Typically, airline frequent flier programs function on the idea of one mile of credit for every mile flown, rewarding distance over dollars.
However in January, Southwest began giving larger rewards depending on the fare, saying that it believed some customers will choose a slightly higher fare to get a better reward.
With its new announcement, United is headed in the same direction. Travelers on first class tickets will get as much as two-and-a-half times the miles flown. Those using business class and full-fare coach tickets will get more miles as well.
For example, a flier with 1K status who purchases a first class international ticket on a 1,000-mile route now receives 2,500 miles: 1,000 for the distance flown, 1,000 just for being a 1K elite and a bonus of 500 miles. Under United's new plan, the same person now gets an extra 1,000 bonus miles, for a total of 3,500. That's 40 percent more miles than the same ticket would earn today.
United hopes that by doing so, they will make those tickets (full coach fares and first class fares) more appealing.
We absolutely have every intention of acknowledging and recognizing both the frequent traveler, as well as the travelers that are creating the most value. We want to make sure that we're providing the right balance to the program to accomplish both of those tasks, Jeff Foland, president of United's MileagePlus program, told The Associated Press.
One change for Continental fliers will be an expiration date. Miles in the combined program will expire after a year and a half, something that will not come as a surprise for United travelers.
Though airlines are attempting to lure big-spending travelers in with their frequent flier programs, many are deciding that they are not the value they used to be. More miles needed for a free ticket, a limited availability of free seats, and expiring miles are turning many travelers away.
United predicts that the number of reward seats should stay the same under the combined program, which now has 85 million members.
The new program will take effect when United's and Continental's passenger-reservations systems are fully merged in the first quarter of 2012.
United Continental Holdings Inc. was formed nearly a year ago, combining to two airlines into a single carrier under the United name. New logos and a complete rebranding began in May.