Dive Brief:
- United Airlines is changing the amount of points loyalty members can earn based on whether or not they have a card with the airline, marking a major shakeup in one the airline industry’s leading loyalty programs.
- Starting with tickets purchased on April 2, MileagePlus general members who do not have a card will earn 3 points per dollar, while those with a card will earn 6, the company announced last week. Elite status members with premier 1K status earn 9 points per dollar to premier 1K cardholder members’ 12 points.
- "MileagePlus is designed to reward loyalty to United, and our best customers deserve the best benefits in the industry," Andrew Nocella, United's chief commercial officer, said in a prepared statement.
Dive Insight:
While United says that its updated loyalty program rewards loyalty, the change is more akin to a “carrot and stick approach,” according to Sean Cudahy, senior aviation reporter at The Points Guy.
“I don't think we've seen any airline go as far as United to say, ‘We're going to reward you way more if you have a card, and if you don't get one, we're going to give you fewer miles than you're earning today, and you're not going to get the benefits discounts,’” Cudahy told CX Dive.
United is leaning into cards on the redemption side, too. The airline is giving cardholders an automatic 10% discount on award flights — flights that customers book with miles — and those cardholders with Premier status will get 15% off.
The airline is also giving loyalty members who have a United credit or debit card access to “Saver Award” inventory in business class that was previously only available to Platinum and 1K members.
“For years we have seen airlines reward their most loyal customers with elite status,” Cudahy said. “But this is kind of at a whole other level. This is the most we've seen a U.S. airline kind of set up a two-track system, one for anyone who has a credit card and one for anyone who doesn't.”
Credit cards have become immensely profitable to airlines. Delta Air Lines, for example, made more than $8 billion last year from its credit card partnership with American Express.
“For some airlines, the loyalty arm of the business is a more profitable arm of the business than the business of flying airplanes,” Cudahy said. “So every airline has leaned into their credit card portfolio.”
