Airlines Award Miles Based on Money: Who's Next?
Will American Airlines be the next to change it's frequent-flier policy?
June 10, 2014— -- United Airlines announced today it would change its frequent-flier program to award miles based on money spent, rather than distance flown. It's a move that mimics that of Delta Airlines earlier this year. In February, the airline announced it would be the first legacy carrier to do the same.
United's new program rules are virtually identical, said Brian Kelly of ThePointsGuy.com. "It's basically a copy and paste."
United fliers will now earn award miles based on the price of their ticket and their MileagePlus status. Fliers will earn between five and 11 miles per dollar, depending on status.
Rewarding miles based on money isn't a new idea: JetBlue and Southwest have done it for some time. But, unlike Delta and United, Kelly pointed out, those airlines aren't rewarding frequent fliers with free first-class upgrades, a major perk for those who fly tens of thousands of miles each year.
United's move begs the question: Who's next?
If frequent flier programs were to go the way of bag fees, fliers would expect the merged American Airlines to follow. It was the first carrier to charge a checked bag fee in June 2008. A few weeks later, United and US Airways followed. Next came Northwest. By September, Delta and Continental had made their announcements.
But Kelly said there are several reasons the merged American Airlines might not follow suit. "They might use it as a differentiator for the 'new' American Airlines," he said. He also pointed out that while collecting bag fees is direct revenue to the bottom line, frequent-flier programs are more complicated. "This is a game where the airlines will save some money and give out less."
Not all airline experts agree.
According to George Hobica, founder of Airfarewatchdog.com, it may just be a matter of time and logistics. "I would say sometime in 2015, AA will follow suit. They need to integrate with US Airways first." 2015 is also when the announced changes to Delta and United's programs will begin to take effect. This would also give American some time to sit back and see if and how those airlines' frequent fliers adjust to the changes.
"We are always watching the competitive environment and we’ll make sure AAdvantage is positioned as an industry-leading loyalty program fitting for the world’s greatest airline," said Matt Miller, American Airlines spokesperson. "Our first priority is to integrate the two loyalty programs [American and US Airways] to provide our customers a more seamless travel experience and greater opportunities to earn and redeem miles on our expanded network."
Kelly said fliers angered by the thought of earning fewer miles on their preferred carriers should consider switching, especially if they live in a large city with several airline choices. "Other frequent flier programs will often match your status on their carrier" for defectors, he said.
