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This shouldn’t surprise anyone, but changes are coming to the United Airlines frequent flyer program starting March 1, 2015.
United Airlines will switch to a revenue-based frequent flyer program for earning miles (NOT for earning elite elite status or redeeming miles) on flights departing after March 1, 2015. This means that instead of earning miles based on the distance you fly, you’ll earn miles based on how much you paid for your ticket. You’ll earn more miles per $1 you spend if you have elite status compared to folks who don’t.
The changes will mostly affect folks who earn United Airlines miles from flying, and NOT those of us who collect miles from credit card sign-up bonuses, spending, shopping portals, or hotel points transfers. You can stop reading if you earn your miles from credit cards, because nothing really changes!
When you fly United Airlines now, you earn miles based on the distance flown. Some fares, like full-fare coach class, Business Class, and First Class, will earn extra miles (between 125% and 250% of the distance flown), but all discounted coach class fares earn a minimum of 100% of the miles you fly.
United Airlines is changing the way you earn miles for flights flown (NOT booked) after March 1, 2015. You’ll earn miles based on how much you paid for your ticket (base fare + surcharges) and what kind of elite status, if any, you have with United Airlines.
Here’s how many miles you’ll earn per $1 you spend (base fare + surcharges) for each elite status level:
|Elite Status Level||Miles Earned|
|None||5 Miles per $1|
|Premier Silver||7 Miles per $1|
|Premier Gold||8 Miles per $1|
|Premier Platinum||9 Miles per $1|
|Premier 1K||11 Miles per $1|
So for example, on a $300 ticket, you’d earn:
- No Status: 1,500 miles
- Premier Silver Status: 2,100 miles
- Premier Gold Status: 2,400 miles
- Premier Platinum Status: 2,700 miles
- Premier 1K Status: 3,300 miles
United Airlines says they’ve made these changes to reward members for their spending on United Airlines, which doesn’t help those of us don’t like to spend a lot of money on airline tickets! But I wrote that we should expect changes to how airline award programs are run, so this isn’t a surprise.
That said, I know many folks will be unhappy with this announcement. But part of being in the miles and points game is being able to adapt to industry trends and changes. There will still be ways to get Big Travel with Small Money!
How Will This Affect You?
The biggest impact of this change will be on folks who actually fly on United Airlines to earn miles (vs. those who earn miles through credit card bonuses and spending). This will especially affect those who like to fly long distances on discounted fares.
For example, I checked the United Airlines website for a round-trip flight from New York to Los Angeles in November. Their lowest fare is $398 round-trip in coach class.
Under United Airlines’ current system, you’d earn 4,950 miles for this trip if you don’t have elite status.
However, if you flew the same trip after March 1, 2015, and paid the same amount, you’d only earn ~1,990 miles ($398 fare x 5 miles per $1 you spend). That’s an approximate number because not all surcharges and fees will count towards spending. In any case, you’ll earn ~3,000 miles less.
And as a top-tier elite (Premier 1K), the difference in earning is even more substantial. Currently, Premier 1K flyers would earn 9,900 miles for this route.
After March 1, 2015, a Premier 1K elite member would only earn ~4,378 miles ($398 fare x 11 miles per $1 you spend) for the same $398 ticket. That’s a difference of over 5,500 miles!
The good news is you’ll still earn Premier Qualifying Miles (which count towards elite status) based on the distance flown, not on the fare paid. So those folks who like to “mileage run” by buying low or mistake fares on long routes to achieve elite status will NOT be affected by this change.
Note: These changes will only affect flights flown on United Airlines or United Express, or Star Alliance and partner tickets issued by United Airlines. You can still buy tickets on Star Alliance or partner airlines and credit the mileage to United Airlines under the old distance-based calculation. But be careful since many foreign airlines do not give you 100% of the miles earned for the cheapest tickets.
Who Might Benefit From This Change?
1. Business Class Travelers on Expensive Tickets
If you’re an elite business traveler whose company pays lots of money for Business Class tickets, but you get the miles, you might do quite well under the new system.
For example, a round-trip discounted Business Class ticket between Newark and London, UK costs $4,879.
Using the old distance-based system, an elite Platinum 1K flyer would earn 17,330 miles for this ticket.
The same trip flown after March 1, 2015 (assuming the same fare paid and elite status) would earn 53,669 miles ($4,879 fare x 11 miles per $1 you spend). That’s a huge difference! So overseas business travelers flying on expensive tickets might be very happy with this change.
And someone without any elite status at all would earn 24,395 ($4,879 fare x 5 miles per $1 you spend) for this ticket. That’s better than what a top-tier elite would earn (17,330 miles) under the old system.
Note: The class of service bonus is included in the number of award miles you earn per $1 you spend. From the MileagePlus Updates website:
For tickets that will earn award miles based on ticket price, the class-of-service bonus and Premier bonus will be included in the number of award miles you earn per dollar.
But before you (or your boss) go buying $10,000 overseas tickets, United Airlines says you can only earn a maximum of 75,000 miles per ticket. And there’s no minimum number of miles. I don’t understand why you’d want to upset folks spending tens of thousands of dollars on flights by limiting the maximum miles earned.
But you could get around this by booking 2 1-way tickets (if 2 1-way tickets are priced the same as your roundtrip).
2. Short-Haul Flyers on Moderately Priced (or Higher) Tickets
If you frequently fly short-haul routes (even in coach class), you might benefit from these changes, too.
A round-trip coach class ticket from Toronto to Chicago costs $340.
With the old system, this ticket would earn a non-elite member 874 miles.
But the same trip after March 1, 2015 would be a better deal for mileage earning. You’d earn 1,700 miles ($340 fare x 5 miles per $1 you spend). So if you fly a short distance on a (relatively) expensive ticket often, you will likely do better with the new revenue-based system.
Looking at it differently, the only way you’d do worse with this route under the new system would be if the fare were below ~$175. That’s because ~$175 x 5 miles per $1 you spend = 875 miles, which is about what you would have earned under the distance-based system.
Folks who do lots of short-haul flying on some routes may actually do very well with the new system! So it’s not all bad news.
3. Folks Who Use Miles Earned From Credit Cards to Fly on Award Tickets
The new system will discourage folks who mileage run (buy very cheap tickets for long-distance routes) to earn miles to use towards award tickets later. So award seat availability might actually improve on United Airlines!
This means there could be less competition for available award seats.
What About Earning Miles Through Credit Cards?
Link: Chase United Explorer
Link: Chase United Club
Link: Chase Sapphire Preferred
Link: Chase Ink Bold
Link: Chase Ink Plus
Link: Chase Freedom
There’s NO change to how you earn miles from credit cards. If you earn most of your United Airlines miles from credit card sign-up bonuses and spending, this change won’t have much of an effect.
In their FAQ, United Airlines says:
Does this change affect how I earn bonus award miles with my U.S.-based or international United MileagePlus credit card? No. If you hold a credit card that earns MileagePlus miles, nothing is changing with how you earn those miles. For example, United MileagePlus Explorer cardmembers will earn two award miles for each $1 spent on tickets purchased from United.
So you’ll still be able to get the sign-up bonuses and earn 2 miles per $1 you spend on United Airlines with the Chase United Explorer and Chase United Club cards. That said, I prefer using my Chase Sapphire Preferred because I’d get 2 Ultimate Rewards points per $1 spent which I can transfer to United or other airline or hotel partners.
And there’s no change to transferring Chase Ultimate Rewards points from the Chase Sapphire Preferred, (no longer offered) Chase Ink Bold, and Chase Ink Plus cards to United Airlines. If you have any of these cards and a Chase Freedom card, you can indirectly transfer your Chase Freedom points to United Airlines as well.
Will United Airlines Change How You Spend Miles?
Yes, but the changes aren’t clear yet.
United Airlines says they’ll be adding more and better ways to use miles. This usually means options which either aren’t good values!
Here’s a link to United Airlines’ current award chart.
Should You Change Your United Airlines Strategy?
If you earn most of your United Airlines miles from flying, you’ll probably want to look closely at how these changes will affect you. But there is NO (repeat, NO!) change for most of us who earn United miles via credit cards!
Other airlines, like Delta, have already moved to a (partial) revenue-based frequent flyer program. And I predicted that other airlines would follow with adding revenue components to earning miles and elite status.
But given the trend toward revenue based programs, I’m sure we’ll eventually see changes to earning miles on them, too.
Folks who flew United Airlines for inexpensive, long-distance domestic tickets to collect miles to use on international flights might now consider switching to airlines like Southwest or JetBlue for their domestic flying.
The free checked bags, cheap fares, modern planes, and quirky service on these airlines might be a lot more attractive now that folks won’t (usually) earn as many miles on United Airlines.
Remember, if you buy tickets on a Star Alliance or partner airline (as long as the ticket isn’t issued by United Airlines), you can still credit the miles to United Airlines under the old system.
Not much will change for folks who don’t earn United Airlines miles from flying. What will likely change is how we’re able to use those miles for award tickets, but until United Airlines gives us more information, it’s hard to say exactly what the effect will be.
That said, if you’re planning on buying paid tickets United Airlines and can fly before the changes take effect on March 1, 2015, you’ll almost definitely earn more miles (unless you’re buying very expensive tickets!)
United Airlines is changing its frequent flyer program to a revenue-based system for flights flown after March 1, 2015. This means that instead of earning miles based on the distance flown, you’ll earn miles based on how much you paid for your ticket.
This change WILL NOT affect many of us who earn United Airlines miles from credit card bonuses and spending. It WILL change things for folks who actually fly on United Airlines to earn miles. But elite status qualification will still be based on distance flown.
While this is not great news, let’s remember that the game is constantly changing and we need to adapt. There will always be ways to get Big Travel with Small Money, and I’ll keep you updated on them!
How will this announcement change your United Airlines strategy?
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