Predictions of the end of air travel and life as we know it have reached a fever pitch in the wake of United Airlines’ announcement that it is implementing changes to MileagePlus that will make it a “revenue based” program in 2015. Emotional pronouncements have ruled the day with predictable vitriol. Here’s a prediction for you – 2 years from now, we will have all moved on and approximately 224.6 people on the planet will remember what the fuss was about.
First – travelers that are buying last minute high (or highish) fares should rejoice at these changes. I don’t completely fall into this category, but I’m close enough that after a math exercise, the numbers prove that I will be better off with SkyMiles 2015. I’ll say it again – if you aren’t getting reimbursed for the majority of your travel, stop bothering with elite status. Fly the airline with a schedule and price that meets your needs best.
Second – revenue based or not, you can leverage credit card rewards and all sorts of mileage earning opportunities to travel in style. Buy a ticket (le gasp) when it makes sense financially, and leverage the plethora of rewards opportunities out there that are available without ever setting foot on an airplane. For now at least, these opportunities abound.
Third – the airline that carries more passengers domestically than any other, Southwest, went revenue based a while ago. Last time I checked, they still carried more passengers than any other airline domestically. Wonder why? Because for what they do, overall, they’re easy to do business with and they don’t suck. If the changes afoot in the airline loyalty program world drive you to make more rational economic decisions for yourself, that’s a good thing.
-MJ, June 12, 2014
Indeed employee travelers will rejoice. These revenue-based programs incentivize employee travelers to not work to save their employer money by planning trips, but to squander their employer’s money on last minute fares to get a higher miles kickback from the airline. But would employees really game their flight plans for kickbacks? Certainly no more than VA hospital management gamed the waiting time of patients to get bonuses!
“First – travelers that are buying last minute high (or highish) fares should rejoice at these changes.”
MJ: you’re great at reviewing love boats (cruise ships) and how often you get a Delta upgrade, but you honestly have no idea how the economics of running a rewards programs work. Gee…I’ve been a pilot for almost twenty years, does that make me an expert on matters concerning the highly complicated operations of running a one hundred million member loyalty program? Yeah, about as much as you do.
You’ll still have your elites who will get upgraded. Only less elites or Airlines will try to steal from each other. But airlines will have to discount economy more to fill the back with kettles.
Yes if you don’t care about being an Elite prices on economy tickets will come down. I think it will be revenue neutral for the airlines. Sell more expensive 1st class tickets and lower priced economy tickets to fill the planes. If more flights are added it could make things interesting. You might even see a price wars for economy tickets?
Many of the airlines only allow the person flying to collect the miles/points, not the person who paid for the ticket.
Agree with everything you said except……except the fact that Southwest Sucks.
I’m ExPlat and if American switched to a similar plan, I’d probably benefit based on my travels.
Will life go on? Yes. But will things be significantly different? Yes. On average mileage earning will be cut in half. Imagine if your salary was cut in half- would life go on? Yep. Would it not be as good as before. Definitely.
I think SW carried more passengers because its…. southwest. It’s the “airline for the masses” and there are a lot more of the “masses” out there than anything else.
First, didn’t just yesterday you say you’d only post once about the UA revenue system? And second, I completely disagree. Perhaps bloggers with massive point balances from cc referrals, etc. will not remember the changes, but for those budget-minded travelers this is a huge change.
@Tyler,
Thank you for your comment. I said last post “for now,” that was yesterday, and the post just kind of popped into my mind. Huge change? Absolutely. Is there a way forward without the world ending? Absolutely. Between a few card bonuses here and there, along with select spending strategies, life should go on for the average person.
MJ – have never posted on your blog before but read it and love your opinions (and that you like cruising).
That being said, I do think the bigger concern about being revenue based is the issue of incentivizing a company’s employees to book at higher fares to earn a bigger ROI for themselves while the employer takes all the burden.
This is brilliant for the airlines but I’m betting many companies will now say that miles earned from company travel are property of the company (except of course at ultra-travel heavy firms like the consulting firms).
@Joe,
Only time will tell how things pan out.
Nicely said, thank you sir.