The slow demise of the frequent-flier program


United has overhauled its MileagePlus program so that points will now be awarded based on the dollars spent on tickets, rather than distance traveled. (Nam Y. Huh/AP)

It's a sad day for anyone who's ever known the joy of carefully hoarding frequent-flier miles.

United Airlines announced that beginning March 1, 2015, members of the company's MileagePlus program will earn award miles based on the price of their ticket, rather than how far they are traveling. Very simply, this means that the system will reward those who have more money to spend: travelers with corporate expense accounts, people who pay for first-class tickets, and anyone else who doesn't mind paying full price for airfare, especially for last-minute flights. For everyone else who usually flies coach or at least likes to shop around for the best ticket prices, the changes mark a further erosion in the benefits of airline frequent-flier programs.

As part of the change, United will start awarding five points per every dollar spent. Those with elite status -- from premier silver to premier 1K -- will get anywhere from seven to 11 points per dollar spent. The chart for how many points are needed to redeem free flights remains unchanged. As part of Tuesday's announcement, the company has added a few new redemption choices so that consumers can use points towards, for instance, upgrading to Economy Plus seats that offer more leg room.

"These changes are designed to more directly recognize the value of our members when they fly United," said Thomas F. O'Toole, United's senior vice president of marketing and loyalty and president of MileagePlus in a statement Tuesday.

The trouble is that for those who shop for a great bargain price for a trip to Tokyo from, let's say, Washington, you'll be getting rewarded as much as someone who massively overpaid for a last-minute flight to Los Angeles.

United seems to be following its competitor Delta, which made almost the exact same change to its SkyMiles program earlier this year. Smaller carriers, including JetBlue and Southwest, already have programs that calculate points based on dollars spent rather than miles. The news from United means that among the three biggest U.S. carriers -- United, Delta and American Airlines -- only American has not made the change.

It's not obvious that they will follow suit, says Brian Kelly, founder of the Web site ThePointsGuy.com and self-described "frequent flier mile and credit card point ninja" on Twitter.

"I think American might use this as a differentiator: 'We value customers, not just those who pay full-fare and first-class,'" said Kelly, who notes that American Airlines introduced the first frequent-flier program.

But he said that it's only a matter of time before airlines begin making it much harder for customers to redeem reward tickets by raising the number of points needed. One easy way is to make redemption requirements based on the cost of the ticket as well, so that suddenly a $12,000 first-class flight to Asia requires many more points than it used to simply because the full fare is extraordinarily expensive.

So what should consumers do?

Kelly suggests that any MileagePlus users who are unhappy about the changes can try calling American Airlines to see if they can get what's called a "status match," where a member with elite privileges through United's program can transfer that status to American. Another option is to rely more on credit cards to accrue points, especially those that make it easy to transfer points to multiple airlines -- that way you're not tied to one airline and subject to their increasingly frequent changes to their awards programs. Chase Sapphire Preferred and American Express' Starwood Preferred Guest, for instance, allow transfers of points to multiple carriers.

"If one program devalues, you at least have other options and you can keep your points in a safe diversified place," said Kelly. 

It could also be time to look at those points you've been carefully counting up and make use of them soon--before the airlines make any more big changes.

Jia Lynn Yang is a staff writer at The Washington Post who covers policy and business. Before joining the Post, she worked at Fortune magazine.
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