United MileagePlus Program Revenue Based Program Details

In February Delta announced that their SkyMiles program would be going fully revenue based on the earnings side. Well, United just announced that MileagePlus will be going revenue based in 2015 as well, and they’ve copied Delta almost exactly:

As of March 1, 2015, the award miles you earn on most United and United Express® tickets will be based on your ticket price (that is, base fare plus carrier-imposed surcharges) instead of the distance you fly, so members will be rewarded for their travel spending on United. And when you have Premier® status, you’ll earn even more.

MileagePlus-Revenue-Based

The number of miles earned for United ticket purchases are as follows:

  • General MileagePlus members – earn 5 miles per dollar spent
  • MileagePlus Premier Silver members – earn 7 miles per dollar spent
  • MileagePlus Premier Gold members – earn 8 miles per dollar spent
  • MileagePlus Premier Platinum members – earn 9 miles per dollar spent
  • MileagePlus Premier 1K members – earn 11 miles per dollar spent

Then here are their further details:

  • 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.
  • This new way of earning award miles will apply to most tickets for flights operated by United and United Express. It will also apply to tickets for flights operated by a Star Alliance or MileagePlus partner airline when the ticket number starts with “016.”
  • Tickets for flights operated by a Star Alliance or MileagePlus partner airline that aren’t issued by United (ticket numbers that don’t start with “016”) will still earn award miles based on distance flown and the purchased fare class. You will still earn Premier® qualifying miles (PQM) based on the distance of your flight. Premier members will still earn a minimum of 500 PQM on United and United Express flights shorter than 500 miles.
  • You will be able to earn up to 75,000 award miles per ticket. There will not be a minimum number of award miles you can earn for a flight.

Bottom line

Much like when Delta SkyMiles announced their changes, the “breakeven point” here for a non-elite member is at around 20 cents per mile, meaning if you’re paying more than $1,000 roundtrip for a transcon then you’ll come out ahead under the new system. Otherwise you simply don’t come out ahead here.

This sucks, but is also hardly surprising, I suppose…

Comments

  1. AA now has the blueprint to really gut their program when they combine with Dividend Miles…just take MQDs and revenue-based RDMs from DL and UA, limited partner mile earning from DL, extra-expensive partner awards from UA, and perhaps some fuel surcharges and what have you from foreign carriers, and voila … “best in class.”

  2. I’m a loyal United flyer and wondering what I should do.

    After Delta announced this, everybody started to complain. But in reality, how many people have left or are actually planning to leave Delta?

  3. I really like how United is always mixing things up. Now they’ve given us the opportunity to earn more miles and are even giving us more ways to use them. Is this too good to be true???

  4. Thank you, United, you just saved me a bunch of money and time since I will never mile run on you again!

    When are we going to start a pool to bet on when UA files bankruptcy? I give them about 3 years before they drive themselves completely in the ground.

  5. Wow, bad news indeed! Would this impact miles earned on United flight on 016 ticket stock when crediting to other star partner (specifically, A3). Thanks!

  6. This is a really disappointing development. I just went back and analyzed my flying so far this year, and under this system I would have earned 22,147 LESS UA miles so far. Only one of my 22 flights would have earned more. As a UA 1K and AA EP, this will definitely drive me to book more AA and OW flights next year.

  7. NO competition after mergers…. Airlines hold all the chips now as there are really only 3 major players (Delta, AA, United) and 2 minors (jetblue , SouthWest )in the USA now.

    This is just the start of change.

  8. I have been so loyal to United but in a sense glad this is happening. I can quit being loyal to that nasty airline and now starting flying airlines that have cheaper fares and better service.

  9. All you people who plan on switching to AA, quit deluding yourselves. The clock on the bomb is ticking…

  10. The FF community should rally and support whole heartedly a few select airlines and programs that are friendly towards us.

    I was looking to fly IAD to India in Business class. UA is $8500+ and Emirates is $4500. Guess where my dollars are going to go ?

    Screw UA and DL and every other airline squeezing the flyers.

  11. Am I doing math wrong? I think this is *better* for those of us flying around the US for business travel. Even if I had no status, spending $400 on a flight like I’m currently making, from Chicago to upstate New York, would get me 5×400=2000 miles, instead of the 900 some I would currently earn. That’s good for domestic travel. With my current gold level, I’m looking at 3200 miles instead of the 1500 I currently get after the Gold minimums and bonuses. Even a 1K getting a 100% bonus on FF miles would get 2000 under the current program and 4400 under the new.

    Granted, spending $1500 on a cheap flight to Asia and only getting 7500 miles for my trouble is terrible. I don’t make those flights that often, but it definitely does suck. So…I’m not exactly stoked about the news, but I don’t think it’s made domestic travel that much less of a mile earning proposition, and it doesn’t change how you earn status (which is what I was really afraid of, since I tend to make lots of inexpensive domestic flights).

    However, Lucky, would you expect another miles devaluation? With people shuttling about the US, earning double miles on short hops, suddenly everyone has more miles to burn…

  12. android,

    The change works out for you as you fly an expensive, short route frequently. However, if you fly mostly competitive routes with lower fares, the change works out worse. I fly a lot for business, but my routes are pretty competitive and cheap (NYC to SFO, NYC to DEN, etc). Generally, most customers will earn fewer miles from flying.

  13. If they are taking RDMs away as an incentive, does that make alternative programs more attractive. Aegean is the obvious one, but what do you think of going after LH SEN/HON status flying mostly UA?

  14. How miles can be redeemed will matter right, in determining the effect of this change? How will this effect the value of cards like the Sapphire?

  15. So if I’m 1k and I buy a $500 coach UA ticket on UA metal (assuming zero tax), it would earn 5,500 miles, regardless of routing, is that right? But would this vary based on fare class?

  16. Any word on if they’ll be going revenue-based on the redemption side? After the gutting in February, nothing would surprise me now.

  17. @ Jason — Nope, no word yet on whether they’ll have revenue based redemptions. I’m sure it will come along eventually, but it may be a while.

  18. @ Andrew — This doesn’t seem to initially impact the redemption side of things. Only the earnings side of things for now.

  19. @ DBest — Foreign programs really are becoming more and more attractive. The issue with Lufthansa Senator/HON, for example, is that aside from recognition, there really aren’t that many elite benefits. You get one longhaul upgrade per year for reaching Senator status, compared to unlimited domestic upgrades with United. So if you primarily fly United, you’re probably still better off crediting to them, so you get all the other elite perks (Economy Plus, unlimited upgrades, flight changes, etc.).

  20. Why do you people care about UA…. Just another reason not to fly this miserable airline. Jeffery is doing everything possible to force this airline into BK…

  21. @ android — Yes, if you primarily fly shorthaul flights in expensive markets you definitely come out ahead. You’re in the minority, though.

  22. @ Ed — As of now it shouldn’t impact tickets credited to other airlines. Their earnings rates won’t necessarily change.

  23. I think “YMMV” is the rule of the day here. But I fly out of Chicago, and so far, not a single flight I’ve flown this year, including to both coasts, Texas, and some other random destinations, would earn me *less* miles under the new plan. Perhaps that an indictment of what United charges for its flights, but for me and my domestic travel, this is actually a bonus, until United devalues again. I have roughly 17,000 FF miles (on United tickets, not counting other partners) earned this year, and based on my spend on those tickets, the new program would have gotten me over 31,000 miles.

    I think it’s the international travel where folks are going to get hosed. And that definitely does suck. I’m not necessarily defending the change, I just think that before people freak out and play the switch airlines card (which isn’t even an option in some cities unless you love connections instead of easy directs) then you need to do some math. Your travel patterns will make a huge impact.

  24. @ Gene — Well this is the joy of how the economy works. While they’re not doing amazingly well, even a poorly run airline will be profitable in the current environment. But it’s all cyclical, and I’m sure United will be the first to fall once the next recession hits and there’s actually competition again.

  25. @ lee — That’s a great question. On one hand they can’t really do anything till they announce their new mileage program. So while I think it will happen, it may very well be 2016 before it happens.

  26. Seems to me like this is another indication that we are almost at the point where it is no longer worth it for the leisure traveler to be loyal to an airline.

  27. @mclots – No changes to how you earn status qualifying miles (although I am sure that will come next year) so for now, you can still mileage run to get status. I don’t know anyone who mileage runs for plain old redeemable FF miles, since I almost never see that being cost effective.

  28. Lucky, did you also hear that Delta will be offering one-way awards tickets starting in 2015 as well? That’s what I was told when I spoke to a SkyMiles rep. They’re not searchable yet, but should be when they do their official 2015 SkyMiles launch (again- or so I was told).

  29. Like android, I am also in the minority that will benefit greatly from this. Now if only they add status qualification from PQD, then I will be happy. If the year ended today I would be silver on $12K spend. $10K should get you platinum or gold at least.

    I just did a rough calculation. I’ve earned ~56,000 miles this year by flying United. Under this system that would’ve been 95,000 miles.

  30. Well this sucks. Even as a 1k, I will now earn substantially more miles through CC spend than flying. I also don’t get why they would impose a mileage earning cap other than all they can come up with is copying Delta. What a way to screw over your high mileage flyers. Also what is the GS multiplier?

  31. @android – I know there is no change about status qualifying miles. But there will be huge difference in award mile, cause I usually fly with discount economy ticket.
    If milerun means status maintenance, there would be no problem, but….revenue based miles….OMG

  32. Lucky,
    Why do you assume this change only positively effects a minority. I would challenge that statement.

    I think most domestic business flyers in non competitive markets which there are more of no because of consolidation are coming out ahead. If you fly J international the change is almost a wash.

    The only real flyers here effected by the change are cheap mile runners which I am sure UA/DL would be glad to pass on to AA.

    Most leisure flyers only care about price so this change does not impact there buying patterns.

    I think those impacted most are the NYC-LAX/SFO coach business flyers. To me that feels like the minority.

  33. @android,

    by my math, short haul and mid-con travelers tend to win or stay around the current state.

    Long haul (TATL, TPAC, etc.) and transcon travelers in discount economy are big losers.

    Premium cabin and full fare coach travel anywhere are winners up to 75,000 miles in RDM earnings.

    Which means that anyone shelling out bucks for very expensive BusinessFirst or GlobalFirst fares will have their earning capped, even though they could theoretically earn more.

  34. @ Unlucky — Well actually the numbers are pretty easy to verify here. If you spend less than 20 cents per mile pre-tax, you don’t come out ahead here (the number is slightly lower if you have status, though not by much). The average revenue per flown seat mile isn’t even close to 20 cents, so a majority of people are coming out behind here.

    If you’re a shorthaul business traveler or primarily fly transoceanic in paid business or first class you probably come out ahead here. Otherwise you probably don’t.

    But this definitely impacts a lot more than just “cheap mileage runners.”

  35. @gobluetwo – I totally agree with you, I just think before people manufacture too much outrage, they should do the math on their travel patterns.

    Come back and ask me next year when they devalue FF miles again, or change premier qualification to dollars based or something more onerous to me and my travel patterns (the people buying Global First will probably love a dollars based status qualifier). That’s when I’ll be filled with righteous indignance…I’m just saving it for when it’s really needed 😉

    At this point, I’m really married to UA for their partner network, which I feel is vastly superior to the others. Booking a $15,000 ANA First ticket for miles + $50? United can punch me in the face right now, and I’ll just smile and ask for more.

  36. Lucky
    The 20 cpm calculation is for general flyers –
    1$ spend = 5c back – I mean 5 miles back to you
    so if you spend 20c, you get 1 mile
    .
    However,
    If you are a 1K and are paying 1$ you get much more from this system, really 11c.
    So as a 1K if you are spending 9cpm, or more today, you will come out ahead.

  37. It took several cycles of failures –
    1991, 2001, 2007 before the airlines understood that revenue matters more than a mile flown.
    Remember that 10 transcons got a free anytime award on AA. Prices have not gone up, costs have!
    .
    Ultimately,
    I see revenue based redemption for miles at 1c each.
    e.g.,
    Bz class = 7000$
    700,000 miles for general members
    600000 miles for Silver
    500000 miles for Gold
    400000 miles for Plat
    350000 miles for Diamond on DL or 1k on UA
    .
    Then I just go back to my trusty 2% cash back card.

  38. Why the 75,000 mile cap, though? That’s a little over $8,000 on one ticket for a 1K member. Isn’t that essentially discouraging 1K and GS from flying paid international J or F when you’re capped? Seems like all that does is discourage paid F fares.

  39. @ ffi — But that’s not accounting for the fact that 1Ks previously earned a 100% mileage bonus.

    Using your nine cents per mile figure, if as 1K you fly 10,000 miles at nine cents per mile, that would have earned you 20,000 miles. Meanwhile now those nine cents per mile on a 10,000 mile ticket ($900) would earn you 9,900 miles.

    What am I missing?

  40. The other group it effects do not care which are the unwashed masses (e.g. leisure coach travelers) who are slaves to price. UA/DL has no reason to incentivize loyalty to this group. Why not move the chips more in favor of the ones that bring you the most revenue.

  41. @ Nick — Yeah, that’s my favorite part of all this. “We want to reward our high fare passengers… just not too much.” Why don’t they award miles beyond 75,000? My guess is because they don’t feel like they have to.

  42. @ Really Unlucky — I don’t disagree, but were the “unwashed masses” really accruing enough miles for it to matter? Miles expire after 18 months of inactivity, so if they’re truly not loyal then I can’t imagine the miles they were earning really have a negative impact.

  43. So this change is really just for the earning of RDM and not PQM? In addition, it looks like non-UA ticketed *A flight remain eligible for PQM but still not eligible for PQD, right?

  44. @unlucky: the way you know it adversely effects most passengers is that they are doing it. viz., they wouldn’t change the system unless it saved THEM money and cost US travel. No analysis required—it will hurt most travelers.

  45. Who are the losers here? Mileage runners, leisure travelers, and business flyers on cheap fares.

    I’d suggest that none of these are groups the airlines care to keep loyal. Most mileage runners are a net cost to an airline and compete for upgrades and other benefits against truly valuable clients, while leisure travelers are price sensitive and will book a competitor in a heartbeat if it saves them a dollar.

    The road warriors on cheap fares are the ones causing the most trouble because they tend to overestimate their importance (the DYKWIA complex). When something like this happens, these are the guys posting comments about how “I flew X thousand miles with UA last year” and “My X thousand dollars of business is going to AA”.

    Guess what? Just because you flew 4 times on UA every week last year doesn’t mean they actually made money off of you. You occupied a seat that could have been sold to someone else, there are real costs associated with flying you to your destination, and you probably visited the lounge en route and drank away some of their thin proft margin. If you flew on a cheap fare, there’s a possibility they may have lost money having you as a passenger, and repeating that formula 4 x weekly doesn’t solve the problem. It’s like the old joke – “We’re losing money on every sale but we’ll make it up on volume!”

    At the end of the day, this rewards those who actually generate a profit for the airline (paid premium cabin and high fare short-haul passengers) and discourages those who don’t (everyone else). It sounds like a rational way to run a loyalty program to me, especially when your competitors are doing the same (which AA will too when they announce the details of the merged AAdvantage program).

    Oh, and @Jared, if you were seriously considering flying UA at $8500 vs. Emirates at $4500 because of UA’s loyalty program, you’ve got bigger problems than miles to worry about. Trust me, the foreign airlines have no more respect for us than domestic carriers. This is business.

  46. I agree with most of what Arc says, with one exception: “thin profit margin?!” Have you SEEN DL’s stock? Up over 20% ytd. I only wish I’d bought more stock, and fewer tix.

  47. I do not see where infrequent leisure travelers will be severely impacted by the change to revenue-based award miles earning. They almost by definition do not pursue miles & points, though they may *accumulate* them when it isn’t too much of a bother. Price is the more important factor for them.

    If someone is actively tracking and increasing their balances and has a vacation (or just a target amount) goal, I wouldn’t say those are infrequent leisure travelers. 😉

  48. I disagree with that. I am a casual leisure traveler who very actively collects points and plans trips around them. I may only get a trip every few years, but it’s based entirely on where I can get on miles, and which airline gives me the most bang for my miles.

  49. What is interesting to me is how these airlines are penalizing fliers that live in competitive markets (like NY) and fly medium / long distances without regard to what kind of customers they are (business, leisure, etc). Shouldn’t airlines try to gain customers in these markets?

  50. @mbh – The greater the risk, the greater the reward… and vice-versa! Buy a railroad or a bank and wait 20 years instead.

  51. Here’s my upcoming travel plans for 2014. I have only flown 5k on United this year so far and nothing else on AA or DL so I’m open to anything. I am going to assume AA will offer similar program as DL and UA now.
    So if you were me, what would you do? Who would you put your travel to for the rest of 2014 to get good elite status for 2015. Assume 2015 has a similar travel schedule as the one noted below.

    *Need to travel to India from LAX (in business class) in August
    *2 trips LAX-Orlando
    *2 trips LAX-New York
    *2 trips LAX-Chicago

  52. Hi all,

    I am a little confused. Say if I have a RT from SFO to LAX, costing $138, I will be getting 1000 PQM, and 2000 RDM now. With the new system as a 1K, I will get 1000 PQM and 138 x 11 x 2(elite bonus) RDM. Am I correct?

  53. G- the class-of-service bonus and Premier bonus will be included in the number of award miles you earn per dollar. 138×11 I think.

  54. Lucky, so if I have Mileage Plus Select Card, I get 3x miles when I buy direct from UAL and use my cards. If this is correct then, I should be able to get 3x for the card + 5x for a member =8x for a ticket?! (plus the miles I fly).

  55. @Tommie12 and @lucky, “(plus the miles I fly)”… no, that’s not correct. It’s just 8x RDM total from the credit card and the flights.

    @E, no, EQM earning, like with DL’s 2015 program, is based on miles flown, not the new revenue calculation. Revenue formula will only be redeemable miles.

  56. @ E — The earnings rates apply to redeemable miles and not elite qualifying miles. Nothing changes with the earnings rates of elite qualifying miles.

  57. @ G — The 11x points includes the Premier 1K bonus. You don’t earn additional miles. So it would be 138 x 11 total for your redeemable miles.

  58. @ Chris — I don’t think there’s really a single airline that’s better than another with that kind of travel. I’d do whichever airline you have most miles banked with and that generally has the best fares.

  59. So I fly 15 $7k tickets a year which translates into over a million FF miles. Whereas before I would earn, I dunno, 200k max? THIs can’t be right, someone correct me.

  60. ahh. I got it. (I think). butt in seat miles only count towards status, not redeemable. Only irredeemable miles will be $$ spent with UAL then. Kind of sucks for business travelers who book through Axium or some third party. For example, if I fly through corporate and they buy my ticket, I put in my UAL number on the ticket. But since its $$ spent through a travel agency, I get no credit for miles to redeem on future flights…. just the pure pleasure of knowing that in 23 more legs, i will get status… uggg.

  61. I would love to switch my loyalty to AA at this point. But UA is the only one of the big three that offers a direct SFO-EWR flight, which I take 5-10 times a year.

    Considering that the United Club is now just awful (pay for drinks, ridiculously crowded), upgrades are rare out of UA hubs, charges for entertainment on transcon flights, they’ve already added rev requirements for status, they’re now including rev requirements for award miles and all while simultaneously devaluing the value of an award mile. What’s the point?

  62. Chris, not to push Virgin America too much, but it may suit your needs. Virgin America flies from LAX to all of your destinations. Virgin Atlantic should get you from LAX to LHR onto India, and you coudl earn Virgin America points. The problem is flying to other US locations from LAX.

  63. The announcement leaves me with a question that I haven’t seen answered anywhere else.

    Since the new rules don’t go into effect until March 1st, does qualifying for a status tier prior to Feb 28th going to be honored? For example, I know I need to do 2-3 trips from the east coast to Asia in the fist 2-3 months of the year.

    If I have both the 50,000 miles flown and the $5,000 in spend by Feb 28th, am I gold for the year?

  64. @ Paul — The new earnings rates only apply to redeemable miles and not elite qualifying miles, so you’ll continue to earn elite qualifying miles as normal.

  65. @ Lucky – I think when you were copying text from post on Delta’s program, you left in one instance of “medallion” 😉

  66. If a partner segment, say ANA, is on the 016 ticket that is say $1,000, including the UA segments, and for the ANA segment i give ANA my ANA number, will i double dip? That is, would the General Member earn 5,000 UA miles PLUS the ANA miles?

  67. Lucky:

    I use my United Credit Card only to collect miles. I have the mileage plus club card. It earns 1.5 miles for every dollar spent. I pretty much spend it on non-United purchases, so this is the main way I accumulate miles. I am a normal mileage plus member, so I would get the 5X if I ever outright purchased a fare.

    I wonder if the new revenue model will effect me. It doesn’t seem like it. If they are keeping the awards chart the same and adding more options to spend it….seems like it would be the same for me. I don’t earn miles when I fly on award tickets anyways. Any thoughts or predictions on how credit card award miles will be awarded in the future? Will cards mostly continue the 1 mile per dollar spend (1%) ? If miles are devalued in the revenue system, will they devalue them on the CC mile earning side?

  68. @ Aaron — You’re correct, the earnings rates for credit cards shouldn’t change. Ultimately they’re not trying to destroy all the value of their program, but rather just be less rewarding for those earning miles through flying. If you’re earning miles through credit cards, not much should change.

  69. American is the only airline to fly now I’m 75,000 base miles away from hitting the 1 million mile mark with united once I hit that milestone I have premier exec gold for life so for me I guess I’ll never have to worry again about status and I’m sure there will be a lot less of silver, gold ,premier exec & 1 k flyers I’m assuming this might work to my advantage as far as upgrades go for me , but overall I probally will not fly them that much anymore once I hit that milestone I will def be flying AA that will be my choice of airlines

  70. While the earning potential or lack has been clear in the recent posts…

    Ben, we need a post that explains what they have or are expected to do regarding elite qualification.

    The way I see it there are three major aspects to loyalty programs: 1) earning, 2)burning/using/redemption, 3)elite qualification and benefits.

    Jeff

  71. I wonder if short haul flyers are overestimating their new miles. As base cost for the multiplier is net of taxes and since taxes are a large percentage of payment to airlines… Looks like a straight lose across the board. Suspect next year the elite programmes will be all $$ based. Everyone should look at BA as a possibiiity.

  72. Finally, I fly all the time domestic 4-6 flights weekly, and I m always behind mr “monthly trips to Asia” about time!

  73. I am 2 million mile flyer with United and have been 1K member for over 15 years in a row.
    The new rules are making me earn far less miles. For a flight from Singapore to Tokyo, which I take few times a year, after March 1 2015, I was credited only 2783 miles vs. previously 6656.
    I understand that the new program is designed to reward flyers who pay more for United services, but there is no reason to punish everyone else. I run my company and always try to keep the cost down.
    I called American Airlines where I have currently only a Gold status and they instantly offered me matching Executive Platinum membership. Bye bye United…

  74. hi all, if some one can explain because really i don’t understand.
    im from Argentina, i usually fly from Buenos Aires (EZE) to Hong Kong, one of the longest route. my last fly i get from IAH (houston) to EZE 7593 milles that was Feb 9.2015, now i did the same route, and in my summary just earned for the same route EZE to IAH 2624 milles…. i m a gold member, usually doing 3 time same route i earn 1 fly , this time i need to fly around 10 times…. i m correct? please somebody can help .
    Thanks in Advance!
    Fernando

Leave a Reply

Your email address will not be published. Required fields are marked *