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Tuesday, June 10, 2014

United MileagePlus becomes the next major program to move to a revenue based model in 2015


About 3.5 months ago Delta came out with the 2015 SkyMiles program that had one major, mostly negative change that the program was moving to a revenue based model in 2015. What this meant was that you will no longer earn SkyMiles based on the actual flight distance but on how much you spend on the ticket. It seems United liked this idea so much that it has copied Delta SkyMiles as they move the MileagePlus program to a revenue based model in 2015.  We highlighted "copied" as they literally have copied the earn rates of the new SkyMiles program and even the maximum amount of miles you can earn on one flight. Now you will have United, Delta, WestJet Rewards, Virgin America Elevate, Southwest Rapid Rewards, JetBlue TrueBlue and a handful of smaller European and Asian programs all operating on a revenue based model.

Revenue Based Mileage Earning
In a nutshell if you don't feel like reading this entire post, the changes starting on March 1st, 2015 will provide a handsome reward to those who spend a lot on their airline tickets with United while seriously devaluing the program for those who don't and tend to buy less expensive tickets. Overall from what I have read on other blogs and news sites the changes in a whole are not good for most MileagePlus members as it appears they will earn less miles with their travels and when you consider the award chart devaluations that the MileagePlus program announced late last year (see: Huge devaluation of the United MileagePlus program - what does it mean for Canadian MileagePlus members?)

United MileagePlus members will earn the following as of March 1st (miles are per US$ spent on the actual fare and any carrier surcharges. Taxes do not count towards mileage earning)

  • General Non-Elite members will earn 5 MileagePlus Miles per dollar
  • Premier Silver members will earn 7 MileagePlus Miles per dollar
  • Premier  Gold  members will earn 8 MileagePlus Miles per dollar
  • Premier Platinum members will earn 9 MileagePlus Miles per dollar
  • Premier 1K members will earn 11 MileagePlus Miles per dollar
  • Plus U.S. and select international United MileagePlus Credit Card Members will continue to earn up to an additional 2 miles per dollar (or corresponding earning rate) on purchases with the cards.  This doesn't affect us here in Canada as there are no current MileagePlus credit cards for Canadians.
What does this mean for the actual miles earned compared to the current MileagePlus Miles earning structure? Depending on the route and the fare you may be better off the new system (ie shorter routes) while other who buy lower end longer haul routes may come up short with the new system. Here is an example using United's calculator showing the miles earned on United between Toronto and Newark with the new earn rate earning 1,250 miles versus the current earn rate of 1,000 miles. Then Toronto and Paris which would only earn 5,000 miles at a $1,000 ticket price versus just under 8,000 with the current system. As you can see the new rates are good for the JFK flights while the Paris flight takes a significant hit


But to put it in perspective, if you are a last minute buyer of tickets, say in business class and hold status with United a then you stand to reap some huge mileage earning rewards:

As you can see a Premier Gold  member flying on a $5,000 Business Class fare Toronto to Paris will earn 40,000 miles which is more than double the miles they currently do.

What about mileage earning on United's partner airlines?
This is the good news for us Canadians, as long as those flights are not a United ticket (016) you will earn miles based on the actual flight mileage. In fact if you were to buy an Air Canada ticket that includes a leg on United but has Air Canada's 014 ticket code you will earn the actual flight mileage in your MileagePlus account. On the other hand if you buy a United ticket that includes a leg on Air Canada or other Star Alliance airlines (hence have a ticket starting with 016) you will be subject to the new earning rules.


Does this affect how Canadian's earn MileagePlus status?
No, unlike the changes for U.S. based members where they need PQMs (Premier Qualifying Miles) and PQDs (Premier Qualifying Dollards) Canadians only require the PQM portion of elite status qualifying. PQM's will still be awarded on a 1:1 basis on your actual flight mileage.

What other changes are happening?
United has also announced some other changes on the redemption side of things although all details are still not out yet:


Want more details on the new MileagePlus program?  Click here to visit United's page for the 2015 MileagePlus program


My thoughts:
This doesn't affect me much as I don't use MileagePlus anymore and I am happy that I made Alaska Airlines Mileage Plan as my primary U.S. carrier program after Aeroplan a little over a year ago. That was not because of this or the past changes to MileagePlus but rather the great one way awards and coverage that Alaska provides out of YYC with their own fights and flights on KLM.

I am keeping my fingers crossed that Aeroplan does not move this direction albeit at 5 miles per dollar Aeroplan members flying on Tango fares may actually earn more miles than they do currently.

What are your thoughts on the changes? Will they be a devaluation for you or will they be a boon? Are you going to stick with MileagePlus or move to another program? I know a lot of you frequent travellers moved to United MileagePlus after the last few years of devaluations to Aeroplan. Will this make you reconsider that move? Who do think will follow suit and be the next to introduce a revenue based program? Let us know by commenting below!

(and to those of who click the link to  the post about Delta's changes will note the extreme similarities between that post and this one, well United made it easy by essentially copying Delta so I copied my old post and updated as required!)

6 comments:

  1. Isn't the only flight out of YYC on Alaska to Seattle?

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  2. Yes but with the SEA connection you can get to most cities in the U.S. plus connect to Emirates or like I mentioned above the KLM flight out YYC (that is my big reason for making Mileage Plan my primary US based program)

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  3. Fair enough, I do more in the US so I looked at United, but they won't status match an existing Star Alliance member.

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  4. I've been digging through the Aeroplan and MileagePlus reward programs and I have to admit to being lost. They certainly don't make it easy to understand. I am based in Vancouver and will be travelling primarily to Asia with the following 4 trips: (Tokyo, Melborne/Auckland, Beijing/Seoul/Taipei, Singapore/Mumbai) as well as a couple trips to the Eastern US and maybe one to Hamburg/Helsinki.

    I have status with KLM since for the past couple of years I have been flying primarily to Amsterdam and Helsinki but that alliance doesn't serve Asia well from YVR so I am looking to make a change to Star Alliance. I am trying to decide whether it makes more sense to go for Aeroplan or MileagePlus. Do you have a recommendation?

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  5. Personally I would probably lean towards Air Canada/Aeroplan. The reason being is that with those 4 Asia Trips (and the others you have planned) you should be able to achieve status in the Air Canada Altitude program. Also you can redeem for flights on United and of course other Star Alliance airlines at better rates than via MileagePlus as MileagePlus just recently hiked up the redemption rates for travel on their partner airlines. United also changed their earn rates for flying on Air Canada and if you are in certain fare classes you'll earn less than with Aeroplan. United will award more on full fare business or economy class. See the charts below.

    Had you asked a few years ago I would have said the opposite. Not to mention it is way easier to earn Aeroplan miles outside of flights than it is MileagePlus miles. Maybe others can chime in as well as to what they think the best option would be!

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  6. Thanks, I definitely appreciate the advice! Going with Air Canada made sense to me since I would likely be flying their metal on my Asia trips but your insight into the benefits of the programs makes the decision easier.

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