On November 15, United is moving to a model in which it dynamically prices award seats. While that may irk frequent flyers, it opens up a whole new tier of fares to budget travelers.
Travel Loyalty News
The Skift Business of Loyalty covers the world of hotel, airline, and other consumer loyalty programs in the travel industry. Read more coverage of loyalty here.
Starting later this year, United Airlines is removing its published chart used for pricing award seats and adopting a dynamic model for pricing.
Depending on the type of traveler, this can be good or bad. With dynamic pricing, United can now slide the price of award seats down when demand is low — say for a flight to Europe in January or February — opening access for a whole new segment of budget or flexible travelers.
Passengers used to predictable and transparent tiers of award pricing may find less value in the new model. As an extension of United’s new flexibility, it also now has the power to ratchet award seat prices through the roof around Thanksgiving and Christmas.
Dynamic pricing will go into effect at United on November 15, just weeks before the holiday season. Until then, MileagePlus members will still use United’s tiered system with the added benefit of some dynamically lowered fares. Close-in booking fees will also be removed at that time.
Skift’s full report on the change, including insight from United’s head of MileagePlus, has the details.
— Grant Martin, Business of Loyalty Editor
Skift Stories and More Expert Insight
Alaska Airlines Leverages Virgin America Acquisition to Compete Aggressively on Loyalty: Alaska’s continued efforts to appeal to transcontinental airline passengers are creating lucrative bonuses for frequent flyers.
United Is Switching Frequent Flyer Program to Demand Pricing: United Airlines is changing the way it prices seats purchased with frequent flyer miles. On November 15, the carrier is switching to a system that prices award seats based on demand rather than specific tiers. The pricing strategy will allow United to slide award prices up when demand is high for a particular flight and ease off on costs when there are more seats available.
Why George Clooney’s Sultan of Brunei Hotels Boycott Is Misguided: George Clooney has launched a boycott of hotels owned by the sultan of Brunei. It’s similar to the same movement he launched back in 2014, this time in response to the recently announced Sharia law toward the LGBTQ community in Brunei.
Meet American Airlines’ Turbulence Guru: Steve Abelman, the only meteorologist employed by American Airlines, wants to eliminate turbulence injuries. But even with advances in science, airlines still struggle to predict when aircraft will bounce around.
Kiwi.com Wants to Disrupt How Airlines Price Long-Haul Airfare: Oliver Dlouhy founded the online travel agency Kiwi.com to introduce the masses to his favorite flight hacking methods. But with a new innovation — Kiwi helps customers buy what the industry called “throwaway” tickets — Dlouhy is irritating some of the world’s largest airlines, who warn the practice violates their rules.
Former United CFO Looks to Start Budget Airline Serving Secondary Airports: The former chief financial officer of United is betting that the U.S. airline industry needs another budget airline.
Airlines Want Flyers to Feel at Home With New Cabin Comforts: Aerospace companies at an expo in Hamburg show off new bells and whistles designed to make flying, even in cattle class, a better experience. So, instead of the odious waft of stale French fries in the cabin, your seat will smell of clean sheets. “Just like home” are the buzzwords. Will we ever get there?
United Is Now Posting Award Miles and Elite Credits Right Away: U.S. airlines are pretty good about awarding credit automatically after passengers complete travel, but it’s not unusual to expect miles to post at least a couple days after each flight segment. Delta has been an exception, and now United is following suit.
Wyndham Rewards’ New Award Pricing Is Live: Since 2015, Wyndham Rewards has charged a flat 15,000 points per free night, no matter which hotel. As of today, Wyndham Rewards’ new award pricing has kicked in. With these changes there are three pricing tiers for hotels.
Miles, a Loyalty Program for Everyday Transportation, Raises Additional Funding: A new loyalty program that awards travelers for all modes of transportation has raised additional funding and is expanding its spectrum of offerings this month.
One on One With United President Scott Kirby: While you have likely heard of Oscar Munoz, the CEO and pretty much the face of United, it’s Scott Kirby who is responsible for the day-to-day running of the airline, overseeing operations, marketing, sales, alliances, network planning, and revenue management.
Skift Business of Loyalty Editor Grant Martin [[email protected]] curates the Skift Business of Loyalty newsletter. Skift emails the newsletter every Monday.
Have a confidential tip for Skift? Get in touch
Photo credit: In this Saturday, Dec. 21, 2013, file photo, Holiday travelers check in at the United Airlines ticket counter at Terminal 1 in O'Hare International Airport in Chicago. AP