Big changes are coming to the way in which elite travelers on United Airlines use airline upgrades. Later this year, the Chicago-based carrier is moving to an accrual-based system called PointsPlus that charges passengers points for regional or domestic upgrades.
Interestingly, the points system is almost exactly like the certificate system that United uses. Instead of earning two regional and six global upgrades when reaching 100,000 annual traveled miles per year, for example, now travelers get 280 points. In most cases it costs 40 points for an international upgrade from economy to business and 20 points for a domestic upgrade — so the allocated points cleanly match the former upgrade system.
Why the change then? In part, it’s because of the flexibility afforded by the system. By using points, travelers can decide how they want to split up regional versus domestic upgrades. Lower-tier elites, who will also earn points upon reaching a status tier, can also be judicious with how their upgrades are spent.
But there’s also a possible upside baked in for United. By using a points system, the airline now has better capability to segment its audiences and deliver targeted upgrades to the right passengers, not unlike the way it now prices award seats — potentially streamlining loyalty revenue. It’s also not hard to think of a future in which the PointsPlus system becomes more of a traded currency: Earn 10 PointsPlus points by signing up for the MileagePlus credit card! American and Delta are surely watching closely.
— Grant Martin, Business of Loyalty Editor
Skift Stories and More Expert Insight
IHG Launches Loyalty Partnership With Mr & Mrs Smith Hotels: Intercontinental Hotels Group is expanding its loyalty offerings for luxury travelers. Next year, the hotel giant, which owns brands such as Holiday Inn, Crowne Plaza, and Intercontinental Hotels, will expand IHG Rewards to also cover Mr & Mrs Smith hotels, a collection of boutique properties around the world.
United Airlines Simplifies Seat Upgrades With Points Incentives: Many U.S. road warriors have given up on the frequent flyer miles awarded by airlines. For all but the most profligate spenders, miles are tougher than ever to earn from flying, and they’re not so easy to redeem. Upgrades are another matter.
Can Thomas Cook’s Surviving Brands Find New Homes? The collapse of Thomas Cook in the early hours Monday saw the downfall of one of the biggest names in travel, but some of its smaller brands continue to live on.
This Startup Wants U.S. Airlines to Use Buses to Replace Smaller Regional Jets: It’s hard to think of the bus as a disruptive form of mass transportation. But who knows? Maybe this company, Landline, will revolutionize how Americans buy airline tickets.
Delta Air Lines Buys Stake in Latin America’s Latam at American’s Expense: Delta Air Lines Inc. is dramatically expanding its Latin American footprint, agreeing to a $2.25 billion deal with the region’s largest carrier that upends the designs of U.S. rival American Airlines Group Inc.
What’s Gone Wrong at American Airlines? American Airlines has made a lot of excuses for its performance this year. It blames so many of its problems on a labor dispute and the grounding of the Boeing 737 Max. But perhaps there’s something more here?
British Airways Owner IAG Cuts Profit Forecast After Strike Disruption: British Airways-owner IAG SA warned pilot strikes and lower ticket prices will hurt annual profit, the latest in a series of bad news for the European travel and leisure industry.
Hong Kong Airlines Appeal to Government for Short-Term Relief: Airlines operating in Hong Kong are urging the government to implement temporary policies to offset damage to their business as months of pro-democracy protests have disrupted operations and hurt visitor numbers.
Grant Martin [email@example.com] curates the Skift Business of Loyalty newsletter. He is also a director of product marketing at TripActions. Skift emails the newsletter every Monday.