United Airlines is making significant changes to its frequent-flyer loyalty program, offering better rewards to travelers who hold one of its co-branded credit or debit cards. The airline’s move is intended to encourage more customers to sign up for and use its credit card products, while reducing mileage earnings for those not participating in the program.
What has changed:
Under the new structure, effective for tickets purchased on or after April 2, MileagePlus cardholders will earn twice as many miles per dollar spent on United flights as non-cardholders. The change is a strategic effort by the airline to boost adoption and use of its credit card offerings, which are a significant part of United’s revenue stream.
Apart from the increased earning rate, cardholders will also enjoy at least 10% discount when booking tickets with points or miles. On the other hand, MileagePlus members without a co-branded card will see a reduction in miles earned on flights, with the notable exception that they will not earn miles on basic economy tickets unless they have a United credit or debit card.
Industry Context and Impact:
Loyalty programs have become a major source of profit for airlines, with billions of dollars generated annually through partnerships between airlines and banks for co-branded credit cards. United’s move is part of a broader industry-wide trend to make credit card spending a central component of frequent flyer programs.
United’s changes highlight the growing importance of loyalty programs in an increasingly competitive airline industry. With credit cards becoming a major revenue driver, airlines like United are working to encourage their customers to spend through these financial products, benefiting both the airline and its banking partners.
looking ahead:
An overhaul of United’s MileagePlus program could lead to a change in consumer behavior, as travelers consider the benefits of signing up for the airline’s co-branded credit card. For loyal customers, enhancements to the program may provide more ways to earn and redeem miles, while those not participating in the card program may earn fewer miles on future flights.
As airlines continue to evolve their loyalty strategies, customers will likely see more incentives tied to credit card use, turning frequent-flyer programs into an even more powerful tool for increasing airline profits.