Are airlines moving the loyalty program goalposts?

Who moved my post? / Photo by rbrw - Flickr
Every week or so I get a complaint about the elusive nature of loyalty programs.

They follow a formula: Someone has given all of their business to a particular airline, but when they try to redeem their miles for a “free” ticket or an upgrade, they find it costs a lot more than they expected.

The airline, they say, is moving the goalposts – constantly upping the requirements for one of its hard-to-get perks. And it’s not fair.

Lately, the object of their scorn is United Airlines, which just merged with Continental Airlines and tightened some of its redemption policies.

For example, Jeffrey Grynkewich, a college student who is making plans to attend a study abroad program in Europe this summer, thought the 65,000 miles he’d collected on United would be more than enough for a trans-Atlantic flight.

“Unfortunately, they had no seats because one of my flights uses a regional carrier,” he says. “I ended up coughing up the cash for the flights in hopes that I could at least use my miles for an upgrade. Unfortunately, in order to request an upgrade — without any confirmation of actual upgrade — it will cost 40,000 miles plus $1,100.”

Wow, that’s a lot of points, not to mention the money.

Lori Dynan booked a United flight from Washington to Maui on United, and wanted to use some of her miles to upgrade on the long flight. She’s a frequent flier, and had successfully cashed in her miles for a better seat on United in the past.

“I was told that the base price of the ticket was $1,250,” says Dynan, who works for National Geographic (which, by way of full disclosure, I also work for).

But that’s not all, a United representative told her. If she wanted an upgrade, she’d have to plunk down an extra 35,000 miles, pay a $500 “processing fee” for the flight to Hawaii and a $450 “processing fee” for the return flight. Then there was a $25 fee for calling United to make the reservation; a $10 mystery fee and $100 in baggage fees.

Her total fare? $2,200.

Mileage programs, she says, are guilty of false advertising.

“What are the perks of joining a frequent flier program when one is charged to use said miles?” she wonders. “This is in essence, paying three times. For the first ticket we purchase, which earns the miles, then the second time when we use the miles to ‘upgrade’ and then the processing fees.”

I asked United about its processing fees, which are not exactly new, but are new to a lot of its customers because of its recent merger.

Technically, the fees Dynan mentions are “co-pays” although its unclear how that is different from a fee. United launched these new fees – I mean, co-pays – in January 2010.

“They permits more fare types to be upgradable, enabling more customers to qualify for an upgrade,” says United spokesman Charles Hobart.

Co-pay amounts vary based on the regions of travel and type of fare, he says. For example, a full-fare United Economy or United Business tickets have no co-pay, regardless of region of travel. Others, like the tickets Dynan and Grynkewich tried to purchase, do.

And that’s how mileage programs go. Read the terms and you’ll see that your airline can change the rules any time it wants to, and you have no choice in the matter.

Well, you do have a choice. You can take your business elsewhere. But that assumes other airlines have more generous mileage redemption policies, and unfortunately, moving the goalposts like this seems to be an industry-wide problem.

  • Extramail

    It would be interesting to see what would happen if the airlines would/could differentiate between those who earn miles actually flying or through credit card usage.

  • Raven_Altosk

    LOL…we were sent an email about “aligning with Mileage Plus.” 
    So, yes, they played both of us.

  • http://www.facebook.com/asiansm Dang Ph

    I no longer care to collect mileage, and, loyalty program is no longer a decisive element for choosing a airlines over another like 10 years ago. It was a different scenario before year 2000 when I didn’t mind a longer journey or a tortuous path to accumulate the mileage or the elite status. I did a milerun from time to time when there are a promotion (for example: AC 6 times mileage or do 3 airlines in the same alliance get 10,000 miles).  I even agreed to paid a more expensive ticket to stay with the same Alliance. But now, the mileage worth almost nothing, specially if you claim economy seat. The only perks left today is the Elite status. Loyalty programs are no longer the elements of the decision processus.

  • William Hamilton

    No I’m not a grass is greener person. Delta has comparable flights/routes to United and I am now in the mindset to take my business elsewhere. That’s all.

  • TonyA_says

    After reading all of the comments here, it seems to me she is even lucky she found a upgraded seat to Hawaii. If I were her, I’ll do everything I can to spend all my miles, even if I gain 20  lbs. eating out for free (just kidding) :-), since they might be worth less (or worthless) in the near future.

    Does anyone know if we can exchange airline points/miles for gasoline?

  • djp98374

    With most airlines if you have the airline or hotel affiliated credit card thaT gives you some status level n their promotions.

    A credit card holder is just like the lowest level elite group flyer where one checked bag is free.

  • TonyA_says

    I tried to get BC Upgrades for my client, EWR-NRT-MNL. They could easily get the CO/UA EWR-NRT segment by paying a co-pay but the NRT-MNL was on ANA and was a lot more complicated. The Intra-Asian segments (not on CO metal) needed Y/B/M equivalent fares (for Star upgrades) which made the whole journey so expensive.

    After countless hours, I realized no one is paid enough money to try to figure this puzzle out. Just reading the chart gives me a headache. Explaining it to clients – “priceless”.

    It’s a lot easier for me to sell my clients “Z” or “I” business class special fares (on Delta or other Asian airlines)  to Asia rather than to monkey around with this CO/UA mess (and get blamed for surprises).

    It all boils down to this – everyone has too many miles (saved) and there is not enough seats to buy with it. Then the airlines want to “capture more value” for those scarce seats by increasing co-pays and miles needed for redemption.

  • Rebecca O`Shaughnessy

    A trick for you: choose the Spanish option. Then just hit “0″ a few times, and start speaking english when they answer in Spanish. You will stay in the Spanish “queues”‘ in the call center. All the agents are in the US and all speak fluent English. Just don’t tell them you did it on purpose.

  • emanon256

    Did you also have a Video of Jeff Smizek saying there are going to be a lot of changes you will like, followed by an evil grin?

  • TonyA_says

    As someone else said in this forum, go for the flight schedule and fares first. For Asia, I would suppose Delta has UA/CO beat. IMO, UA can’t even cover most of SE Asia (beyond TYO and HKG)  without using NH and some other codeshare (not unless you want to go via GUM or track back to the East Coast).

  • http://profile.yahoo.com/RL5X7CKGRLGSERPZL5XNKRLOPI Charles

     Good for you – but United won’t care, and there won’t be huge losses of loyal customers.
    And fwiw, many Hawaii fares and most international fares aren’t upgradeable at all on Delta.

  • emanon256

    And can’t find any such thing with United.  But Delta used to, not sure if they still do, have a gift card section where you can buy gift cards at a very reasonable price.  I used to get $500 gift cards for 30,000 miles each from Delta. 

  • Chasmosaur

    Your husband and mine both, except not quite as many years (so not as many miles) and it’s usually 1,000 or 2,000 a pop, depending on whether or not he’s got an East or West Coast gig.

    And yeah, the rare times we check luggage, we’re always flying under his name.  I’d drive more, but he’s too used to flying these days ;)

  • TonyA_says

    Hi Emanon, I need you help explaining a BC upgrade on UA.

    My question is in regards to the ORD-NRT-BKK upgrade. My biggest issue with CO (before) was that whenever I made some  S.E. Asian itineraries from EWR, CO had to use another carrier to finish the trip since CO only flew to NRT/HKG/PEK/PVG. So, that other segment required another upgrade policy – oftentimes making it cost prohibitive.

    For the ORD-NRT-BKK flight, I see that UA does this:

    1  #UA9678   ORDNRT-1050A 145P     777 0E
    2  #UA9711      BKK- 550P1030P#1   763 0E
        UA9678 OPERATED BY ALL NIPPON
        UA9711 OPERATED BY ALL NIPPON
    3  #UA9678   ORDNRT-1050A 145P     777 0E
    4  #UA 803      BKK- 630P1105P#1   777 0E
        UA9678 OPERATED BY ALL NIPPON

    Are both flight options (even codeshares from NH) upgrade-able as one complete segment US to South Asia on MileagePlus?
    In other words, you pay ONE copay and ONE point redemption only.

    Now how about this ORD-NRT-MNL?

    1  #UA 881   ORDNRT-1236P 330P     744 0E
    2  #NH 949      MNL- 520P 900P#1   763 0E

    Note that the NRT-MNL is not a UA codeshare. It is instead an interlined flight by NH. I suppose UA will treat this a separate segment. So the upgrade (x2) with be MileagePlus upgrade US to Japan plus Star Upgrade Japan to South Asia.
    In this example, my clients to MNL are being dinged twice. Worse, I have to get them an expensive booking class in NH since NH does not have co-pay upgrades for the same class of UA/CO.

    If my observation is correct, then this is one example where codeshares are wonderful. Am I making any sense?

  • TonyA_says

    I understand that Y (definitely) and B/M (still maybe) Delta booking classes are upgradeable. Now Delta’s website is quiet on the B/M class. I wonder why?

  • emanon256

    As far as the United MP upgrade rules go, only the United operated flights are upgradable; the other carrier flights are not.  So the NH code share flights would not be upgradable nor would the interlined flight with United Miles + Co-Pays.  So unfortunately the miles and co-pay would only apply to the UA operated ORD-NRT segment.  I actually try to avoid these as I cannot upgrade.
     
    Then there are the star alliance upgrades, which are part of the alliances terms.  You can use United Miles to upgrade a Star Alliance carrier flight, if it is ticket and operated by the other carrier.  Star Alliance upgrades are per segment only.   It sounds like this would work for the interline ticketing, however they would have to be on a higher fare for the star alliance upgrade, I believe they have to be Y or B fare, but this sometimes varies. This would also ding them twice, as they would pay for the ORD-NRT upgrade on United and for the NRT-MNL Upgrade separately.  I only used a star alliance upgrade once and it was on TG, where I bought a day of C class ticket which was surprisingly cheap and upgraded to F for 5,000 miles.  But this was only a 2 hour flight.
     
    The only exception to the Star Alliance upgrade and United Upgrade is the LH agreement; you can convert United miles or a United Upgrade Certificate to an LH Paper Upgrade Certificate and present it at the ticketing counter for an LH operated flight.  You can then get upgraded if there is space available, but only during the 24 hour period before the flight.  I had it work successfully once.  If it doesn’t you have to mail the paper certificate back to United to be re-deposited.
     
    When I flew ORD-NRT-BKK is was all on UA metal, so I was able to apply 1 upgrade to both segments.

  • Raven_Altosk

    I need to photoshop some horns on him with that death smirk on his face!

  • Raven_Altosk

    I need to photoshop some horns on him with that death smirk on his face!

  • TonyA_says

    Thanks for your quick answer.
    So today it’s ORD-IAD-BKK on UA metal.  But starting 28AUG one can take ORD-NRT-BKK on UA metal. What a pity I can’t sell the UA codeshare on NH for ONE complete upgrade. Today, to take a complete CO/UA route to MNL, I have to route a pax via HNL-GUM-MNL. Not worth the hassle just to fly BC.
    I have given up selling those mixed MileagePlus and Star Upgrades. The amount of work and time doing it and explaining the cost to customers ain’t worth it.

  • http://profile.yahoo.com/RL5X7CKGRLGSERPZL5XNKRLOPI Charles

     Not sure – but M/B fares to Asia are typically around $5000+, while other economy fares are around $2000-3000 and discount business is perhaps $8000.
    Bottom line: if you want business class, pay for business class.

  • MarkKelling

    They have the information, they know exactly where the miles come from.  And they do differentiate.  The FF members with the highest status earned through actually flying get an expanded pool of reward seats to choose from.

    Once you have your reward seat, they probably don’t have any way of knowing the source of the miles/points.

  • emanon256

    Ouch, ORD-HNL is typically on domestic F, if it’s the domestic 767 then some economy plus seats are actually better that F, I think F seats are only 1 inch wider, with the same leg room as E+.  The 777 at least has a little more room in F.  Not worth paying for in my opinion, with miles or money.
     
    I wonder why UA is not currently offering NRT-BKK.  That’s a pretty popular route I thought.  

  • TonyA_says

     Good thing you asked. Something is wrong. My GDS is not putting the 2 flights together. So I have to sell them separately. Another merger issue?

     1 UA 881Y 01JUN FR ORDNRT  1236P  330P#1/O $ E
     2 UA 803Y 02JUN SA NRTBKK  630P 1105P/O $ E

  • emanon256

    Must be a merger issue, I have had the same problem all day trying to book YUL-DEN via ORD.  There are several ORD-DEN flights showing when I try to book ORD-DEN, but when I check YUL-DEN, or even YUL-ORD-DEN I get very few options for ORD-DEN, and some show as Direct with 1 Stop on regional jets, which don’t even get offered when I search for ORD-DEN. I am trying to get on the 6:00ish International 777 from ORD-DEN and can’t get it to ever appear with YUL in my segment.

  • http://pulse.yahoo.com/_P2YNBONSBUI2DAJT7OBCR4YOTI Barbara

    A couple of years ago my husband and I flew from IAD to MAD, buying our tickets from United.  We wanted economy plus, but the flight was operated by Aer Lingus.  So we decided to use miles to upgrade.  It cost us 40,000 miles EACH, plus $500 each way.  Add it up!  $2000 and 80,000 miles! First class was nice, but I don’t think we’d do it again.

    Then a year ago we flew from IAD to LAX  RT on Delta, using miles only for 1st class.  That was 60,000 miles each, and $5!  A much better deal, we thought.

  • TonyA_says

    @emanon256:disqus   Re: YUL-ORD-DEN
    You are right, the one with the 777 flight does not show up. Weird.
    This is the way I made it show up (in Worldspan).

    >A3MAYYULDEN253P/ORD-UA
    03MAY-TH-253P YULDEN(YMQDEN) ** MT              AC1
    YUL ALTERNATE XAX XLM YHU YMY
    1  #UA5828 Y5 B5 M5 E5 U5 H4 Q2 V1 YULORD- 253P 420P  *  ERJ 0E
    2  #UA 605 F4 A1 J5 C5 D5 Z3 P1 Y5    DEN- 651P 832P     777 0E

    I had to specifically request a departure of 253PM and via ORD for YUL-DEN on UA. Of course that meant I had to first find a YUL-ORD flight that would depart YUL early enough to make the ORD Min Conx Time requirement. That’s how I got the 253PM departure from YUL. (Note 2PM will work, too.)

    I don’t think I can keep my sanity as a TA selling mainly UA. These minor issues better get fixed soon.

  • TonyA_says

    Yes,  especially since Delta is selling S- Business Class Excursion fares LOWER than M-Economy Class.

    I priced a R/T S-Bus Cls LAX-MNL for less than $4.1k. As I said earlier, no need to upgrade, just buy Business Class on sale.

  • emanon256

    I still can’t get it to show on United’s website, though now it is showing a direct YUL-DEN with 2 stops which I find quite annoying, its YUL-ORD-DAY-DEN.  Then it keeps giving me options with regional directs with stops from ORD-DEN all with an ~40min connection in ORD.
     
    The only non-regional multi stop it will let me book is:
    UA 5869               2:23pm 3:51        YUL-ORD
    UA 941                  5:28pm 7:07        ORD-DEN
     
    I would normally feel safe with 1h37 for ORD domestic, but with customs, I would feel safer with the later flight.
     
    I just called, it took 40 minutes, but the agent was able to book the flight.  He was actually quite professional, it just took a long time.  But he was able to do it.  He said they are having a lot of system problems, but I am glad it worked.  Now I have 3 hours to clear customs, change terminals, and hopefully stop at Frontera Grill for some guacamole.

  • TonyA_says

    Considering how much you travel, why not get a GDS?
    I wonder if that is doable in your company?
    I don’t have the patience to wait 40 minutes for something I can do in 2-3 minutes. That just proves there is something wrong with the new UA/CO merged company. Anway glad you got the flights you want.That guacamole sounds great with Corona. Cheers.

  • emanon256

    I’ve looked at a GDS before, but I can’t justify the price.  I work semi independently, so while I work with a company, I pay most of my own expenses.  I also work predominantly for non-profits now, I find them much nicer clients.  So I won’t feel right trying to pass on that cost to them.
     
    I do use a system called KVS which is much cheaper, but I can’t book through it.  I don’t think it’s quite as powerful either. It’s like a view only GDS with access to fewer systems.
     
    I don’t know how you do it, I spent close to 2.5 hours today before work, during lunch, and this evening trying to book that flight.  My local agent told me that most flights are non-commissionable, so I don’t bother her with them.  But having to spend that much time booking a flight for which you don’t even get a commission is just not fair to travel agents.

  • Ann Lamoy

    I have the gold Amex/Skymiles card. It earns me miles and also allows me a free checked bag. (And up to eight people on the same reservation). I also get priority boarding and can pay with miles on eligible flights. (I bought a ticket SEA-BOS in September getting $200 using 20K miles. Didn’t have quite enough for a miles reward ticket and even if I did, the flights sucked badly.

    I don’t fly often enough (or use the Amex card. I prefer my Discover card for the cash back bonus) to earn a lot of miles. But it was nice to get that flight for only a little over $100. Made my mini vacation affordable. The Red Sox tickets and hotel room were expensive enough :D

  • TonyA_says

    Many years ago, our company was “asked” by our customers if we could sell them airline tickets because they wanted the way we treated them (for the current service we handled) and they simply could not find a decent travel agency in their towns or city. So we started a “community” of customers with similar needs. One of the toughest challenges we faced with was learning how to use a GDS very well or well enough to do a good search. A GDS is archaic, a remnant of the IBM mainframe world. But if you learn its short or terse “command” language, you could do a lot with a few keystrokes. I’m old enough to have worked in a big IBM Mainframe shop so cryptic one letter commands didn’t scare me. The real problem is that there are really very few folks around here to do any training. Most of the current (newer) users of GDS are in India or the Philippines where airlines and OTAs have their call centers.

    I think this is the problem of the UA/CO merger. A worker knows what he has to do but must have the skill and experience to do it in the tool he is given. Take a simple task as seat assignment. An agent knows he needs to assign seats when a pax checks in. If you knew how to do it on Apollo (or a skin built above it), it does not necessarily mean you can do it as well in SHARES. There is always a steep learning curve to redo each and every task from one system to another.

    I have always been amazed about how many folks in flyertalk were diehard UA loyalists. I think UA had the most involved loyalty program and they built a system to support it. Just imagine the code that goes in to prioritizing UPGRADES (or Standbys) prior to the flight’s departure. What if  UA had a different policy compared to CO?  IMO a loyalty support system is not necessarily included in a generic Departure Control System (DCS)  or Reservation System that Apollo or Shares or any GDS company would partition for an airline. UA can always fix flight schedules, missing reservations, etc. But to ALIGN a very complicated MileagePlus program is like forcing a square peg into a round hole. I’m sorry but MALIGN would have been a more accurate term.

  • http://twitter.com/happyflier Happy Flier

    I wonder how much of this is caused by airline employees who do not have a clue. Here is what happened to me.
    I paid 110,000 miles each to fly First and Business Class on American and Cathay Pacific from Texas to Hong Kong. My return trip involved an overnight stay at LAX. I called in one day to see if we could reschedule to avoid the overnight and was told “I can do that for 50K miles each.” I told him that if I paid 110K to go to the Oirent,  I wasn’t going to pay another 50K from LAX to TX. He replied he could put us in coach for 25K each, and I hung up on him.
    Called back a few days later, they had no availability, but there would be no charge since we were not changing our date/departure/destination.
    Called back a few days later, they were able to make the change for a $2.50 processing fee each.

    So, is the airline changing the goalposts, or did their reps simply have no clue? I don’t know. But I do know that if you don’t like what they tell you, hang up and call back later and speak to someone else, you may get what you wanted.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    Not at all.  These a profit centers.  They sell miles to credit card companies, hotels, car rental agencies etc.  Its just that they are being greedy and opportunistic by scaling back on the perks.  This can be done because of the lack of transparency.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    I guess it depends on the airlines.  On American,  upgrades cost one half the mileage of the free ticket plus co-pay.

  • http://pulse.yahoo.com/_OEPJGQPIEB75YYDE5CJY6R3VFE Carver Clark Farrow II

    In fairness.  People tend not to write about the successes anywhere near as much as the failures.  My experiences with Virgin and American have been outstanding as a member of both respective loyalty programs.

    The only programs that fell short for me was Hhonors, even when I held Diamond Status and Radisson. As a result I rarely stay at either chain. Voted with my wallet.

  • http://www.facebook.com/BarryMichaelGraham Barry Graham

    Don’t forget the $300 dollar surcharge you have to pay per ticket for a BA award ticket between the USA and the UK.