What is the value of United Airlines loyalty program?

For instance, United Airlines’ loyalty program, MileagePlus, is one of the largest in the world. This program is currently used by over 100,000 participants and helps United Airlines build customer loyalty and create frequent flyers. However, it is worth questioning:

What is the value of this loyalty program, and is it worth it for travelers to engage?

For the flying public who usually book a flight with United Airlines frequently and are likely to access the services often and make optimum use of the card, the MileagePlus program can be of immense usefulness. In essence, MileagePlus enables its members to earn redeemable award miles with every flight on United or through services from participating partner companies. The accumulated miles are subsequently used to claim free flights and upgrade to United. This is the equivalent of receiving approximately 1 percent off your ticket price when you use your miles. For constant travelers, free flights make great sense, and over the years, the cost of travel has been highly reduced.

Furthermore, as a member of MileagePlus, earning more points and attaining premier elite levels offers additional privileges such as free checked luggage, priority services, access to the lounge, and more. Those with high status are allowed to get enhanced bonuses depending on the flight that they are taking and are privileged to access award options. If you fly more than approximately 2,000 miles per year with United, even just signing up for mid- or high-level Premier status via MileagePlus may save you up to several hundred dollars in freebies on every United flight.

While a once-a-year traveler may not see significant returns from the program, if people are giving more of their flying business to United Airlines rather than competitors and getting their flights credited to MileagePlus, they can get some free flights over the long term or at least get some discount on future ticket prices. United customers, as we have seen, attain value even when they have occasional use for the United awards. There is also value in the MileagePlus miles for those who rarely fly at all, and for those who never fly at all, the miles do not expire as long as the account is active with activity no less than once every month.

The ease of earning points from a host of United Airlines partners and, indeed, the flexibility of having a currency that can be transferred to over a dozen airlines as MileagePlus miles does add to the possibility of getting even better value on the rewards. When one transfers or accrues their credit card points or flight miles to airline alliances like Star Alliance and SkyTeam, they can have more availability of award seats and flights. Overall, although it is still somewhat ambiguous, I think that if you can learn how to correctly utilize partners, the potential redeemable value derived from MileagePlus miles is higher.

If you are originating out of hub cities such as Chicago, Houston, Denver, Newark, San Francisco, or Washington, D.C. airports, the network reaches and flight connectivity out of local airports make United Miles objectively more usable and valuable. Co-branding with and flying with United and its partners makes such activities as using awards or perks on paid flights less complicated. This cuts into the convenience that contributes to the value added by MileagePlus.

But critics of the so-called ‘frequent flyer’ mileage programs would say that airlines have seriously diluted the value of the awards or encouraged the redemption of miles, thus reducing the value of the latter. Of course, companies such as United Airlines have made changes to their programs like MileagePlus, raising the award costs, adding multi-tiered pricing, adding fees and surcharges, and generally making awards less available over the years to offset the increasing liability that is accrued by having so many members that are loyal to their programs. However, high-flying consumers have also become smarter about how to harness the programs by accumulating points from credit cards to transfer them to their accounts.

Although it is subjective to assess the value of airline miles across borders and depending on the given preferences and capabilities of each member, it is still possible to estimate on average that, taking into account all the benefits that the program may offer, MileagePlus still has an average of about cents per one mile for a member. For tiers associated with elite status, the calculations based on this cent per mile increase even more. However, even for the general members having a moderate activity level, if you rightly use the purchased or awarded miles for availing free flights, there can be no doubt that you can get over hundreds of dollars or more equivalent to ticket value in a year, and therefore, the membership becomes worthwhile.

All in all, despite devaluations, for all customers who do not fly United Airlines more often than once every couple of years, the sheer MFU and availability of award seats make staying loyal to MileagePlus a financially rational decision as far as travel expenditures are concerned. In this way, even the half-heartedly diligent members can get their money’s worth out of the leading airline loyalty program if they spend a certain amount of time discovering how to get the most out of the program that has an increasingly complicated, mutating yet basically rather generous benefit structure.

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