Ticket Prices will Determine Airline Rewards

While there remain plenty of cheap traveloptions such as cheapairplane tickets, discount hotel rooms, and cheap vacation packages, theairline industry is changing its loyalty programs regarding how frequent fliersearn miles.

In March of 2015 United Airlines will follow Delta AirLines lead by awarding frequent fliers miles based on ticket prices instead ofthe distance flown.

The amount of United miles awarded will be based on thestatus of the frequent flier, with standard members earning five miles perdollar spent. Premier 1K, PremierPlatinum, Premier Gold, and Premier Silver frequent fliers will accrue miles ata rate of 11, nine, eight and seven miles per dollar spent, respectively.

Miles will be earned determined by base ticket prices andcarrier imposed surcharges.

In 2015 United plans to offer its frequent fliers membersnew ways to redeem their miles including single flight purchases of extralegroom United Economy Plus seats and checked baggage subscriptions.

The change in its approach to how miles are awarded isdriven, according to the airline, by the desire to more directly recognize thevalue of each frequent flier.

Delta announced in February of this year that effectiveJanuary 1st, 2015 it will implement a new mileage redemptionstructure that it claims will improve Award seat availability at the lowestmileage requirement levels. It willstart offering One-Way Awards at half the price of round trip, provide additionalMiles and Cash Award options as well as make meaningful improvements to iswebsite and Delta reservations Award shopping tools.

The airline believes that its new awards program, based onticket prices vs. miles flown will better recognize frequent business travelers(who are typically an airlines most profitable passengers) and those lessfrequent leisure customers who are willing to pay premium fares.

Passengers who purchase tickets from Deltas partnerairlines will earn miles based on a percentage of miles flown as determined bythe fare class purchased. They will alsoearn Medallion mileage bonuses on eligible ticket prices.

Delta was the first U.S. major airline to change its rewardprogram from miles flown to the dollars paid for airfare.

The bottom line is that the move from miles flown to pricepaid is negative for most fliers. Inorder to give some fliers up to 11 miles for every dollar paid, the majority offliers are going to earn less than half as many miles (five miles) for everydollar spent.

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