United Gets a Gold Star for Removing Last Minute Mileage Plus Fees

This week is looking like a good week for frequent fliers. I’ve got some big news from another program tomorrow, but today, United shocked the world by actually removing a fee. Now last minute booking fees from Mileage Plus awards are gone, and that’s certainly worthy of a gold star.

Most airlines have added these obnoxious fees in the last couple of years. With United, you had to pay $100 goldstarextra if you booked your award travel within a week of departure and $75 extra if you booked between one week and three weeks of your trip. Why did they implement these fees? It certainly had nothing to do with an extra cost incurred by last minute bookings. No, it was simply a way to screw people out of money and devalue awards further.

Though I wasn’t in on the conversation, I think I can figure out how these fees came to be in the first place. Everyone knows that last minute fares are more expensive, so they probably thought they could charge a last minute fee and not push people away from using their miles because it was still a lot cheaper than buying a ticket. They could get people to burn miles and they could make a little extra cash on the deal. Sounded great, but it was absolutely distasteful from a customer perspective.

I imagine this recent change was thanks to the wonders of ancillary revenue. United has now learned it can make a fair amount of money from just getting people onboard. Bag fees and buy-on-board are just a couple ways that they can make money on someone who is flying on a free ticket. And since demand has been severely depressed lately, they just want to get people to fill those empty seats.

My guess is that the reduction of last minute fares on many airlines has meant that people just weren’t using their miles very much for last minute travel. I helped some friends a couple weeks ago who needed to fly from LA to Indianapolis that afternoon for an emergency. They asked about using miles, but once I told them about the fee (which is actually higher on other airlines), they opted to buy a $250 one way fare on US Airways instead.

In that case, United had seats available but it lost out because of the fee. That meant no bag revenue, no chance to sell food, etc. So I think the gamble here is that the elimination of the fee will just get people onboard, and that’s great news for customers.

Let’s all celebrate the death of one of the more obnoxious fees out there, and for once, let’s give United some credit for doing something that’s customer friendly.

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23 Comments on "United Gets a Gold Star for Removing Last Minute Mileage Plus Fees"

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Shane
Guest

I think you implied this, but do you think this also has to do with the increasing number of FF miles out there with fewer flights and fewer seats to use them on? Correct me if I’m wrong but those miles are liabilities on a balance sheet, and helping people dump them will help with ancillary revenue as you mentioned, improve customer relations and begin to work on some financial liabilities (although this probably doesn’t begin to make a dent).

oliver
Guest

The profit margin on the $100 fee is, well, $100. What’s the profit margin on a $6 snackbox?

John
Guest
Let’s not forget that Southwest has never charged an award booking fee (close in or otherwise). Consumers are wising up to how worthless frequent flier miles can become. With one stroke of the pen United made miles just that much less valuable by adding in these award booking fees. The pendulum has swung and consumers aren’t quite as loyal to the all mighty frequent flier mile. First the 20% off award bookings and now the removal of the booking fee. United is getting worried that they may have killed their golden goose (Mileage Plus) and is trying to bring it… Read more »
jaybru
Member
Congratulations to UA! Apparently, the change (elimination of fees) also applies to award ticket changes, like the flight change or date change. Still, with some restrictions. Am I asking too much to have UA think about tinkering with the difference between the standard and the saver award? As it stands now, it’s really little more than a bait and switch game. [Well, isn’t everthing with fares?] Anyway, I could live with a change making the standard (higher miles) award apply to the short-notice trips, (like within 7 days) and the saver awards (fewer miles) apply to the advance-notice trips (like… Read more »
j.mothena
Member
As a United Premier who has had to pay the $100 fee for a short-notice award ticket, I definitely applaud United’s move. I think it’s especially notable since other airlines have been hiking their award fees lately. It’s rare that United goes contrary to what the other airlines are doing, but in this case I think it’s a smart move, both from the perspectives of adding to ancillary revenue and getting passengers into the seats. Now I just wish United would match other airlines’ sale fares on the routes I travel. My home airport is Washington Dulles, and, for some… Read more »
Nick Barnard
Member

Getting people in the seats to make money on ancillaries… This sounds like Ryanair.

JT
Guest

Can someone explain the constant need to compare UA (or any other legacy carrier, for that matter) to Southwest? The route networks and mileage programs are completely different beasts, and for those of us who mostly travel internationally, Southwest is nothing more than a passing thought. I’m glad that you don’t have to pay a bag fee, but neither do I, and I don’t have to queue up to get my seat to Hong Kong.

Wyldkrd
Guest

Cranky,
It’s funny knowing that when you were on the “other side” you would have come up with ideas for fees like these. Now you are against them. Nothing like seeing the light!

Outflyer
Guest

Great news – it always annoyed me since it seems like this last min. redemption fee originated way back before e-tickets — when UA used to justify this kind of fee since they had to “rush” you the paper tickets.

Anyway – its great they dropped it

jaybru
Member
Jean, Oh to figure out UA and IAD fares! First, Southwest seldom discounts IAD fares. For almost any WN fare sale, you’ll find small print: :”Travel to/from Washington (Dulles) not included.” Ft. Myers is generally the same. I wrote WN about this asking for a little “LUV” but got the standard reply airlines give about how they try to fill their planes and generate a little profit for their shareholders. And, of course, they just give all this discounted seats away and stay in business. Surely something Cranky had a hand in writing. But my suspicion about IAD fares has… Read more »
Shane
Guest

Funny that soon after your post, I received the Mileage Plus email announcing the change July 30, but supplied a link that said “Book an award ticket today”. Perhaps a scheme to get me to pay the $100 fee by booking before the promotion starts :)

David SF eastbay
Member
By dropping the fee they can get more people on the plane using miles and it may not be to just get money on bag fees, food, etc. It’s also a way of getting more mileage travel so they can say “more people redeem miles on UA then any other airline” or “more last minute awards are redeemed on UA then any other airline” or some such boosting. But we all know it if works out for them, then other airlines will match and then no one will have the edge over anyone else in this area. Outflyer made a… Read more »
johnny
Member

Great job by you and United

Oliver
Guest

Getting more people on their planes? They reported a load factor of 85.9 percent for June! Where are they going to put the extra people?

http://www.united.com/press/detail/0,6862,60706,00.html

Robert S
Guest

Nice move by United and this makes them a little more competitive with Southwest. I bet a small portion of awards will be used for business travel, but mainly by the self employed paying their own way… and these people would otherwise find a really cut rate fare probably on another airline anyway.

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[…] there was a $75 fee. My boy CrankyFlier did a great job writing about it in detail so here’s more on that story. More good news: US Airways is set to get Wi-Fi on their planes and Delta has just begun Rollover […]

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[…] there was a $75 fee. My boy CrankyFlier did a great job writing about it in detail so here’s more on that story. More good news: US Airways is set to get Wi-Fi on their planes and Delta has just […]

trackback

[…] there was a $75 fee. My boy CrankyFlier did a great job writing about it in detail so here’s more on that story. More good news: US Airways is set to get Wi-Fi on their planes and Delta has just begun Rollover […]

trackback

[…] there was a $75 fee. My boy CrankyFlier did a great job writing about it in detail so here’s more on that story. More good news: US Airways is set to get Wi-Fi on their planes and Delta has just […]

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