I had heard rumblings of this nearly six months ago, but now it’s official. United is offering one way award redemptions, and we should all be happy about that. Not only that, but they’re letting you pay with cash plus miles. These changes make your Mileage Plus miles much more useful, but of course, there are some restrictions. Let’s dig in a little bit more.

American has been doing one way awards for awhile, and my guess is that’s what spurred United to follow as well. Even though Delta may be the largest airline around these days, American and United have always seen each other as chief competitors. The shared O’Hare hub and long history certainly contributes to the rivalry. So United is matching American with one way awards and stepping up with cash plus miles.

Like American (and unlike some international carriers), United will simply charge you half the number of miles required for a roundtrip ticket to go one way. That means you can get a one way domestically for only 12,500 miles. This makes your miles much more useful.

For example, when we found an inexpensive one way fare to Indiana for the holidays, we wanted to use miles to get back home. I actually would have preferred to use my United miles, but they didn’t have one way awards. So I used American miles instead. Now I have a choice.

This also creates an opportunity to mix and match awards. Before this change, if you found saver awards available one way but only standard (double price) awards the other, you have to pay the full standard award amount. But now, you can simply buy two separate one way awards at different levels. That saves you a lot. You can also go one way on United and the other way on American, if availability dictates it.

But what if you don’t have enough miles for your trip? Well, you can use miles plus points. This to me seems like the beginning of moving toward a revenue-based mileage system. Right now, it looks like the miles and cash are zone-based, but eventually I would bet it would be able to move toward a dollar per mile valuation. Let’s see how it works now.

A roundtrip from LAX to Chicago is 25,000 miles on random dates. You can also do 15,000 miles plus $110 (actually $131 after taxes). The same award from LAX to New York is 15,000 miles plus $120. For LAX to San Francisco, it’s 10,000 miles plus $90. Nonstops versus connections don’t seem to make a difference, but these are only available on roundtrip saver awards on some routes. So it is restricted now, probably to see how it works.

Is this a good option? For LAX to San Francisco, I’d say not at all unless you’re traveling at the last minute. If you bought a ticket on those flights today, you’d save $83. That means you’re getting less than a penny per mile. For the JFK option, you’d save $266 so that’s up near 2 cents a mile. The point is, you really need to look at your specific flight to see how much it would cost to just buy it. You just can’t make a blanket statement here.

No matter what, this is a really nice option to have. I know some people are sad that this means the death of stopovers (you now need 3 one way awards), but that’s only for awards using United. If you do Star Alliance awards, then the old rules are still in tact.

This adds a lot of value for fliers and doesn’t take much away. I always like to see that.

First Space Hotel Set to Open in 2012 – Asylum.com
I was asked about travel to space. Fun topic, but I don’t see it anytime soon.

Milwaukee sparks air wars – BusinessRockford.com
A thorough piece on what the low cost carrier expansion into Milwaukee might mean for Rockford. I weighed in (and, as you imagine, I don’t see much hope for the place).

Does Delta Make Atlantic Southeast’s Performance Suffer? We’re About to Find Out – BNET
ASA’s on time and bag handling performances are pretty bad, but is it Delta’s fault? Possibly, and now we’ll find out.

Electronics top splurge gifts for travelers – ABC News/AP
The AP asked what kinds of gifts I would find interesting this holiday season. I’m looking at netbooks these days.

ExpressJet To Fill the 50-Seat Aircraft Void at United – BNET
Looks like United has decided how to replace those Mesa 50 seaters it’s getting rid of. ExpressJet is the winner, but this is a little more complicated than it sounds.

get that dress to your wedding in one piece – antibride.com
I don’t know much about wedding dresses, but I do know how you should get it to your wedding. Don’t check it. There are better ways.

Boingo Bets Passengers Will Engage with Sponsors for Free Wifi in Airports – BNET
Boingo is bringing the sponsor model to airports – watch an ad or do something they want and you’ll get free wifi.

United Listens to Customers, Changes Upgrade Policy – BNET
United is bringing back the regional upgrade due to popular demand. It goes to show that they do listen, sometimes.

Premium Air Traffic Takes and Unexpected Turn for the Worse – BNET
I really thought that September year-over-year comparisons would be much better. I was wrong.

I suppose it’s inevitable. Any time two airlines move closer together, the speculation that it means they’ll merge picks up. Right now, the noise surrounding a United-Continental merger is deafening thanks to the announcement that elite members will now get upgrades on each airline. That doesn’t necessarily mean a merger is going to happen.

Let’s start with the actual news here. United fliers will be given access to “premium” seating (better seats) in coach as well as upgrades on Continental. Continental fliers will get access to Economy Plus and upgrades on United. This begins “mid-2010.”

As usual, Continental has done a far better job communicating this change to its customers than United. Sure, they put out a joint press release, but other than that, United has been much less active in getting the news out. Continental, on the other hand, had a full FAQ on its website regarding the upgrades immediately and it posted details on FlyerTalk for Continental Elites. (There is now a page on United.com as well, and I eventually heard back from United’s PR team.)

In short, United and Continental elites are now basically treated the same regardless of which airline they’re on. This is good news for top tier elites, but for the entry level guys, this is just a further devaluation. I think entry level elite status can basically be considered a way to avoid fees and that’s about it now.

When people are flying on United, this is how upgrades will clear:

1. United Global Services
2. United 1K
3. United Premier Executive
4. Continental Platinum Elite
5. Continental Gold Elite
6. United Premier
7. Continental Silver Elite

When people are flying on Continental, this is how upgrades will clear:

1. Continental Platinum Elite
2. United Global Services
3. United 1K
4. Continental Gold Elite
5. United Premier Executive
6. Continental Silver Elite
7. United Premier

So as you can see, the United Premier and Continental Silver elites will be very unhappy about this. The Continental Gold Elites may be pretty unhappy as well since they’ll be bumped on their own airline by top tier United fliers. But remember, where the United top tier fliers are, the Continental top tier fliers likely are not. It’s not like American and United are doing this and having people battle it out in Chicago for upgrades.

I guess we can now see why United started allowing domestic upgrades for free. They wanted to align with Continental to implement this program.

Does this mean that the airlines are going to merge? Beats me. I’m sure United management would love to get that payday, but I don’t know that they are willing to completely walk away as they’d need to do. In my eyes, if this is going to be a successful merger, United needs to become a Houston-based airline.

But I look at moves like this differently than most. When airlines align their offerings closer and closer, it makes the actual benefits of a merger less than before. Sure, it would take some complexity and cost out of the system, but for the customer benefit, a merger isn’t necessary.

That doesn’t mean we won’t see a merger, of course, but it doesn’t mean it’s a done deal either.

American and British Airways Still Waiting for Feds Antitrust Immunity Decision – BNET
The waiting game continues as the DOT has gone past its own deadline for ruling on the BA/American deal. This is getting tiresome.

Capacity Restraint Leads to Fewer Empty Airline Seats in October – BNET
October traffic shows very few empty seats. Thank you, low fares.

US Airways Masks Frequent Flier Devaluations by Calling Them Customer Enhancements – BNET
US Airways has made over its frequent flier redemption, and while they claim its good for customers, that’s really just PR spin.

Holiday Season Is Upon Us – Flying Colors
One Cranky reader recommends Cranky Concierge for holiday travel for those who don’t already have their own airline dorks to help.

AirTran, SkyWest deal challenges traditional regional-airline model – Cleveland Plain Dealer
I was asked about my thoughts on whether this AirTran Skywest deal was truly innovative. Not so much.

American’s Firing of Mr X Becoming a Social Media Black Eye – BNET
American has fired Mr. X and the blogosphere is abuzz. Is American handling this right? I think you know the answer.

Melbourne Offers US Airways an Incentive that May Actually Work – BNET
You know I generally hate temporary airport incentives, but this is one that I don’t actually mind.

Thank you to everyone who commented, emailed, and tweeted about what you wanted to see from the airlines regarding loyalty programs. I joined with Nicholas Kralev from the Washington Times on Friday morning up on the stage to tell the crowd what you said. Did they listen? I’m sure some did, especially since data connections on BlackBerries didn’t seem to be working so well. That doesn’t mean anything is going to change, of course. At least we were allowed to say things as we saw them and nobody pulled our mikes away from us.

In all of your comments, I saw three main themes relating to loyalty programs (some of you strayed a bit too far into other areas for this conference).

Simple and Easy
Many of you said you were fed up with all the complex rules that have evolved over time in some of these programs. No airline employees actually spoke up when we tried to get feedback during the conference, but we did have other attendees jump into the conversation. Nicholas asked why there had to be so many small differences between some programs that simply made it difficult to grasp all the rules, and one person stood up to say that it was a balance between fairness and simplicity.

I explained that there was an understanding with customers that the simplest program (fly 10, get 1 free, for instance) isn’t always the best way to do things, but there are some things that don’t make sense even in that framework. For example, the last minute award bookings fees that Seattle Sleeples mentioned may make sense in the context of revenue management, but from a pure customer perspective, they can’t really be justified. The disconnect is the problem there.

Customer Value
I didn’t try to single out United, but that ended up happening more than once. One area where this came up was in regards to creating value for elites. (Thank you, United in Denver, for mentioning that in the first comment.) United’s recent decision to sell premium amenities to anyone is a perfect example of elites feeling like they aren’t being valued. Chris also echoed this concern in his desire for customer appreciation events. People want to feel valued, and some people, like asad, don’t feel they’re looking at lifetime value very well.

Someone spoke up saying that people are used to being rewarded with miles so airlines aren’t going to change that. Of course, some are, including JetBlue with their new spend-based model, but either way people end up being rewarded for the wrong behavior. People may fly a lot of miles on a $99 fare and end up not being very valuable to the airline at all, but they end up reaping the rewards. This goes back to that whole fairness vs simplicity argument.

Honesty/Integrity
The last point was one that I thought was expertly explained by Gary Leff from View From the Wing. In fact, I pulled up his comment on the big screen and started reading from it directly. So, I’m going to republish that here.

Honesty, Transparency, Integrity.

Those sound old fashioned, but I’m serious. Bear with me.

Don’t talk about ‘enhancements’ that are really devaluations. Your customers resent being lied to.

(Oh, and don’t ACTUALLY lie, either. Don’t promise something like the ability to redeem award seats on your partner airlines and then when a partner is offering an award seat don’t refuse to let your customer book it. And don’t tell your customer that the airline “isn’t offering the seat.” And don’t tell the customer that the partner airline doesn’t even fly the route on that day. I’m talking to you, United. 100% seriously.)

Offer a clear value proposition and STICK TO IT.

I disagree with @Chris who says no devaluations. Just be clear about what you are doing and give PLENTY of notice. So that there’s a clear connection between an offer, customer behavior, and a reward. When you offer benefits, customers fly to earn those benefits, and you change the rules of the game just as they’re about to experience those benefits… #FAIL … seriously. So declare by the end of February, 2010, say, what the 2011 program will look like. And stick to it.

In this same light, I agree with @Chris, though, that there is good online social media communication from a couple of companies like Starwood. Engage your customer, honestly and transpanretly. With a strong customer service presence and not a marketing, PR, or spin shop.

Tell the truth. Declare it openly, warts and all. And then deliver on your declarations. And your customers will love you for it.

Surprisingly, the one thing we failed to bring up was the Starnet blocking that United engages in. It’s particularly funny that we didn’t mention it since Nicholas wrote a column that effectively thrust this into a wider spotlight. But we got so caught up with other examples of lying about something being done to “enhance the customer experience” that we ended up running out of time.

I know someone asked for a video, but I don’t think it was taped. If I find a video, I’ll post it.

Thanks again for all the feedback, and hopefully this had some impact.