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 
extra 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.
