Expiring miles may anger members, but those who let their miles expire through inactivity can provide a boost to an airline’s bottom line. Each airline estimates that a certain number of frequent flyer miles will expire from accounts before they can be redeemed. Like all airlines, United Airlines reviews this estimate, called breakage, every year and has changed “its expectation for expirations now that it has more years of data to go by,” said United Airlines spokesman Michael Trevino.
United defers some of the revenue received when the airline sells miles to a third party or when someone purchases a flight on United or an alliance partner, with the expectation that the miles earned will be redeemed in the future. Now that they’ve changed their formula for calculating the number of miles that will ultimately be redeemed, United will defer less revenue, which means the airline will add $64 million to its first quarter revenue and approximately $256 million for the year.
Bottom line: Those numbers represent a lot of expiring miles. Mileage Plus miles expire after 18 months of inactivity and all it takes is a small purchase at the mileage mall, a dinner out or any other partner activity to keep your miles alive.