The Future of MileagePlus

The Future of MileagePlus

Recently during the United Continental Holdings earnings conference call for the first quarter 2014, the following exchange took place between Michael Linenberg of Deutche Bank, AG and Jeff Smisek, Chairman, President, CEO of United Airlines.

Linenberg: You look at how Delta is sort of rethinking their frequent flyer plan and then basically now sort of changing, tying the miles there on – basically tied to revenue paid. And it’s not unique. I mean, I think, JetBlue, Virgin America, Southwest, they’re also along those lines. Is that something that you may be looking at or studying?

Smisek: Clearly, frequent flyer – or our frequent flyer program, is evolving as are others. And what we’re trying to do is better align the benefits that we deliver to our customers through the frequent flyer program with the benefits that the customers deliver to us from their flying, including the profitability of their flying. And I believe that you will see evolution of our program over time. We can’t talk about specifics at this point in time, but clearly, this is an evolving process. And frequent flyer – our frequent flyer program, is becoming much more sophisticated and is better aligning the benefits bidirectionally.

Bottom line: There are no revelations here. Every major mileage-based frequent flyer program is likely having very similar conversations regarding the future of their program.

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