SFGate: United changes its frequent-flier program

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Thursday, November 13, 2008 (SF Chronicle)
United changes its frequent-flier program
Ed Perkins


   United just unveiled revisions to its frequent-flier program for 2009, a=
nd
the industry is buzzing about Ryanair's proposal for very low-cost
transatlantic air service. Both are a bit of a surprise: United's because
the changes are less than I expected, and Ryanair's because the change -
if it happens - would be big. Here are the details:
   Changes to United's basic Saver awards for travel in coach/economy,
effective Jan. 1, are modest. Here are the figures for a round-trip award
ticket for the three most popular destinations (award patterns to other
destinations follow the same pattern):
   -- Continental United States and Canada: 25,000; no change.
   -- Hawaii: Old 35,000; new 40,000.
   -- Europe: Old 50,000; new 55,000.
   Saver awards in the next class - first-class domestic, business overseas=
 -
are up a bit more domestically, a lot more to Europe:
   -- Continental United States and Canada: Old 45,000; new 50,000.
   -- Hawaii: Old 75,000; new 80,000.
   -- Europe: Old 80,000; new 105,000.
   United's new upgrade formula, effective July 1, shows a major shift: The
addition of cash co-payments for upgrades from the cheaper coach/economy
tickets. Here are figures for one-way upgrade awards to same three
destinations:
   -- Continental United States and Canada: The mileage, 15,000, remains the
same, but with a $50 co-pay.
   -- Hawaii: The mileage, 15,000, remains the same, but with a $250 to $500
co-pay.
   -- Europe: The new mileage, at 20,000, is actually lower than the current
30,000, but the co-pay is $250 to $500.
   The co-pay amounts depend, says United, on a combination of the route and
the class of your economy ticket. But the net effect is that anyone
seeking to upgrade the least-expensive economy ticket to Hawaii, Europe or
other long-haul destination, will have to buy the ticket and add a co-pay
of $1,000, round trip. United, incidentally, isn't the first airline to
add a co-pay; Continental has had it for some time on some awards.
   As with frequent-flier programs generally, whether United's new award
schedule will be good for travelers depends entirely on how many seats on
popular routes it makes available at Saver award levels. And that's
impossible to predict.
   United's new award system comes as a bit of a surprise. I had really
expected it to follow Delta's move to a three-tier system. Given this
divergence, it's anyone's guess which way American, Continental and US
Airways will go when they update their programs.
   Ryanair, the big low-fare line based in Ireland, created quite a stir
among the industry's mavens with an announcement that it planned to fly
from Ireland and other big European cities to Boston, Florida (probably
Orlando), Los Angeles, New York and San Francisco for rates starting at 10
euros (about $12.55) each way. That's not a misprint - it's really 10
euros. But don't pack your bags quite yet:
   -- Service won't start until late 2009 or early 2010.
   -- Only a few seats will sell for as little as 10 euros - nobody could
make money doing that - the average economy fare will have to be at least
100 to 150 euros each way.
   -- Economy seating will be really, really cramped, and you'll pay extra
for virtually everything beyond just the seat.
   Ryanair also said it would have a "very expensive" business class. That
idea strikes me as a nonstarter: It's hard to see how Ryanair could
compete with the giants in offering an opulent and expensive business
class. What the market really needs is a low-priced business or premium
economy option, not a me-too business class.
   The mavens have largely been negative, concentrating on all the reasons
Ryanair couldn't make the plan work. And, to be sure, earlier low-fare
attempts to crack the transatlantic market - most notably People Express,
Laker and World Airways - didn't survive long. But Ryanair has a history
of piling up nice profits while undercutting the dinosaur lines by a wide
margin, and it could use those skills to survive and prosper in the
competitive transatlantic market.

Tribune Media Services ----------------------------------------------------=
------------------
Copyright 2008 SF Chronicle

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