United Airlines Holdings Inc. is overhauling its loyalty program, offering more benefits to customers who carry the airline’s co-branded bank cards while reducing some rewards for budget flyers.
Primary holders of its MileagePlus credit and debit cards will get at least 10% off flights booked using miles, known as award tickets, with savings rising to at least 15% for Premier elites who also carry a co-branded card, according to a Thursday statement from the Chicago-based carrier.
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Cardholders will be able to earn twice as many miles per dollar for flights as MileagePlus members without a card.
United is also moving to restrict miles earned on its cheapest fares. Once the changes kick in on April 2, MileagePlus members will need a co-branded card to earn miles on basic economy flights.
The announcement adds to a slate of MileagePlus changes that tie perks and earning power to credit-card relationships. Like rival carriers Delta Air Lines Inc. and American Airlines Group Inc., United has been leaning on its loyalty program to drive profits.
The shift comes as airlines double down on their most lucrative customers, even as many Americans grapple with higher costs for groceries, housing and utilities. Budget-conscious travelers — who are more likely to book basic economy fares or skip annual-fee credit cards — risk falling further behind in the industry’s rewards system.
Loyalty programs generate billions of dollars annually from banks and help cushion carriers when ticket demand weakens, giving airlines an incentive to reward cardholders and elite travelers.
“The most rewarding way to fly United is as a MileagePlus member, and the best way to get the most value from the MileagePlus program is to have one of our credit or debit cards. MileagePlus is designed to reward loyalty to United,” said Andrew Nocella, United’s chief commercial officer, in a statement announcing the change.
Carriers are competing more aggressively over loyalty revenue amid softer domestic fares and rising costs, with airlines looking for ways to lock in high-spending travelers and monetize their massive mileage balances.
American Airlines has said it will offer free in-flight Wi-Fi to loyalty members this year, while Delta and Southwest Airlines Co. have rolled out similar perks aimed at frequent customers.
