Frequent-flier programs: Continental and United combine travel rewards

Frequent fliers on United and Continental got their first close look on Wednesday at what will soon be a combined travel rewards program that will steer the biggest benefits to travelers who buy the most-expensive tickets.

It's also adding an expiration date, which will be new for Continental fliers.

Most airline frequent flier programs were built on the idea of one mile of credit for every mile flown. That rewards distance over dollars.

In January, Southwest revamped its frequent flier program to base rewards on the dollars paid, not on how many miles the flight was. It said explicitly that it believes some customers will choose a slightly higher fare to get a better reward. Some Southwest travelers were furious.

The combined United program takes tentative steps in the same direction, although most rewards will still be based on distance flown. Travelers flying on first-class tickets will get up to two-and-a-half times the miles flown, and those using business class and full-fare coach tickets will get more miles, too.

The newly merged airline says it's trying to make those tickets — including full coach fares and front-of-the-plane first-class fares — more attractive.

"We absolutely have every intention of acknowledging and recognizing both the frequent traveler, as well as the travelers that are creating the most value (for the airline). We want to make sure that we're providing the right balance to the program to accomplish both of those tasks," said Jeff Foland, president of United's MileagePlus program, in an interview.

Many frequent fliers had worried that United would go much further in basing rewards on dollars paid rather than miles flown.

"It looks like the United folks either blinked, or certainly got cold feet," said Randy Petersen, who found the FlyerTalk.com forum for frequent fliers and now runs another forum called milepoint.com. He gave United credit for pulling back from an idea that clearly would have been unpopular with some travelers.

Miles in the combined program will expire after a year and a half. That's not a change for United travelers. Continental miles had no expiration date, although accounts could become inactive after a year and a half if no new miles were earned. United pointed out that travelers can earn miles through credit cards or other non-airline flying that will keep their miles from expiring.

Besides free trips, one of the main benefits of frequent flier status is upgrades to better seats, and free luggage. Those benefits start at 25,000 miles per year on United's new program, but they aren't as generous as they used to be. Those so-called "Premier Silver" travelers will only be able to check one bag for free, down from two previously. And they won't be able to get an upgrade to the better coach seats, called "Economy Plus," until they check in for their flight. They used to get it when they bought their ticket, and the delay means that those travelers are likely to get upgrades less often.

Those travelers don't spend quite as much as the higher-level frequent fliers, but numerically, there are more of them.

"They may not be the best customers, but certainly they are good customers, and make a significant contribution to United's bottom line," said Tim Winship, who runs the frequentflier.com website.

The combined program has 85 million members, ranging from those who flew once to those who with a million frequent flier miles.

United Continental Holdings Inc., formed a year ago by the merger of the two airlines, is combining them into a single carrier flying under the United name.

Even as airlines try to reward big-spending travelers, many fliers are deciding that frequent flier miles aren't as valuable as they used to be. Their value has been hurt by expirations, more miles being needed for a free ticket and limited availability of seats.

Foland said accessibility of reward seats should stay about the same under the combined program.

The company has said the combined frequent-flier program will be called MileagePlus — the name of United's plan. Continental's OnePass program will end on Dec. 31, and members will later have their credits converted to the MileagePlus program. Continental frequent fliers will continue to get miles and upgrades between the end of the year and the conversion early next year, United said.

The changes announced Wednesday will begin when the two programs are combined early next year.