Well, it’s happened. The first frequent flier program to officially change to a revenue-based accrual model in 2013 is… Sun Country’s Ufly. Yeah, not earth-shattering at all for most readers.

And in doing a little background on the program, it appears the previous incarnation of Ufly was more akin to the former Southwest system where a flight – no matter the distance – earned a set number of points. Five points were awarded for coach travel and seven points for first class. Once you racked up 100 points, you were eligible for a free ticket.

Now, Ufly members will earn 10 points per dollar on the base airfare. Redemptions start at 6,500 points and Sun Country revenue manages those redemptions based on peak/off-peak flight demand, distance and other factors as shown in their example chart below.

Sun Country Ufly Redemption Calendar Example

So if I wanted a weeklong trip from Minneapolis to Orlando leaving on a Saturday, it would cost me 40,000 points roundtrip, the equivalent of spending at least $4,000 on base fares to accrue that amount of points. Perhaps that is indeed a fair price, but it’s shocking to me as a mileage-based junkie who earns similar free tickets at much lower spend. But again, that’s just me… a flier who needs to wake up and smell the eventual new reality.

Which Legacy U.S. Airline Will Be the First to Throw Down?

Many airlines, especially non-U.S. carriers, have had revenue-based programs for years. And it’s increasingly likely our beloved mileage-based programs here in the U.S. are slowly on the way out.

Southwest now has a revenue-based model, Virgin America launched Elevate from the get-go as such and rumors (I really should say all-but-certain-truths) abound that the legacy airlines will follow suit. Delta is frequently named as the large airline most likely to come to bat first with the change.

And call me crazy, but I read into the introduction in my United Airlines Premier 1K credentials kit that arrived last week (bolding mine):

Darren,

Congratulations on achieving MileagePlus Premier 1K status. We truly value your travel spending and flight activity with United, and we look forward to providing you with exceptional privileges to make your experiences with us more rewarding.

A quick glance at previous years’ kits didn’t have the “travel spending” language. They were more flowery with words or phrases like “loyalty” and “your business.”

I think Delta will definitely be first to announce a change, followed by United. Depending on what happens with a possible American-US Airways merger, I think they’re both just too busy to work it out this year.

Which major airline do you think will be first?

Related posts:

US Frequent Flyer Programs Focusing More on Revenue

Stick With United as a 1K or Switch to Virgin America as Elevate Gold?

Looking Back at 2012 and What’s In Store for 2013

In other airline, hotel and travel industry news last week…

• Delta Air Lines introduced new ancillary options available at booking called Trip Extras. The initial offerings are priority boarding starting at $9 per segment, a mileage booster starting at $29 for 1,000 miles (terrible value!) and a 24-hour Wi-Fi pass for $12. Since Delta’s own blog mentions them as being the “first offerings” to be available at booking, Trip Extras will certainly be expanded further growing the ever popular unbundling and ancillary product trend.
• Virgin America announced it will begin service to Portland, Oregon on June 5, 2012 – its 18^th destination. The airline will fly two daily roundtrip flights PDX-LAX and one PDX-SFO. CEO David Cush is hoping their entry will bring fares down noting, “Although there are strong business and leisure travel ties between California and Portland, the West Coast-to-PDX market generally has higher fares than similar flights to Seattle and the reason is competition.”
• I posted some of the insights I gleaned from United Airlines’ presentation at the J.P. Morgan investors’ conference last week and Southwest Airlines also participated revealing they expect to realize a first quarter 2012 loss. Citing an average fuel cost of $3.50 per gallon, Senior VP-Finance and CFO Laura Wright said, “Based on the current revenue and fuel estimates, we currently do not anticipate a profit in the first quarter.” The first and fourth quarters are typically the most challenging for airlines and given Southwest has earned a full-year net profit for 39 consecutive years, I wouldn’t be too worried as an investor.
• Besides the already reported new flights by American and United out of Washington’s Reagan National Airport, Air Canada, Alaska, Frontier, JetBlue, Southwest, Sun Country and Virgin America have applied for a piece of the remaining four slots open to “beyond perimeter” flying out of DCA. Both JetBlue and Southwest are hoping to begin service to Austin, each claiming United has a high-priced monopoly on their existing service from nearby Dulles International Airport.
• Google’s Flight Search expanded its legs last week and now offers U.S.-based users the ability to search international fares and flights. I honestly haven’t been back to it since my initial underwhelming review of the ITA Software-powered search tool, and probably won’t return until I start hearing rave reviews. It might be a good tool for the general traveler with simple flight search needs, so perhaps my more advanced knowledge and ITA Matrix experience is jading my opinion.
• Hyatt Hotels plans to install new TV technology allowing guests in North American properties to stream movies from their own Netflix or HBO accounts, as well as connect their laptops to use other services. Guests will have to pay the $9.95 daily internet charge to use the service, which will include the ability to request items from housekeeping, order room service and get information on local restaurants and city tours.