Yesterday United finally unveiled the details of their 2012 Mileage Plus program.

Many of you probably remember that I posted about rumored changes to the Mileage Plus program back in August based on what I was told by an inside source. Ultimately there were six weeks between when I posted the rumor and the program was officially published, so it’s no surprise that some things changed. Actually, what I was told six weeks ago was spot in, with the exception of two things — top tier status will be called Premier 1K status and not Premier Diamond status, and there won’t be a revenue requirement to qualify for status. Of course that latter point is HUGE.

When I published the rumored changes post it was based on a possible program they were considering. I wouldn’t be surprised if that was the program United was actually planning on implementing until they saw the outcry online over the possible changes. After all, feedback to airlines can make a huge difference. We saw this in the past with the elimination of 500 mile minimums for elites, and also with the expiration of 500 mile upgrades, where online feedback changed their mind.

Anyway, UA Insider‘s post is very thorough and self explanatory for the most part, so check it out here.

If you’re a 1K this announcement is probably a relief, since 1K status isn’t being devalued, at least on paper. The one key thing to keep in mind is that all elites on a full fare ticket will clear ahead of 1Ks on a non-full fare ticket. Furthermore, upgrades supported by mileage or instruments will be prioritized over complimentary upgrades. This means that a non-elite using miles will now clear their upgrade ahead of a 1K hoping for a complimentary upgrade. Does that make sense? I don’t know, on one hand they are paying for the upgrade, so I see where they’re coming from, though I suspect these two changes will impact 1K upgrades in a substantial way.

If you’re a Platinum (or fly more than 75,000 miles per year), you win and you lose. Your mileage bonus goes from 100% to 75%. That being said, you’ll finally clear ahead of those that fly 50,000-74,999 miles per year. So I’d say it’s a wash for the most part.

If you’re a Premier Executive (or fly more than 50,000 miles per year), you’re getting screwed pretty bad. Your mileage bonus goes from 100% to 50%, and you’ll now clear your upgrades behind those that fly over 75,000 miles per year, while it was previously a free for all for those that flew between 50,000 and 99,999 miles per year.

If you’re a Premier you’re also getting screwed. You can now only select Economy Plus seats  at check-in (within 24 hours of departure), and your upgrade window is only 24 hours before departure. Furthermore, you can now only check one 50 pound bag for free.

Overall the changes are… fair. As we saw, it could have been a lot worse.

The one huge positive is United’s new million miler program. They’re literally taking the best of both worlds. When’s the last time that happened with a merger?

United and Continental will be combining previous totals for million miler programs, though starting next year only actual flown miles will count towards million miler (Continental previously counted all elite qualifying miles).

One million miler gets you Gold status, two million miler gets you Platinum status, three million miler gets you 1K status, and four million miler gets you Global Services status. Furthermore, million milers can appoint the same elite tier to a companion, even if they earn a higher status level than their million miler. That means if I were a 1K million miler, my companion would be a 1K as well as long as I maintain it. They just don’t earn the upgrade instruments.

So the only major thing they’re eliminating is a lifetime Red Carpet Club membership at two million miler, but with the other gains with the million miler program, that’s a very fair trade off. And all of this comes as American substantially devalues their million miler program.

Anyway, aside from the new million miler program these changes aren’t really positive. They’re negative for anyone that flies under 100,000 miles per year, and for those that fly more than 100,000 miles per year they’re only slightly negative given that non-elites using miles will now clear an upgrade list ahead of them (don’t expect to clear upgrade lists on Airbus 320 transcons anymore!). Still, they’re better than they could have been…

Per UA Insider on FlyerTalk, United is actually making some positive changes, and there doesn’t seem to be a catch!

Improved long-haul comfort with more flat-bed seats. In September, we’ll begin installing all-new flat-bed seats in the premium cabins on 26 Boeing 767s – 12 Continental 767-400 aircraft and 14 United 767-300 aircraft (the ones currently in a domestic configuration). These aircraft will also have audio-video on demand and in-seat power from nose to tail. As for our three-cabin 777s, these retrofits are continuing with 17 of 46 aircraft complete and another dozen added to that by year-end. All of these aircraft will have advanced in-flight entertainment in First and Business and on-demand entertainment in Economy. To date, we have more flat-bed seats than any other U.S. airline, with 124 aircraft reconfigured to date and 185 once the 767 and 777 fleets are completed.

Wow, so United is actually reconfiguring some of their domestic 767s for international flying. It sounds like they’ll be two cabin planes, as opposed to United’s international 767s, which are currently configured with first class. Regardless, that’s great news, since United’s domestic 767s are among the most uncomfortable in the fleet.

More Economy Plus, and soon. This fall we’ll also begin installing Economy Plus seating on our Continental mainline aircraft. We aim to have it on 38 Continental aircraft by year end (including some of the 767-400s mentioned above) and plus another 100 by next spring. Once we’re done, we will have Economy Plus on over 850 aircraft – more than any other airline. Worth noting: when installing Economy Plus on the Continental aircraft, we’ll be taking Economy Class seats out and leaving First and Business Class cabins intact.

Now this is actually huge news. When United announced that Economy Plus was going to stay, I said to myself “right, but at the expense of how many first class seats?” I figured they’d be taking a row of first class out of Continental’s 737 fleet and adding Economy Plus. But that’s not the case. Instead the Economy Plus seats will come at the expense of “regular” coach seats. Fantastic.

First Class and Economy Plus is coming to all 29 of our United Express Q400s. Enjoy!

First class on United props? Props to United!

Channel 9? Roger that. Our Channel 9 air traffic control audio channel will be added to all Continental aircraft equipped with in-flight entertainment (said another way: everything but the 737-500s). The first aircraft to get it will be our renovated Continental 767-400s, which will begin re-entering the fleet this fall.

More awesome news. I hope they discussed this with their pilots union!

Bigger bins coming to over 150 aircraft. Beginning in March 2012, we’ll nearly double the size of the overhead bins on our 152 Airbus A319 and A320 aircraft. The larger bins will accommodate a standard 22-inch rolling bag with wheels facing out resulting in increased space of 66 percent. At the same time, we’ll also refresh the interiors of this fleet.

I suppose this is good news, though I’m quite puzzled. The A320s already have the biggest overhead bins in United’s domestic fleet. Doubling the size of the overhead bins? Now people will carry on even more crap. At least there will be less of an issue with gate checking bags.

Streaming in-flight entertainment and Wi-Fi are in the works. We’re currently selecting a vendor to provide streaming video in-flight entertainment option on our 747-400 aircraft, enabling customers to access video options via their Wi-Fi-enabled handheld devices, tablets and laptop computers. This would be in addition to the audio-video on-demand currently offered in First and Business Class. We’re also continuing with our plan to install Wi-Fi on our aircraft. Last March, Continental Airlines signed a letter of intent with LiveTV to install advanced broadband Wi-Fi using Ka-band satellite technology on more than 200 737 and 757 aircraft equipped with DIRECTV. Stay tuned on this front, there’s more to come.

United’s gotta do better than this. They’re simply so uncompetitive in this respect. American and Delta are so far ahead on the wifi front that it’s downright embarrassing for United. You can’t be the airline of business travelers without having wifi on most of your planes. How about investing in this instead of bigger overhead bins?

Major facelift for p.s. We’ll be doing a complete nose-to-tail renovation of our popular p.s. fleet, which serve the New York Kennedy to San Francisco and Los Angeles markets. When completed in 2013, these aircraft will be in a two-cabin configuration with 26 flat-bed Business Class seats and 114 in Economy. These aircraft will also offer Economy Plus, power ports at every row, on-demand audio and video and Wi-Fi service.

This is probably a wash. On one hand PS planes are going from 38 premium seats to 26 premium seats. That means upgrades are getting much, much tougher, not only because of the reduction of premium seats, but because of the increased competition for those seats, since there will be about 50% more coach seats.

On the other hand, Economy Plus and audio and video on-demand are a huge step up from the current PS coach product.

So on the whole these are positive changes, and answer a lot of questions that were left about the merger. Now let’s just see what Mileage Plus looks like in 2012 (hopefully not like this).

Reader David asks the following question in the Ask Lucky section of the blog:

Hi Lucky,

With the recent AX MR promos and sign-up bonuses, I have a good amount of MR points. Sept 30 is coming soon, I’m not sure how much I should transfer to CO, or if I should stay put for an actual redemption. I prefer CO/UA b/c I have 1K status, and like being able to change award itineraries without fees. Also, their taxes & fees seem to be very reasonable. What do you think? Is there value in make SQ or NH transfers and redemptions?

For those of you that have no clue what David is talking about, the relationship between American Express Membership Rewards and Continental OnePass is ending on September 30. Not only will American Express Platinum members no longer get access to Presidents Clubs, but Membership Rewards points will no longer be transferable to Continental OnePass.

To answer the question, if you had asked me at the beginning of the year, I would have said no way, keep them in Membership Rewards. If you ask me now, the answer is maybe.

A lot has changed with Membership Rewards points since earlier this year.

Previously I transferred 90% of Membership Rewards points to Air Canada’s Aeroplan frequent flyer program. Unfortunately back in July they adjusted their award chart, which hit me especially hard since my favorite award redemptions went up in cost by about 50%. For example, travel from the US to Asia via Europe in first class cost only 120,000 miles through Aeroplan — now it costs 175,000 miles. So a lot of the amazing values through Aeroplan are gone, though they still have some good redemption opportunities.

Another one of Membership Rewards’ transfer partners is All Nippon Airways. My favorite redemption on them used to be Virgin Atlantic Upper Class for only 63,000 miles from New York or Boston to London, or 85,000 miles from the west coast to London. That was an amazing value, especially since they didn’t impose fuel surcharges on those redemptions. Well, unfortunately as of a couple of months ago they’re imposing fuel surcharges on those redemptions, adding about $600 to the cost of those tickets. Not looking so attractive to me anymore.

Then there’s Delta. Delta transfers at a 1:1 ratio are never a good deal, though they constantly have transfer bonuses, ranging anywhere from a 50% bonus to a 67% bonus just recently. Those can be good deals, though there are very few aspirational awards to be had through Delta, since they don’t allow you to redeem miles for international first class. That being said, their miles are plenty valuable with lots of flexibility and if you’re willing to settle for a mediocre business class product on one of their partners.

Then there’s British Airways. They recently had a 50% transfer bonus. There are some great redemptions through them on partner airlines (business class to South America on LAN for 80,000 miles, first class to Asia on Cathay Pacific for 150,000 miles, etc.), but I’m not all that confident that they won’t devalue their award chart sometime in the near future. So it’s not a program that inherently makes me want to keep Membership Rewards points.

The rest of Membership Rewards’ partners (Singapore, Virgin Atlantic, etc.) aren’t especially interesting to me, as they don’t offer any spectacular redemption opportunities.

So as you can see, I’m a bit torn. In the past I would have said “leave them in Membership Rewards,” though I’m not feeling especially strong about that at this point.

So I would actually say transfer them to Continental, due largely to the fact that you’re a 1K. This gives you huge flexibility with the miles since you can make changes for free, more than you’d get anywhere else. Through Continental, business class from the US to Europe is 100,000 miles (and you can even fly Virgin Atlantic without fuel surcharges through them as of now), first class to Asia is 140,000 miles (and you can even connect in Europe), and their routing rules are generally favorable.

So if you’re into “aspirational” award redemptions in international first class, I’d say go for it, regardless of your status. The fact that you’re a 1K is the icing on the cake.

I suppose this shouldn’t come as a surprise, but according to the Association of Flight Attendants, United will be eliminating special meals on flights within the US, Canada, Caribbean, and Latin America (though I suspect that refers to Mexico as opposed to Argentina, Brazil, etc., but who knows). It seems that Premium Service flights between New York and Los Angeles/San Francisco as well as flights to Hawaii are excluded from this change.

While many people ordered special meals as a way to get a bit of variety in United’s dining options without an actual dietary restriction, there are still plenty of people with dietary needs that aren’t met by United’s meal offerings. It’s not uncommon for both of United’s first class meal options to be meat dishes, or not meet any of a number of other dietary restrictions.

If this proved to be a major cost I can understand they would eliminate this for people that received complimentary upgrades at their upgrade window. However, it just doesn’t seem right to eliminate this for paid first class passengers.

More than anything else it’s just another move that takes the “worst of both worlds,” as seems to be the trend with this merger.

I’ve gotten a ton of emails over this and have also seen a lot of discussion in other places, so figured I’d make a quick follow up post regarding my post of the rumored 2012 Mileage Plus changes.

First of all, let me say this once again — the first two words of the title of my post were “rumor” and “possible,” so I didn’t post the 2012 Bible of Mileage Plus. I was actually sent that information a couple of weeks ago. Based on United’s response, they indicated that they hope to announce the new Mileage Plus program by the end of next month. Something tells me that things will change over a two month period, so I can’t imagine the program will look exactly as I posted it (unless United is as bad as I was in college, where my rough draft was the same as my final paper, minus the spelling and grammar errors I intentionally put in the rough draft so I could show some level of improvement with the final draft).

Furthermore, they indicated that my post contained “some inaccurate information.” Of course it does, I posted only a small part of the information I was given. For example, I had posted that to qualify for status one needs to fly four segments on United. It should have said four segments on United, Continental, Copa, or Aerorepublica (who the heck are they?). My point is simply that my post contained some inaccurate or incomplete information in the interest of keeping things brief and looking at the big picture. Though they may very well have changed their minds on many things in the meantime, or never actually considered this proposal. Who knows. Regardless, cut them some slack, I’m sure this caught them by surprise.

Let me also answer a few other questions. First of all, there are a lot of questions regarding the revenue requirement, and specifically how United could track revenue. Trust me, they can. All I know is that revenue from United, Continental, and “select joint venture” partners would count towards the revenue requirement. I suspect they’re still trying to figure out what exactly that means as well. As far as booking a ticket with travel on multiple airlines goes, it’s actually quite easy for the airlines to break down the revenue to a per segment basis, so it’s something United could easily track if they wanted to.

The next point of frustration seems to be “how dare United do this on such short notice.” Keep in mind this is the 2012 program, meaning this would be what’s required to requalify in 2012 for 2013. I think that’s plenty of time, given that we’re talking about a huge merger. To many this would be no different than an award chart devaluation, in which case 3-4 months advance notice would be considered plenty.

A couple of additional points I figured I’d share, according to my source:

• Economy Plus would be limited to passengers on the same PNR, except for Global Services members
• When flying coach, Global Services members get a free meal, free drinks, free entertainment (headsets and DirectTv), and free Red Carpet Club premium drink. Diamond members would get the choice of two of those when flying coach, while Platinum members would get to choose one.
• Global Services, Diamond, and Platinum members would get a Global Entry enrollment fee waiver

Regardless of where you stand on these changes, there’s one comment I always find funny — “I bet the airlines wish they would have never started frequent flyer programs.” Really? I’d be willing to bet the two biggest legacies would be out of business if it weren’t for exactly that. Honestly, US legacies nowadays are little more than credit card companies with a fleet of several hundred private jets they’re willing to charter any day of the week in exchange for cash or miles.

And what continues to crack me up about all this is how much easier it gets to earn miles through all means except flying. Back in the day (and no, I’m not too young to use that phrase) mileage running made sense because there weren’t that many ways to earn miles other than flying. A 25,000 mile credit card sign-up bonus was huge. Now some people won’t consider anything less than 100,000 miles.

Besides, who needs to fly to earn miles anymore? Delta will sell them to you for just over a penny a mile, while US Airways will sell them to you for under 1.5 cents per mile.

I think a lot of people are considering loyalty programs too narrowly. Should the airlines be rewarding high revenue flyers? Absolutely. But that customer that spends $20,000 on a full fare ticket to Australia today for a work trip may never fly United again, and may not even have chosen to fly United. It’s the same thing as paying for airport security as part of ticket taxes. For every segment I fly I pay a $2.50 9/11 security tax. I fly about 250 segments a year. Does the TSA reward me for my business? Yeah, I suppose they do with my weekly full body massage. But at the end of the day I’m not choosing to give them my business. To many people, US airlines are no different than the DMV or a colonoscopy.

Meanwhile there might be 1Ks that spend $5,000 a year to requalify. On the surface those might not seem like profitable customers. But that doesn’t consider the fact that they might use the United credit card for all their purchases. Or do their shopping through United’s online shopping mall. Or dine at Mileage Plus Dining restaurants. Or recommend United to their friends, families, and colleagues.

My point is simply that programs should be more than frequent flyer programs. They should be more than “profitable single transaction” programs. They should be holistic loyalty programs that consider a customer’s overall profitability to a company, be it direct or indirect. Somehow telling a customer “you flew 100,000 miles with us this year, but only spent $7,500″ doesn’t give you that warm and fuzzy feeling you may have hoped for. Meanwhile that customer may have spent $200,000 that year on their Mileage Plus credit card, while someone else spent $500 more on tickets but doesn’t have a Mileage Plus credit card.

Of course it’s unrealistic for an airline to track each customer on a case-by-case basis. But the big thing they’re overlooking here is that spending $8,000 a year on United doesn’t make the customer any more profitable than without such a requirement. If I previously took twenty $250 trips per year, I would have spent $5,000. Let’s assume those are transcon trips and United wasn’t making any money on them. I was an “unprofitable” customer. Yet if the above program were put in place, if I fly double as many transcons I would clear the threshold. But guess what? I’m double as unprofitable.

Anyway, with that sermon out of the way, here’s what I’d much rather see airlines pursue, and I realize it’s ballsy, but to me it makes sense if they want to go the path of awarding status based on profitability. Just as they’re potentially considering increasing class of service bonuses for high fare classes, why not make low fare buckets earn fewer miles, be it 50% or 75%? I realize it’s something that would leave many unhappy, but to me it simplifies things. It doesn’t make it feel like the airline is saying to you “hey, give us 100,000 miles AND $8,000″ or else you’re not a valuable customer. Ultimately I’d much rather see things stay the way they are, but if they wanted to go the path of awarding status based on profitability, that approach would leave most feeling a lot less like the cost of their ticket…

Anyway, just my two cents.

This information comes from a reliable source under the condition of anonymity, so take it for what it’s worth. According to my source, below are the terms that United is considering for the combined Mileage Plus program in 2012.

Let’s start with the good news (and trust me, there’s not a whole lot of it for most of us).

Class of service bonuses:

Class of service bonuses for full fare tickets and paid premium cabin tickets will go up substantially, ranging anywhere from 125% for Y, B, and M fares, to 250% for F and A fares.

And now the bad news (get some popcorn, folks):

Status level names and qualification criteria:

Premier Silver:
(a) 25,000 elite qualifying miles AND $2,000 revenue AND 4 United segments,
OR
(b) 30 elite qualifying segments AND $2,000 revenue AND 4 United segments,
OR
(c) $5,000 revenue AND 4 United segments

Premier Gold:
(a) 50,000 elite qualifying miles AND $4,000 revenue AND 4 United segments,
OR
(b) 60 elite qualifying segments AND $4,000 revenue AND 4 United segments,
OR
(c) $10,000 revenue AND 4 United segments

Premier Platinum:
(a) 75,000 elite qualifying miles AND $6,000 revenue AND 4 United segments,
OR
(b) 90 elite qualifying segments AND $6,000 revenue AND 4 United segments,
OR
(c) $15,000 revenue AND 4 United segments

Premier Diamond:
(a) 100,000 elite qualifying miles AND $8,000 revenue AND 4 United segments,
OR
(b) 120 elite qualifying segments AND $8,000 revenue AND 4 United segments,
OR
(c) $20,000 revenue AND 4 United segments

Change in status benefits:

Premier Silver:
– Economy Plus can only be selected at time of check-in
– Only one free checked bag weighing up to 50 pounds per passenger on reservation
– Upgrade window goes from 48 hours to 24 hours before departure

Premier Gold:
– Mileage bonus goes from 100% to 50%
– Upgrade window goes from 72 hours to 48 hours before departure

Premier Platinum:
– Mileage bonus goes from 100% to 75%
– Upgrade window remains 72 hours before departure
– M fares no longer offer instant upgrades for Platinum members

Premier Diamond:
– Upgrade window goes from 100 hours to 96 hours before departure

Change in upgrade priority:

I’ll leave the exact details for another time, though the idea is that with the exception of Global Services members, full fare tickets clear first (so a Silver on a full fare ticket outranks a Diamond on a lower fare) and mileage upgrades with co-pays outrank systemwide/confirmed regional upgrades, which outrank complimentary upgrades. With this, there’s a possibility that fare restrictions will be eliminated on systemwide upgrades.

If the above were to be implemented, suffice it to say this would be a truly radical change. I suppose this would be an attempt to “fire” their most unprofitable customers. I’m guessing 80%+ of elites at each status level already requalify using the criteria above, though for the rest of us, well, that would be the end.

What bothers me about this more than anything, though, is that they’re simultaneously making it much harder to qualify for status unless you usually travel on full fare tickets, while substantially reducing elite benefits. The Gold mileage bonus going from 100% to 50%? Ouch! Silvers not being able to select Economy Plus seats at the time of booking? Ouch! Prioritizing upgrades with miles and co-pays over systemwide upgrades? Ouch!

With these changes United would be making sure that those at each status level are actually not only United’s most loyal customers, but also United’s most profitable customers. For that reason it wouldn’t make sense to me to prioritize upgrades from someone with lower status that’s on a full fare ticket ahead of a higher status passenger on a lower fare. I guess it just follows the general trend of judging a customer’s value to the company based on each individual transaction as opposed to their overall profitability/business/loyalty over years.

It’ll be interesting to see how much of this, if any, comes true. Again, I’m not saying this will be United’s 2012 program, so don’t panic… yet.

This merger is finally moving along at a good pace. Just a couple of weeks ago systemwide upgrade reciprocity was announced between United and Continental. As of a couple of days ago, the same is true for confirmed regional upgrades.

The process is a bit cumbersome. You have to call the elite line (be it Continental or United) and then literally transfer the confirmed regional upgrade to your frequent flyer account with the other airline. This requires your accounts to be linked. So it’s not the simplest process in the world, but it’s now possible, should you want an upgrade advantage on one of those impossible transcons.

While United has long allowed “unlimited domestic upgrades” to be applied on flights from the mainland to Hawaii, Continental operates internationally configured 767s on their routes between Honolulu and Houston/Newark, which they treat as “BusinessFirst” markets. Therefore unlimited domestic upgrades don’t apply on the routes, and the upgrade costs (including co-pays) are steep.

Well, it appears the “new” United will be going the Continental way on those routes. The “BusinessFirst” flights won’t be eligible for upgrades using confirmed regional upgrades. That’s a bit disappointing, given that Premium Service isn’t “unlimited domestic upgrade” eligible either, but confirmed regional upgrades can be applied on that route.

Systemwide upgrades can be applied on the route, though a minimum of a “W” fare will need to be booked in order to be eligible for an upgrade.

So for all practical purposes, Hawaii “BusinessFirst” routes are like any other international routes.

I suppose nothing is “lost” here given that this is the way it was before as well, though my fear is that the new United will operate more internationally configured planes to Hawaii, meaning fewer opportunities for reasonably priced upgrades.

As of today United systemwide upgrades can be applied on Continental flights, and full functionality should roll out on August 1. This is great news and opens up a lot more destinations for United flyers to use their systemwide upgrades on.

To determine Continental upgrade space you can either call Continental or check availability on their website. To check upgrade availability on their website, click on “advanced search” on the main search page, and then on the next page select “OnePass Reward Upgrade.”

On the next page just tick the box for the flights you want to upgrade.

Then the next page will display whether or not there’s upgrade space availability. If there is confirmable upgrade space, the booking code will show as “R” (as shown below).

If there isn’t confirmable upgrade space, there will be a message in red saying upgrade space is not available.

It’s simple as that!

Check out my weekly column over at TravelSort.com. This week I provide an update to my previous post about the status of the United-Continental merger, and what you can do to stay on top of it.