Matthewonlive and let's fly

Award Ticket Fee Changes on United Airlines - You Win Some, You Lose Some

I credited United for taking a step in the right direction when they eliminated close-in "processing fees" for award tickets in 2009. These fees, charged simply for the convenience of booking an award ticket within 21 days of travel, amounted to a tidy little revenue generator for UA. When last-minute airline tickets had to be purchased, what was the better option: $800 or 25,000 miles + taxes and a $100 fee? Most people (myself included) would choose the miles and fee.

Now, in an effort to make the Continental OnePass and United Mileage Plus award programs more "consistent," United will re-instate the close-in booking fees on June 15th. 1Ks and Global Services members will continue to be exempt, but even Premier Executives will be hit with the fee.

The news isn't all bad, though. UA is cutting other change fees that will benefit most Mileage Plus members. Routing, connecting city, and airline change fees will all go down and be charged in varying amounts based on status. Cancelation and re-crediting fees will also drop for all elite members of Mileage Plus. And for good measure, airport ticket fees will drop by $5.

Here's the new fee chart:

For transactions
before June 15, 2011
For transactions
on or after June 15, 2011
Fees to book an award1 All members General
members
Premier Premier
Executive
Global
Services
and 1K
Booking an award ticket through United Reservations USD 25 USD 25 USD 25 USD 25 No fee
Booking an award ticket at a United ticketing counter USD 30 USD 25 USD 25 USD 25 No fee
Book an award ticket less than 21 days before departure No fee USD 75 USD 50 USD 25 No fee
For transactions
before June 15, 2011
For transactions
on or after June 15, 2011
Fees to change an award or
redeposit miles1
All members General
members
Premier Premier
Executive
Global
Services
and 1K
Changing a date
(same routing and class of service)
No fee No fee No fee No fee No fee
Changing your flight
(same routing, date and class of service, but different flight number)
No fee No fee No fee No fee No fee
Changing your origin or destination city
For tickets issued before June 15, 2011
For tickets issued on or after June 15, 2011
USD 150
N/A
USD 75
USD 752
USD 75
USD 502
USD 75
USD 252
No fee
No fee
Adding, changing or removing a
connecting city

(includes changing a connecting city to
a stopover city)
For tickets issued before June 15, 2011
For tickets issued on or after June 15, 2011
USD 150
N/A
USD 75
USD 752
USD 75
USD 502
USD 75
USD 252
No fee
No fee
Changing one or more flights in your
itinerary to a different airline

For tickets issued before June 15, 2011
For tickets issued on or after June 15, 2011
USD 150
N/A
USD 75
USD 752
USD 75
USD 502
USD 75
USD 252
No fee
No fee
Cancelling your trip and re-crediting miles
(Note: Miles can only be re-credited when cancelling a completely unused ticket. Call United Reservations at 800-864-8331 to initiate the miles re-credit.)
USD 150 USD 1503 USD 1253 USD 1003 No fee

Despite the positive changes in this announcement, I think United has taken a step-back by brining back close-in processing fees. They must have been too lucrative to pass up...

I also think the charts above are a bit misleading--currently 1K and GS members are already exempt from all award fees. The chart above implies that right now they are not.

With fuel prices rapidly rising, the skies don't look all that rosy for United-Continental. For that reason, I cannot blame them for making the business decision to bring back certain fees. And with change fees now lowered, if you find a better routing, it won't be so painful to make the change. Nevertheless, despite personally being insulated from all these fees I cannot help but to be a bit crestfallen that UA would bring back a fee--almost like Lufthansa.com's booking fee--with no way to avoid it unless you have the luxury of knowing where you need to go more than three weeks before your departure.

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Comments

#1
Gray April 14, 2011 at 07:10 pm

Really cogent analysis, Matt. I have to say - and, I've said this on FT as well as other blogs, perhaps sounding a bit akin to a gong-clanging profit heralding the apocalypse, but I think we're heading back to 2008 standards, especially with United. The airline, even with new management, and optimism, cannot continue to expect their excellent (for them) combination of high loads and high fares. Simply - fares are going to run too high for many people to afford to fly, and loads will summarily drop, and while UA can try to cut capacity even more, eventually they will reach a capacity cut limit, and will have to cut fares, while raising fees inversely. 2008 and 2009, were, in my opinion, the best years to fly, with ample DEQMs, the famous 240 RT SFO - JFK fares, and more overbookings. Yes, the economy has recovered more since, obviously, but the cyclical nature of the airfare world is on us again, I feel.

Especially with the advent of these fees, I think we're seeing a slow demise of United's pricing hubris.

Now, let's see a DEQM promo ;-D.

#2
FriendlySkies April 14, 2011 at 07:17 pm

IMO, this is a BAD move for UA.. Feels more like we are turning into CO.

#3
Kevin April 15, 2011 at 07:28 am

@Matthew, great post! Selfishly, i couldn't help but only pay hard attention to the far right column... and it looks pretty good to me.

@Gray, Those SFO-JFK fares aren't gone for good. I'm flying R/T SFO-JFK in two weeks, and my 1-way was $99 and only $159 on the way back. I've paid up to $700 for a R/T this year, but this is not the first time that I've had a sub-$300 fare!

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