Are airlines moving the loyalty program goalposts?

Who moved my post? / Photo by rbrw - Flickr
Every week or so I get a complaint about the elusive nature of loyalty programs.

They follow a formula: Someone has given all of their business to a particular airline, but when they try to redeem their miles for a “free” ticket or an upgrade, they find it costs a lot more than they expected.

The airline, they say, is moving the goalposts – constantly upping the requirements for one of its hard-to-get perks. And it’s not fair.

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Lately, the object of their scorn is United Airlines, which just merged with Continental Airlines and tightened some of its redemption policies.

For example, Jeffrey Grynkewich, a college student who is making plans to attend a study abroad program in Europe this summer, thought the 65,000 miles he’d collected on United would be more than enough for a trans-Atlantic flight.

“Unfortunately, they had no seats because one of my flights uses a regional carrier,” he says. “I ended up coughing up the cash for the flights in hopes that I could at least use my miles for an upgrade. Unfortunately, in order to request an upgrade — without any confirmation of actual upgrade — it will cost 40,000 miles plus $1,100.”

Wow, that’s a lot of points, not to mention the money.

Lori Dynan booked a United flight from Washington to Maui on United, and wanted to use some of her miles to upgrade on the long flight. She’s a frequent flier, and had successfully cashed in her miles for a better seat on United in the past.

“I was told that the base price of the ticket was $1,250,” says Dynan, who works for National Geographic (which, by way of full disclosure, I also work for).

But that’s not all, a United representative told her. If she wanted an upgrade, she’d have to plunk down an extra 35,000 miles, pay a $500 “processing fee” for the flight to Hawaii and a $450 “processing fee” for the return flight. Then there was a $25 fee for calling United to make the reservation; a $10 mystery fee and $100 in baggage fees.

Her total fare? $2,200.

Mileage programs, she says, are guilty of false advertising.

“What are the perks of joining a frequent flier program when one is charged to use said miles?” she wonders. “This is in essence, paying three times. For the first ticket we purchase, which earns the miles, then the second time when we use the miles to ‘upgrade’ and then the processing fees.”

I asked United about its processing fees, which are not exactly new, but are new to a lot of its customers because of its recent merger.

Technically, the fees Dynan mentions are “co-pays” although its unclear how that is different from a fee. United launched these new fees – I mean, co-pays – in January 2010.

“They permits more fare types to be upgradable, enabling more customers to qualify for an upgrade,” says United spokesman Charles Hobart.

Co-pay amounts vary based on the regions of travel and type of fare, he says. For example, a full-fare United Economy or United Business tickets have no co-pay, regardless of region of travel. Others, like the tickets Dynan and Grynkewich tried to purchase, do.

And that’s how mileage programs go. Read the terms and you’ll see that your airline can change the rules any time it wants to, and you have no choice in the matter.

Well, you do have a choice. You can take your business elsewhere. But that assumes other airlines have more generous mileage redemption policies, and unfortunately, moving the goalposts like this seems to be an industry-wide problem.