United Airlines Increases Annual Fees: What You Should Know
United Airlines recently announced an increase in fees for annual airport lounge memberships and rewards credit cards, sparking curiosity about consumer responses to these changes. The adjustments include fee hikes for airport lounge memberships and credit card fees, but also introduce new benefits and sign-up bonuses for the carrier’s co-branded cards through JPMorgan Chase. Richard Nunn, the chief executive of United’s MileagePlus loyalty program, emphasized the importance of delivering value and benefits that exceed the cost increments associated with these changes.
Behind the Scenes: The Evolution of Airline Perks and Fees
Airlines, including United, have been gradually raising prices for various services such as checked bags, seat assignments, and other amenities that used to be included in travel packages. The growing number of premium-credit-card holders and elite travelers has led to increased demand for exclusive services like airport lounges. As a response, airlines like American, United, and Delta Air Lines have introduced separate tiers of lounges to accommodate their high-status customers and alleviate overcrowding.
United’s Strategic Moves to Boost Loyalty and Revenue
In a bid to enhance customer loyalty and drive revenue, United has added approximately 17 million Mileage Plus members in recent years. The airline’s decision to update its card perks aims to incentivize more travelers to sign up for their co-branded credit cards. Loyalty revenue, including earnings from rewards credit cards, has significantly contributed to United’s overall revenue, with a notable 10% increase in non-airline partner earnings and airport lounge memberships.
Changes in Lounge Memberships and Credit Card Fees
Starting this week, United will introduce two tiers of memberships for its United Club airport lounge network. Individual memberships will now be priced at $750 per year or 94,000 United loyalty points, granting access solely to the passholder. For those looking to bring along up to two guests, the cost will be $1,400 or 175,000 miles, applicable to United Clubs and Star Alliance partner lounges. Previously, lounge memberships with guest privileges were priced at $650 annually, with discounts available for elite frequent flyer status holders. Existing members will retain their current terms until their membership expires.
On the credit card front, new fees will come into effect for new sign-ups beginning this week, while existing cardholders will immediately enjoy the new benefits. The United Explorer card fee will increase to $150 per year from $95, now offering a $60 rideshare credit. The United Quest card will see its fee rise to $350 annually from $250, featuring $100 in rideshare credits, two upgrades to extra legroom seats, and $200 in United travel credits. Lastly, the United Club Infinite Card will now cost $695 per year, up from $525, and will include an annual lounge membership, $150 in rideshare credits, and the opportunity to attain Premier 1K elite status through card spending and bonus points.
In summary, United Airlines’ recent adjustments to annual fees and credit card perks reflect the evolving landscape of airline loyalty programs and the growing demand for exclusive travel benefits. These changes, while met with some scrutiny, aim to strike a balance between increasing revenue and delivering enhanced value to customers.
