United Airlines has announced an increase in fees for its annual airport lounge membership and rewards credit cards. This move tests how much consumers are willing to pay for popular travel perks. The carrier introduced these changes alongside sign-ups bonuses for its co-branded cards from JPMorgan Chase, as well as new cardholder benefits including ride-share credits and award flight discounts.
Richard Nunn, chief executive of United’s MileagePlus loyalty program, stated that while there are fee increases, the value increments and benefits delivered outweigh any cost increase. United has been working on these changes for about a year.
Airlines have been progressively increasing prices for various services such as checked bags and seat assignments, offering perks that were once free when customers sign up for co-branded credit cards. United added approximately 17 million Mileage Plus members over the past couple of years, viewing new card perks as a way to encourage more flyers to sign up.
Loyalty revenue, including from rewards credit cards, has significantly benefited airlines. United reported $3.49 billion in ‘other’ revenue last year, up 10%, mainly due to increased co-branded card spending and other non-airline partners, as well as airport lounge memberships.
Starting now, United offers two tiers of memberships to its United Club airport lounge network. Individual memberships will cost $750 annually or 94,000 United loyalty points, granting access only to the passholder. For customers wishing to bring up to two guests, it will cost $1,400 or 175,000 miles, for United Clubs and Star Alliance partner lounges.
Credit card fee changes include: The United Explorer card increases to $150 annually from $95, with additional benefits like a $60 rideshare credit. The United Quest card rises to $350 annually from $250, including $100 in rideshare credits, two upgrades to extra legroom seats, and $200 in United travel credits. The United Club Infinite Card goes to $695 annually from $525, including an annual lounge membership, $150 in rideshare credits, and the ability to earn Premier 1K elite status through card spending and bonus qualifying points.
— news from CNBC
