United-Continental Merger: Frequent Fliers Will Be Pleasantly Surprised

While it's possible that travelers may get slammed with higher fares and fewer flight options, there is one great perk that will come out of the marriage between UAL Corp.'s (UAUA) United Airlines and Continental (CAL): the frequent flier program. Once the two carriers merge their operations, the resulting program will effectively cover the globe and include a host of hotels -- and pretty much every car rental agency.

United's Mileage Plus and Continental's OnePass are already considered to be among the more robust loyalty programs in the business, allowing passengers to earn and spend miles in a variety of ways, says Gary Leff, a frequent flier program expert and writer of the View from the Wing blog. Combining the two will create a powerhouse frequent flier program, he says.

"(Our customers) will continue to benefit from service to over 1,000 destinations, more connecting opportunities, additional scheduling flexibility and access to leading reciprocal frequent flier and airport lounge benefits," the airlines said in a statement Monday.

Miles redemption will be available among the 24 Star Alliance partners, which include Air Canada, Lufthansa, Air China and U.S. Airways. Pick a national hotel chain, and it is likely covered under one or both programs.

Questions Remain

The airlines said that once the merger is approved, the new program will include features from both of the current programs. No customers will lose any accrued miles and it's likely customers will be able to combine miles from each program. Also, for the time being, customers will continue to receive mileage credit when using Mileage Plus Chase Visa credit cards or One Pass credit cards. Although, this is not a sure thing following the merger.

Leff, who racks up about 100,000 air miles each year, says there are still some questions about what the final merged program will look like. One big question is whether Continental's program through American Express (AXP) will continue after the merger. United owes Chase (CCF) a huge debt for having financed the airlines through its bankruptcy, and it may not want to compete with American Express.

"Either way, customers will likely be able to combine miles from both programs, and if one credit card goes away, it won't happen overnight," says Leff.

Continue to Redeem and Earn Points With Caution

The California Society of CPAs weighed in on the issue, saying that frequent flyers of both airlines should continue the practice of booking early (to nab reward seats before they are snatched up) or very late (to grab the seats that become available).

Also, check fees for mile-accruing credit cards. Paying $80 a year for a Mileage Plus Visa could take as much as three years to earn a free ticket. Meanwhile, the fees add up to $240, but some tickets cost less than that.

The best chance for taking advantage of the programs is to move into "elite" status, and cash in on the perks that come with frequent travelers.

"Squeak into their league -- so-called 'elite' status usually requires 25,000 flight miles (as opposed to miles accrued on a credit card) in a calendar year -- and you'll be ushered into a world of early boarding, guaranteed upgrades and reams of bonus miles," says David Colgren of the CalCPA. "So if you take more than four long-haul trips each year, it pays to stick with a single carrier."

In this case, it may pay for that carrier to be United-Continental -- potentially the biggest airline in the world.

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Mark Finstein

But have you checked the fare to Houston from Chicago since this started? Used to be a reasonable $300-$350 trip. Now almost $800.

October 22 2010 at 11:50 AM Report abuse rate up rate down Reply