United Airlines is shaking up its approach to loyalty rewards and lounge access, testing the boundaries of consumer willingness to pay for travel perks. As part of a broader strategy to enhance its customer offerings, the airline announced increases in fees for its annual airport lounge memberships and rewards credit cards. Alongside these changes, United revealed enticing sign-up bonuses and new benefits for its co-branded credit cards, in partnership with JPMorgan Chase. These enhancements include rideshare credits and discounts on award flights, aiming to add value for users despite the increased costs.
In explaining the changes, Richard Nunn, CEO of United’s MileagePlus loyalty program, emphasized the airline’s focus on ensuring that the additional perks provided by these cards surpass the higher fees consumers will incur. “Yes, there are fee increases,” Nunn acknowledged, “but we were very, very cognizant of ensuring that the value increments and the benefits delivered outweigh any increase in the cost of those cards.” The shifts in the card portfolio have been in development for the past year.
Airlines, including United, have steadily increased fees for various services like checked bags and seat assignments—offerings that were previously complimentary—when customers sign up for co-branded credit cards. Additionally, the surge in premium-credit-card holders and elite status travelers has prompted airlines to enhance and expand their airport lounges to accommodate growing demand. American, United, and Delta have rolled out separate lounge tiers for long-haul business class travelers and have developed larger lounge facilities in recent years to reduce crowding.
United has successfully added about 17 million members to its MileagePlus program over the last couple of years and sees the revamped card perks as a way to attract more flyers to its co-branded credit cards. The airline’s loyalty program has significantly boosted revenue, with its annual filing reporting $3.49 billion in “other” revenue last year—a 10% increase from the previous year—largely driven by co-branded card spending and airport lounge memberships.
Starting Monday, United is introducing a two-tier structure for its United Club airport lounge network. Individual memberships will cost $750 annually or 94,000 United loyalty points, granting access to the passholder only. For those wishing to bring up to two guests, the fee rises to $1,400 or 175,000 miles, applicable at United Clubs and Star Alliance partner lounges. Previously, lounge memberships with guest access were priced at $650 per year, with discounts available for elite frequent flyer status holders. Existing customers can continue with their current terms until their memberships expire.
In terms of credit card adjustments, the United Explorer card’s annual fee increases from $95 to $150, supplemented by a $60 rideshare credit. The United Quest card fee rises from $250 to $350, including $100 in rideshare credits, two upgrades to extra legroom seats, and $200 in United travel credits. The United Club Infinite Card will now cost $695 per year, up from $525, incorporating an annual lounge membership, $150 in rideshare credits, and the opportunity to earn Premier 1K elite status through card spending and bonus qualifying points. These new fees apply to new sign-ups starting Monday, while benefits will be available to existing cardholders.
As airlines continue to explore new revenue streams, United’s strategy highlights the industry’s shift towards premium experiences and loyalty-driven financial growth. With these changes, United aims to balance higher costs with enhanced value, challenging the market to adapt to evolving consumer expectations.
Original Source: https://www.cnbc.com/2025/03/24/united-airlines-fees-lounges-rewards-credit-cards.html
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Publish Date: 2025-03-24 21:12:00
