United’s New Subscriptions: Good Deals or Flimflam?

Last week, United launched three new “added benefits for the savvy traveler.” But a closer look raises questions about just who benefits the most—those supposedly savvy flyers or United?

Baggage Subscription: Starting at $349 per year, you can “forget about checked-baggage service charges” and instead check a bag for no fee each time you travel. You have a handful of options:

• Check one bag each time you travel within the continental 48 states ($349 per year).

• Check two bags in the same area ($399 per year).

• Add Alaska, Canada, Central America, Hawaii, and Mexico for an extra $100.

• Add United flights worldwide for an extra $450.

• Add a companion to any of these options for an extra $100.

• Add up to eight companions traveling on the same reservation for an extra $300 per year.

The math is easy. One checked bag normally costs $25, a second costs $35 (or more on some international routes). If you fly only within the 48 continental states, and travel by yourself, you’d have to take 14 one-way trips per year to break even; with two bags, you’d break even at seven one-way trips. A couple checking one bag each would break even at nine one-way trips; a couple checking two bags each would break even at four one-way trips.

The added cost for Alaska and Hawaii makes no sense; regular baggage fees are the same as for travel within the continental 48 states. And the extra $450 for global travel is really weird: Travelers to Asia and Europe get one bag at no charge.

Clearly, unless you travel a lot, the only “savvy” users are couples who take two round-trips a year and check two bags each time. Otherwise, the break-even points are pretty high for typical vacation travelers.

Economy-Plus Subscription: Starting at $499 per year, you qualify for extra-legroom Economy Plus seating on any flight. That base price covers travel within just the continental 48 states. Add North and Central America for $100 and the entire world for $200; add one companion for $200 and up to eight companions for $400.

Here, the math isn’t as clear. The regular cost to upgrade an individual flight varies by length of flight and the specific day and time. But let’s try a few possibilities: Say the normal Economy Plus fee within the continental 48 states is $50, then the one-person subscription pays off at 10 one-way flights and the base-plus companion pays off at seven one-way trips. Or say the regular Economy Plus fee on a flight to Europe is $100; then, the one-person subscription pays off at seven one-way trips and the couple option pays off at five one-way trips. Here again, only a few ordinary travelers are likely to travel that often.

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United Club Membership: You can buy a one-year membership in the United Club airport lounge for 65,000 miles. The regular price is $500 (less for elite frequent flyers), so the promotion values frequent-flyer credit at a bit less than 8 cents per mile. Most folks agree that miles are worth somewhere between 1 and 2 cents per mile, so this offer is pure flimflam.

What About Frequent Travelers: If you’re a frequent business traveler, both subscription deals could look good. But here’s the offset: If you travel on full-fare economy or are an elite-level frequent flyer, you get into Economy Plus without paying extra. And you get one no-fee checked bag if you buy your ticket with a United Explorer credit card.

The Winner: United. United is likely to win big. It will take in more money from subscriptions than by selling the services one flight at a time, and subscriptions will bind travelers even more closely to United.

The Verdict: The only travelers likely to benefit from either subscription are vacationers who take a lot of trips with checked baggage or business travelers who fly a lot but use cheap tickets and don’t fly enough to qualify for elite status. Otherwise, United just rakes in more money.

Ed Perkins on Travel is copyright (c) 2012 Tribune Media Services, Inc.

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