So, about Starnet blocking…..

OK, I’ve promised a post about my conversation with Mileage Plus executives at the Freddies last week. For those hoping for something juicy, move along, there’s nothing to see here, sadly.

The one thing I realized from talking to Mileage Plus executives is just how convinced they are about Starnet blocking. I’ve been “fighting” this nasty policy for a long time, but now more than ever I’m convinced they won’t change their stance, no matter how much negative feedback they get.

For the most part it was the same old excuses. We have to manage our inventory to stay competitive, etc. I think I made most of the logical arguments: other airlines don’t do it, you’re annoying your best customers, etc.

I did bounce a couple of ideas off of them as well. First, how about not blocking award availability for top tier members. That was met with a straight “no.” Another suggestion I made (just to see how open they’d be to it, not that I’d actually want this to happen) is that they might want to consider charging a premium for otherwise blocked flights, making it a “standard” Star Alliance award of sorts. They logically responded with “Well, how would you feel about paying even more for premium award tickets?” Fair enough, and I’m actually kind of happy they’re not considering that.

The most basic argument they made was that just like any other department, Mileage Plus has a budget. If they didn’t do any Starnet blocking they’d have to take away benefits in other places. They feel they’re striking the best “balance” between other benefits and award inventory. When they try to simplify it like that, I don’t really disagree. Nonetheless I suggested a bit of flexibility and maybe re-evaluating their budget, considering the amount of money they’re making from their co-branded credit card, and that those people just earning credit card miles (as opposed to flying) greatly increase the number of people competing for an ever decreasing number of award seats.

I did get a few myths uncovered. First, Mileage Plus executives insist there’s no quota which is reset at the beginning of the quarter resulting in less blocking during those periods, which some people theorize. Second, on a different note, we talked a bit about Global Services. I’ve never been convinced that Global Services qualification criteria are market based (meaning having an address in Mexico gives you a better chance at Global Services than an address in Chicago, for example), so I asked them whether there was any truth to that. They insisted that it doesn’t matter where you live, as location isn’t a factor in determining who qualifies for Global Services.

So in retrospect were there any real surprises? Nah, not really. At first I kind of saw where they were coming from, and I actually found the “we have a budget” argument to be simple and logical enough on the surface, but that’s probably because I’m used to the totally ridiculous arguments they try to put up.

Of course there was a bit more detail which went into the whole thing on their end, but I’m not going to get into all of that.

Filed Under: Awards, United
  1. No surprises, but a few thoughts:
    1) It would be nice to have an online system for members to search for inventory so we didn’t tie up the agents’ time. The downside is that this may cause more partner redemptions.
    2) I’d like to see them consider doing something about the practice that some members engage in where they hold award tickets up until a week before the travel date then cancel them. This holding then dumping takes up valuable award space for others. Perhaps a cap on the number of awards that one can cancel per year? Say 8-10 to start?
    3) Glad to see that GS is not location specific. I always felt that was a bit suspect.

  2. DL/NW started allowing only 2 award cancellations per year for Plats, so I doubt it’s far off. That said, it will be a HUGE devaluation of 1K! You do realize that along with no cancellations, you probably won’t be able to make changes to awards, and hence make the kind of tweaks that optimize the trip?

    And sorry Lucky, I have trouble accepting the business is business argument on this. It’s just more hogwash. Quite honestly, businesses need to make money arguments can be used to justify almost anything — and frequently are!

  3. Did you specifically ask about unblocking routes they don’t fly themselves?

    I realize that still costs them money. But if a customer uses miles for a route UA doesn’t fly (on which they can’t make money), maybe he/she winds up buying a revenue ticket down the line that would otherwise be an award…

  4. Maybe I haven’t fully embraced the concept of premium travel yet, but I don’t really mind flying UA (vs. partners) if UA gets me there and it’s easy enough to get an award (I don’t want to spend more time on the phone finagling the ultimate routing than I then spent on the flight… sleeping). But the blocking hurts me where I need a partner award because UA isn’t flying the route. So personally I’d rather see them block all partner availability on overlapping routes and instead open up access to seats that require flying a partner airline.

  5. The problem with StarNet blocking is that if you’re a non-elite one or two trips a year flyer then there’s basically no reason to use mileage plus (versus US DM or Air Canada). Now, if United were to say “that’s fine with us, we only care about elite flyers” (which is somewhat the message they say with the concept of Economy Plus and a la carte pricing, and not necessarily a bad strategy) that’s fine.

    The problem is, as you pointed out, given how much of United’s revenue comes from Chase, in the long run, they cannot continue to market a non-competitive credit card. And once they are “found out” UA MP’s budget will be far worse than if they remove StarNet blocking.

  6. I just don’t buy that by eliminating *net blocking, MP will suddenly be unprofitable.
    Maybe by saying “budget”, they mean they have a set profit that they have to make?

  7. Lucky — Great work clearing up some long unanswered questions. I’m not sure I see how “we have a budget” is that much different from “we have to manage our inventory to stay competitive.” It sounds like the same old excuses to me.

    I hadn’t realized how reliant UA is on the co-branded card. That’s very disturbing for their long-term future.

  8. I made Global Service on about $16K of spend in 2008. That was down from my annual $20K/year spend. I’m based out of a dinky little US airport that shall remain nameless, but given the $ that some people spend (yet don’t get GS), I have trouble believing that the market isn’t a factor.

  9. Very good info – Do you happen to know if they’re still using this practice? I was about to sign up for a United Mileage Plus card, but if United makes it this hard to use your miles, screw them I’ll go with someone else 😛

  10. @ Justin — UA does indeed still engage in the practice of Starnet blocking, unfortunately. If you have no other affiliation with United, I would most definitely go with a different program, like Continental or Aeroplan.

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