12
Nov
2008
Posted by: Mark Ashley

Peter Greenberg says it’s time to dump your United miles. Why? He fears the airline is going under.

I worry that United Airlines, which has already wrung everything they could out of bankruptcy, will fail in the fourth and the first quarters—which are the toughest to get through. It’s not a coincidence that most airlines go under in March, because they just can’t get enough money to make it to summer.

I am not sure what other cuts United can make. So, if you have any miles accumulated on airlines like United, I suggest you figure out a way to redeem those miles on their partner airlines.

Peter suggests that United’s misguided hedging efforts, which led to a $500 million loss — outlined on this blog back in September — pushed him over the edge.

Peter is right that you should cash in your miles, but I would argue that you should be doing that, period. United is devaluing their Mileage Plus program (effective January 1), and you should spend ‘em while you’ve got ‘em.

Peter’s suggestion to book on United’s partners is also a good one, especially since the inflight experience is generally superior on non-US carriers. You can’t book those tickets on the United website, and you’ll pay a small fee to book them over the phone, but it’s money well spent.

But…

I wouldn’t single out UA for the deathwatch just yet — yet — but the key phrase is “single out.” None of the major airlines in the U.S. look all that healthy. The ten largest U.S. airlines posted $2.52 billion in losses last quarter, and hedging losses were a culprit for most of them. United may have locked in fuel prices at their peak, but they weren’t alone. By Peter’s logic, we should be cashing in all airlines’ frequent flyer miles.

Now THAT makes a bit more sense…

(Thanks for the heads-up to Sean O’Neill of Budget Travel!)

pixel Time to bail on United miles?

4 Responses to “Time to bail on United miles?”

  1. TravisL Says:

    I only fly once or twice a year, so my miles have never accumulated to the point where I can get a free ticket. I know Northwest sometimes offers magazine subscriptions in exchange for miles. Anything I can use a handful of United miles for?

  2. Andy Says:

    If United tanks (seems unlikely at this point, but who knows), then having an award reservation (made to burn miles) on one of their partners won’t do you any good… it is very unlikely that it would be honored, since that partner airline wouldn’t receive anything for carrying you!

  3. Zé Cacetudo | The Daily Hype Says:

    I switched my Star Alliance miles from Mileage Plus to the Swiss/Lufthansa miles & more program a couple of months ago. If these morons can’t figure out how to hedge against fuel price increases without also locking themselves in at the top (which it appears they did), then they probably don’t deserve to be in this business.

    Good thing I redeemed 95% of my UA miles for a ticket (on Swiss, natch) earlier this year. Done and done. I do believe they’ll be going out of business before the end of 2009.

    A word of warning though – if you take this path as well, be sure to confirm that your mileage will accrue to the other Star Alliance account. Even after making the reservation with my Miles & More #, I found that the boarding passes had my Mileage Plus # on them each leg of a recent trip. It’s a real pain in the ass to switch earned mileage from one program to another after the fact… sneaky little buggers!

  4. michael Says:

    It is people like you that cause widespread panic, and the reason we have this massive sell-offs in the stock market. Everyone relax. Think it through. Oil is at massive lows. UA is reaping the benefits.

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