The CEO of United Airlines, Mr. Smisek, was a guest on CNN’s Quest Means Business (November 19) talking about the airlines goal of reducing costs by two billion dollars and the goal of more ancillary revenue.
If you have a chance to watch the show, you should. Unfortunately, I was not able to find a link to the piece on CNN’s website. Edit: LoyaltyLobby reader pointed me the video of this interview that you can access on CNN’s website here.Richard Quest asked from Mr. Smisek if more ancillary revenue would mean more fees for the passengers. Smisek’s reply was no. The fees for selling miles for partners is ancillary revenue as well and he mentioned that selling miles to Chase, the issuer of the United affiliated credit cards in he United States, is very profitable for the airline.
This statement contradicts what the spokesman of United told the USA Today was the reason behind gutting the United award charge and hugely charge more for partner awards in business awards. The reply was that they had to do this if they wanted to continue offering these awards (read more here).
It is surprising that Mr. Smisek didn’t have the talking points right, when it came to the MileagePlus program. I am sure that selling the miles is very profitable for the airline, but United’s communication last month was somewhat contradictory to this.