United Airlines raises lounge, card fees amid financial pressure

00:00 Speaker A

United Airlines is rising this morning. They’ve announced they’re raising the annual fees for the co-branded Chase credit cards and yearly lounge passes. In the past lounge passes, they ranged from $550 to $650 annually depending upon your loyalty status and they included unlimited visits to United Clubs, entry for two guests and access to other participating lounges. Now, United has introduced two options: an individual unlimited entry plan at $750 annually and an annual all access membership that covers two guests and entry to partner lounges for $1400. And that’s to mention, not to mention the price hikes for each of these airlines credit cards with Chase, you can see the changes on your screen there below. Okay. So, now that we boil all of this down, this is in recent years just one of the newest changes that’s come forward on the card side. Of course, there was a little bit of chagrin that customers of Delta had a couple years back. They then reverse course and ultimately there’s been a lot of focus on how all of these airlines can add even more for the premium flyer and passenger out there.

02:25 Speaker B

I I think it’s just the latest example that flying keeps getting worse, and it’s really hard to train consumers to expect less when we’ve gotten used to more. And that’s exactly what you’re getting when it comes to these lounges here. You are going to have to pay more for less, essentially. Uh and this is after, you know, a slew of other airlines doing the same thing. We’ve seen uh JetBlue catering to the higher income consumer. We’ve seen Southwest getting rid of some of the features that their guests know and love here. And I think it’s all in reaction to the profit margin pressure that we have seen off the back of lowered business travel, which we know, and you’ve covered this so much, Brad, this is the primary driver of revenue, the biggest revenue driver for a lot of these airlines. Business travel has not roared back post-pandemic the way that many airlines might have previously thought, and now they have to appease their shareholders with some way of increasing revenue and they’re looking at the everyday consumer.

04:02 Speaker A

No, it’s a great point. I mean, one of the airlines biggest competitors out there is a non-airline company called Zoom. And so if you have enough people that are able to just have And of course, there’s still the amount of business travel has not nearly rebounded to what it was, but there is still a considerable amount of those profits to your point that they rely on those business travelers for, uh, knowing that there’s a more more propensity to spend usually from those corporate travelers as well, especially when you’re just putting it on the company.

05:06 Speaker B

Yeah. Absolutely.