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United Airlines to tie frequent-flier miles to ticket price

(Reuters) - United Airlines, moving to sweeten awards for its biggest spenders, on Tuesday said it plans to base its frequent-flier rewards program on ticket prices rather than miles traveled.

The move, effective March 1, 2015, will benefit business travelers, who typically spend two to three times more than leisure passengers.

Members of the MileagePlus loyalty program will receive at least five miles for every dollar spent on base fares and United surcharges, and elite fliers will earn more. For example, Premier Silver level members will earn seven miles per dollar spent, while those at Premier 1K, the top frequent-flier status, will get 11 miles per dollar.

Airlines are looking to cater more to their best-paying customers. Delta Air Lines announced a similar change to its SkyMiles loyalty program earlier this year. JetBlue Airways and Southwest Airlines also tie frequent-flier miles earned to the ticket price.

"What matters to the airlines is revenue," said George Hamlin, an aviation consultant in Fairfax, Virginia. "A customer that provides more revenue is more valuable than one that provides less revenue, even though the one with less revenue may travel more frequently or take more flights."

Industry leader American Airlines Group said it would first seek to combine the American and US Airways loyalty programs after its merger last year. "We are always watching the competitive environment and we’ll make sure AAdvantage is positioned as an industry-leading loyalty program," spokesman Matt Miller said.

Customers who pay more for their tickets have expressed a desire for greater rewards and value from the airline's loyalty program, a United spokesman said. The airline's frequent-flier program has 95 million members.

Travelers can earn up to 75,000 award miles per airline ticket, United said. Taxes and airport charges will not earn award miles.

(Reporting by Karen Jacobs in Atlanta; Editing by Bernadette Baum and Leslie Adler)

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