United woos Gen Z by dangling discounts — and carbon offsets

Study: Most born after 1996 fret about travel’s eco-impact.

United is pledging to offset carbon emissions for the first 25,000 people who take advantage of the promotion.

Airlines are known for trying to please their high-rolling frequent flyers, the ones who pony up for business class seats and master the airport lounge life. But with an eye on the very long term, executives at United Airlines are reaching out to up-and-coming travelers who might be starting to book flights on their own.

The carrier recently announced a new promotion to reach the oldest members of Generation Z: travelers ages 18 to 22.

“They represent a smaller portion of our customers today,” says Luc Bondar, United’s vice president of loyalty and president of its MileagePlus program. “But we know that they are going to be an increasingly important customer segment for us going forward.”

United is offering a discount of up to 10% on flights booked between now and the end of the year for passengers ages 18 to 22. There are some rules: Flights must be booked through the airline’s mobile app; passengers have to be members of the loyalty program; and discounts are available only for economy or the no-frills class known as “basic economy.”

Flights within the United States, Canada and Mexico will be discounted 10%, and international flights that are sold in the United States and originate there will be discounted up to 10%.

And in a nod to concerns about the environmental impact of flying — see Gen Z member and climate activist Greta Thunberg’s recent boat trip across the Atlantic — United is pledging to offset carbon emissions for the first 25,000 people who take advantage of the promotion.

“There is a level of activism and awareness around the decisions that we make every day that is probably more pronounced than older generations, and so it absolutely played into sort of the planning and decision process here,” Bondar says.

Global research released earlier this year by the travel company Booking. com shows that 54% of those born after 1996, the group now known as Generation Z, say they consider the environmental impact on a destination an important factor when they decide where to go. Fifty-six percent say they want to stay in eco-friendly lodging, and 60% want to use greener ways of getting around once they’ve reached their vacation spot, the study says.

Jason Dorsey, president and lead researcher at the Center for Generational Kinetics, a consulting firm, said members of the group have interests that could be in conflict.

“At a high level, what our research shows is that Gen Z more than any other generation right now is very concerned about the impact on the environment of the decisions that they make,” he says. “At the same time, though, that is running up into the reality of often limited options to accomplish what they want, such as travel. The reality is that they still want to see the world — and as a generation, they feel so connected to it through social media that they physically want to go there.”

At the same time, Dorsey said, the generation is “very frugal” and practical with money. Research from Expedia Group Media Solutions, the advertising arm of online booking company Expedia Group, shows that 82% of Gen Z travelers say budget is a consideration. United’s approach, Dorsey said, is tackling a couple of the roadblocks that might stand between very young consumers and their travels.

“It’s pretty genius in the sense of, ‘We’re going to give you a discount because we want to encourage you to see the world, which you say is important, and we’re going to offset the environmental side effects of the travel,’” he says. “The combination really is a powerful message.”

Bondar said United has not previously made overtures to this generation. And he hasn’t seen other airlines do so either. Air France famously launched a new airline, Joon, in 2017 that was aimed at millennial travelers. It was not well-received, and the brand folded earlier this year, with operations absorbed back into the parent carrier.

“I think the idea of creating an airline or a business that only serves one customer segment when you’re anything like the scale that United has is just inherently a challenging thing to do,” Bondar says. He says that, although most consumer-focused companies have a millennial strategy, his airline wants to know much more about the group that comes next.

“As Generation Z really comes into the market, we think this is just a huge opportunity to explore,” he says.

Dorsey says he’ll be watching to see how millennials handle United’s new Gen Z focus.

“They would love to get the same discount,” he says. “It’ll be interesting to see how millennials react, because for the last 15 years, millennials have been the generation of young consumers everyone has tried to win over. Now in a way, United is saying, ‘No, we’re moving to the next generation.’”