UPDATE: United has announced that they will indeed be moving towards fully dynamic award pricing later in 2019. See my further thoughts on what this MileagePlus change means for United, the Star Alliance, and the future of frequent flyer programs.
In general in the frequent flyer program world we’re seeing a trend towards dynamic award pricing. In other words, rather than following a simple award chart, award pricing varies by flight, and largely correlates to how much a ticket would cost in cash.
Delta SkyMiles led the way to dynamic award pricing
Delta is probably the industry “leader” when it comes to this, as Delta eliminated award charts several years back, and now consistently uses dynamic award pricing. Their idea is that the price you see online is the price you’ll pay, and award flights should work the same as revenue flights for those purposes.
United MileagePlus increasingly adding dynamic award pricing
Along those lines, it’s interesting to see how United MileagePlus has evolved over time. Several months back the airline removed formal award charts from their website, though United continues to have an “interactive travel destination awards chart” on their website.
The catch is that this no longer really reflects their award pricing, both for better and worse.
For example, lets look at awards between North America and Europe. Here’s the supposed pricing:
As you can see, a saver one-way United business class ticket would cost 60,000 miles, while a “standard” one-way United business class ticket would cost 155,000 miles.
Increasingly lately we’re seeing “random” award costs that don’t correlate to either amount. For example, looking at flights from Newark to Dublin, you’ll see that “Business Everyday Awards” are now listed as sometimes costing 111,000 miles one-way, which wasn’t previously a price.
This isn’t just one route, but rather this concept is pretty widespread. Now, whether or not this is good news really depends on your perspective. If that seat would have otherwise cost 155,000 miles, then paying “only” 111,000 miles is a great deal.
However, if United has reduced the amount of saver premium cabin award space in the process and instead instituted lower priced “standard” awards, then I’d say this is bad news.
Anyway, along these lines, Summer points out that United has also instituted lower pricing on domestic award tickets. According to United’s interactive award chart, domestic one-way tickets should cost 12,500 miles, or they can start at just 10,000 miles one-way for flights of 700 miles or less.
However, in practice we’re now pretty consistently seeing tickets priced lower than that. For example, United has recently introduced awards priced at 5,000-6,000 miles one-way on select short haul domestic routes.
That sounds exciting, though in reality I’m also finding the flights with these low award costs to consistently be priced really low when paying cash. That same flight when paying cash would cost $51 in basic economy or $81 in regular economy, so that’s hardly a deal.
Bottom line
On the surface, and in the short term, United introducing domestic awards starting at just 5,000-6,000 miles one-way is good news. However, personally I’m much more concerned about the overall trend we’re seeing from United MileagePlus as they move towards dynamic award pricing.
We’re seeing more variability than ever before when it comes to United’s award pricing, and I don’t consider that to be a good thing, especially for those of us looking to get outsized value from our miles.
Have you noticed United’s increasingly variable award pricing, and if so, what do you make of it?
NO. Just HELL NO.
I am a ... or rather... I have been until now a VERY loyal United flyer. I'm a million miler in fact. I fly on UA out of my home airport in Orlando even though United it almost NEVER the most convenient airline.
So now my miles that I have diligently worked so hard to accumulate are worth a WHOLE LOT LESS. The big question is whether a 2% cash back card isn't a better deal since my miles are in essence costing the same as cash.
You gyus are way behind the curve... I had given up on United Mileage Plus, as well as Chase Sapphire or United Cards.
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Citi gives x5 points on Travel, x5 on Dining or x3 on Hotels. That's the best way to accumulate points not x2 with Chase.
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For redemption, I convert the Citi Thankyou Rewards points to Avianca Lifemiles for redemption on Star Alliance flights, KLM Flying Blue for redemption on Skyteam and Cathay Asia Miles for One World.
My whole family has been flying United consistently even if they were somewhat more expensive. We are at Platinum and 1K levels. The entire family has been using MileagePlus Club cards.
United already devalued miles by 25% when they increased miles required for international travel. Now this?
We will now definitely shred our MileagePlus Club cards and fly any airline that offers the lowest costs.
I noticed when UA started have "connection" issues with partners, availability changed drastically. Spent months looking for SYD-MLE-CAI-DXB-JFK for December 2019. Finally found route with mostly Biz Saver seats but by the time points transferred it disappeared. Now there's NO availability SYD-MLE and everything MLE-CAI-DXB is Economy and mostly 2 stops over 25-41 hrs. If they don't get Singapore back, picking is going to be very slim. Also think the days of premium award travel...
I noticed when UA started have "connection" issues with partners, availability changed drastically. Spent months looking for SYD-MLE-CAI-DXB-JFK for December 2019. Finally found route with mostly Biz Saver seats but by the time points transferred it disappeared. Now there's NO availability SYD-MLE and everything MLE-CAI-DXB is Economy and mostly 2 stops over 25-41 hrs. If they don't get Singapore back, picking is going to be very slim. Also think the days of premium award travel are numbered as I've noticed more airlines prohibiting premium award travel.
From ANA website:
Award reservations made on Etihad Airways (EY) operated flights will be limited to the codeshare routes between ANA (NH) and Etihad Airways (EY).
Reservation for Singapore Airlines Suites, First Class and Business class cabins are not permitted for award travel on the following Singapore Airlines aircraft (A350-900, A380-800, B777-200ER (retrofitted), B777-300ER)
Flight awards cannot be used for the Beijing-Pyongyang sector that is operated by Air China.
Flight awards cannot be used for Premium Economy Class on EVA Air flights.
Flight awards cannot be used for First Class on Swiss International Air Lines flights.
I noticed this long, long ago -- which is why I switched my loyalty (11 years as a 1K, and 16 years as a MileagePlus elite some level) to Alaska in 2017, and switched my main credit card to the Chase Sapphire Reserve soon afterward. The redemptions over at Alaska are just as dynamic as United's are, but at least the earning is excellent as an MVP Gold 75K, so I come out much better...
I noticed this long, long ago -- which is why I switched my loyalty (11 years as a 1K, and 16 years as a MileagePlus elite some level) to Alaska in 2017, and switched my main credit card to the Chase Sapphire Reserve soon afterward. The redemptions over at Alaska are just as dynamic as United's are, but at least the earning is excellent as an MVP Gold 75K, so I come out much better in the end. Plus, the customer service and upgrades on Alaska have been wonderful.
The one drawback is that I gave up the good last-minute availability in domestic Economy I would sometimes find on United. I used to keep some miles around in case a family emergency arose, to avoid the exorbitant last-minute fares. Now I just keep a few UR points around, which are more useful anyway.
I have to chime in again. All I can say is, this is the most sneaky, drastic and underhanded devaluation I have seen in the many years I am flying on miles. Eco seems the same, but who wants to spend 22 to 24 hours in Eco? Business Saver just about disappeared, and Business Everyday is more than double the miles, and even there they have the gall to offer 'Mixed Cabin' on two out...
I have to chime in again. All I can say is, this is the most sneaky, drastic and underhanded devaluation I have seen in the many years I am flying on miles. Eco seems the same, but who wants to spend 22 to 24 hours in Eco? Business Saver just about disappeared, and Business Everyday is more than double the miles, and even there they have the gall to offer 'Mixed Cabin' on two out of three flights, because they cannot 'afford' to fly me out of Hawaii on their crappy 'business class' with 5" recline, where they run out of your preferred choice of food, if you are further back than row 2, unless you prefer soggy 'cheeseburger'. Huge thumbs down, United !
Wow, I just checked my usual UA award charts, they look horrible. They look even worse than Delta charts. With a lot of flexibility on Delta I was always able to find that 'half way round the world' flight I take twice a year for 70K all three flights in business. On United all I can find now, no matter if last minute, or 342 days out, is 75 K savers once in a blue moon with flipping 'mixed cabin'.
@Robert - If you want to go to Japan, do this...... google Virgin Atlantic airline partners, look under ANA. Find the flight you want for points, move Amex, Citi, or lousy Chase to VS and do it the right way. Search for saver space on UA and ignore their prices. All you want is flight numbers. Fuck UA, they suck just like Delta.
@Robert. I'm seeing plenty of award space from NY to Tokyo from July to September. There are a number of reasonable one stop itineraries on Asiana and ANA in August for 80k each direction. I'm looking at September 5th EWR to NRT nonstop on United for 35k economy and 70k Polaris. I'd book them ASAP though.
Robert, look at Hawaii. United has 45,000 miles a seat with better availability than AA or Delta. And with Southwest in on the deal, fares should trend lower. Hawaiian and Alaska are also significant competitors Best wishes.
The race to the bottom continues! My United platinum status fills me with ennui.
I agree with Russ, even for flying intra Asia. The saver flights all require significant longer hours of layover at very odd airports. What's the point of using UA miles then? When budget airlines can take you from Point A to B for equal or almost lower cost in cash..
Thanks for bringing this up - I'm glad it's not just me who noticed.
I've been saving up miles for the past 2 years to pay for honeymoon tix for this late summer... and it looks like my efforts may have been in vain. Round trip economy tix from NYC area to Tokyo are going for 120,000 miles round trip per person - which is insane since the award chart I think is 80,000...
Thanks for bringing this up - I'm glad it's not just me who noticed.
I've been saving up miles for the past 2 years to pay for honeymoon tix for this late summer... and it looks like my efforts may have been in vain. Round trip economy tix from NYC area to Tokyo are going for 120,000 miles round trip per person - which is insane since the award chart I think is 80,000 miles.
I'm Silver and United gives me "exclusive award availability" for it. It's utter BS - these "exclusive awards" are 29 hour trips between NYC and Tokyo with 11 hour overnight layovers in Houston. And this exclusive availability is 100,000 miles round trip in economy.
My new job will have me travel every week M-TH and I have no desire to be loyal to United with moves like this. Going for status on Southwest is looking mighty good right now.
@Mike,
I understand Chase and others not wanting to be in a losing business proposition. They can cancel the "transferable points - mileage programs" right now, but don't expect consumers to continue using air miles cards. In fact, consumers might want to use cash back cards that give them a simply 2+% cashback. Those will be more valuable than air miles cards.
And don't expect AA, DL, and UA to be able to sell billions...
@Mike,
I understand Chase and others not wanting to be in a losing business proposition. They can cancel the "transferable points - mileage programs" right now, but don't expect consumers to continue using air miles cards. In fact, consumers might want to use cash back cards that give them a simply 2+% cashback. Those will be more valuable than air miles cards.
And don't expect AA, DL, and UA to be able to sell billions of miles to Chase and others for cash. Because that ain't gonna fly no longer. At that point, AA, DL, and UA have nothing left but to compete on airfare only. No more seducing Wall street with Pie-in-the-sky monetary values slapped onto their mileage programs. Because those programs are barreling towards little-if-anything of value.
@Ed, I would suggest that this is exactly what Chase wants to happen. Read yesterday's WSJ article on TPG. I think the credit card companies are of the mindset that these programs have not been the panacea the predicted and its costing them money.
So, this dynamic pricing doesn't apply to partner awards, I assume?
With premium cabin availability virtually non-existent, it really doesn't matter how they price their awards. The only value in the chart is partner awards.
This is definitely bad news. I had been noticing this even on the international routes, for example searching from US to south east asia / india, a lot of days the prices in economy show 67 K, which isn't right, it should have been 43.5 K. Also i've seen that the saver level business inventory has all but started to disappear. So this is definitely united devaluing the program without even notifying and this is...
This is definitely bad news. I had been noticing this even on the international routes, for example searching from US to south east asia / india, a lot of days the prices in economy show 67 K, which isn't right, it should have been 43.5 K. Also i've seen that the saver level business inventory has all but started to disappear. So this is definitely united devaluing the program without even notifying and this is mileageplus going down big time. If this "officially" happens, i will certainly be switching from united (including dropping my mileageplus club card)
I’d gladly take the 5k as a throwaway segment any day.
As long as Scott Kirby is around, United will continue to stick it to its most loyal/business pax.
The erosion of Milleage Plus continues.
I've been noticing this trend for quite a while. We are essentially UAL hub captives, but since we fly mainly to Europe, they have excellent connections. What's becoming very difficult is to get a flight with a reasonable time limit--so many options run 20-35 hours and involve 2-3 stops. Recent example: desired route-ORD-FRA; UAL routing-ORD-LAX-FRA. The times they are a'changing...
Credit should be given where credit is due. This was first posted yesterday afternoon on DansDeals.
Ultimately it depends how you obtain the miles. If you obtain the majority of your miles flying, then I'd spend 6K miles instead of 51/81USD, because the miles are essentially free. Of course, YMMV.
Honestly, if they go with dynamic award pricing, at least to me, there is no reason to hold a united card anymore, and just keep more convertible UR points.
Ultimately this shift increases the value of MR and UR points, as using them to buy tickets directly rather than transferring and looking for award space is increasingly the better value, especially on domestic flights.
*sad face* I've been noticing dynamic award pricing and also, an extreme drop in available long haul premium award seats, e.g. USA-Australia routes are more or less zero on every date on UA; previously it was always possible to find something and particularly for same-week travel, not any more.
Chase is going to get hurt badly by this. Tens of thousands of card holders ready to shred their United Mileage Plus cards. United unable to sell "worthless" miles to Chase any longer.
Sounds like a plan!
This is bad news. Expect the partner award chart to be destroyed soon.