United devaluation: I woke up this morning to an announcement of some really nasty changes to the United MileagePlus award chart. These changes don’t go into effect until February 1, so you will want to issue tickets you may be considering before then (and not make changes to tickets after that).
What United has done is
- Announced an increase in the price of many of its awards
- Bifurcated its award chart so that partner awards will often cost a whole lot more than awards on United’s own flights
There aren’t actually very many changes to awards in North and South America. There aren’t very many changes to awards in coach. The biggest bloodbath is to first class partner award pricing.
Here are .pdfs of the current chart and the new chart.
But to make it easier I’ve put together side-by-side comparisons of the award charts starting or ending travel in North America. I’ve bolded and underlined prices that are changing.
Again, North and South America have the fewest changes.
Europe and Africa is where things start to get bad.
Check out first class changes:
- First class between North America and Europe on partner airlines goes from 135,000 miles roundtrip to 220,000 miles roundtrip. That’s a 63% increase.
- First class between North America and the Middle East on partner airlines goes from 150,000 miles roundtrip to 280,000 miles roundtrip. That’s an 87% increase.
- First class between North America and Africa on partner airlines goes from 150,000 miles roundtrip to 260,000 miles roundtrip. That’s a 73% increase.
I’ve always loved first class awards to Asia, especially on United’s Asian partner airlines.
Check out first class changes:
- First class between North America and Japan on partner airlines goes from 135,000 miles roundtrip to 220,000 miles roundtrip. That’s a 63% increase.
- First class between North America and North Asia on partner airlines goes from 140,000 miles roundtrip to 240,000 miles roundtrip. That’s a 71% increase.
- First class between North America and Central Asia on partner airlines goes from 160,000 miles roundtrip to 280,000 miles roundtrip. That’s a 75% increase.
- First class between North American and South Asia on partner airlines goes from 140,000 miles roundtrip to 260,000 miles roundtrip. That’s an 86% increase.
And finally here are the changes to Oceania and Australia/New Zealand
Check out first class changes:
- First class between North America and Oceania on partner airlines goes from 150,000 miles roundtrip to 220,000 miles roundtrip. That’s a 47% increase.
- First class between North America and Australia/New Zealand on partner airlines goes from 160,000 miles roundtrip to 260,000 miles roundtrip. That’s a 62% increase.
Of course, changes aren’t limited to awards between North and South America. One award I’ve been keen on in the past — intra-Asia business class goes up from 35,000 miles roundtrip to 60,000 miles.
These Changes Compare Unfavorably to the Worst of What Other Airlines Have Done
This is one of the worst guttings of a frequent flyer award chart that I have seen, worse even than what Aeroplan did in 2011 and with negatives on par with what British Airways did two years ago but without the countervailing improvements like discounted short-haul awards (British Airways awards now start at just 4500 points each way).
In fairness, changes to awards on United aren’t nearly as bad as they are to changes to awards on partner airlines. But those partner airlines often have better availability, not to mention a much better inflight product.
And changes to business class awards aren’t nearly as bad (though they are bad!) as changes to first class awards. The crazy thing though is that first class awards can now be even more than triple the price of coach, where once they may have been just double.
If there’s one silver lining, it’s that at some level things could have been even worse (you can always make things worse!). At least they didn’t announce that they’re adding fuel surcharges to award tickets.
An Award Chart Devaluation Was Long Overdue
It’s actually been a long time since United has done anything like this.
- United restricted advance booking of awards on Lufthansa and ANA in the fall of 2004, on the heels of reducing award hold times from 30 days to 14 days to 3 days (now accounts with miles in them are not officially allowed to place awards on hold at no charge).
- They made big changes to their award chart in October 2006 (and introduced close-in booking fees).
- They made big changes again effective January 2009, including the introduction of cash co-pays for upgrades six months later.
There was what seemed like a pattern of devaluing every couple of years. So it was no surprise when they tweake the chart in 2011. At the time though they were more focused on merging with Continental, on aligning their policies with Continental (read: becoming Continental and adopting Continental’s award chart) that the changes were really quite modest.
And it’s easy to forget that the Continental merger brought with it an end to ‘blocking’ of partner award seats. United used to program their computers to pretend that their partners were not offering them award seats, when the partners actually were, because the MileagePlus didn’t want to pay for those seats. Telephone agents would tell customers the seats weren’t being offered to United, which was false.
When Continental joined Star Alliance they promised an award chart that was more ‘realistic’ so that they could afford not to engage in this deceptive practice, and they ended what they internally referred to as ‘throttling’ when they took over leadership of United,
But Continental executives were surprised by how much partner awards were costing them, and in some ways I’m surprised by how long it’s taken them to do something about it. Presumably they figure that the drama and reputational hit they took when actually combining the airlines in March 2012 (creating a very bad airline in the process) has mostly passed, they didn’t take too much of a hit this past summer with the introduction of minimum revenue requirements for elite status and increased change fees on award tickets. Very frequent flyer Un-friendly.
Here’s How Others May Follow United’s Devaluation
The worst thing about this, from a flyer’s perspective, is that with the consolidation in the airline industry there are fewer players and less of a barrier to changes like this across the board. Delta miles are already worth very little. Even with these changes I’d take United miles over Skypesos. And Delta has just increased the price of international business class awards (not that they wouldn’t go even further, and without advance notice, since they consider award charts ‘to be like pricing making it illegal to tell customers about changes in advance; presumably they believe United’s advance notice here is illegal even if the government and indeed the rest of the world disagrees).
It’s been nearly four years in US Airways devalued its chart. American’s chart used to be the most expensive and they haven’t devalued in quite awhile. If a merger between those two airlines goes through my bet has been a period of quiet, no need to push customers away, they’ll “take the best of both carriers’ programs.” But given a little bit of time there’s not much reason to expect them not to follow suit. (Randy Petersen has suggested the opposite, that a merged carrier could do a ‘big bang’ change upon combination; pulling off the band-aid in one go, and a change like United has announced I think makes that more plausible since whatever they do could be spun as not being worse than that).
Here’s What to Do Right Now, and In the Future
I’m issuing a sell recommendation on United miles.
Or, more specifically, burn those that you have already banked now, or at least ticket by the end of January. Earn more for future use with a rational understanding that they will be worth less, so the effort you go to in order to accumulate the miles should be less, and when considering which miles to earn it should take earning more United miles than a competitor currency like American points to get you to choose United.
Finally, remember that miles are not a good store of value. They are a propriety currency with no independent central bank, let alone currency board, no mandate to minimize award price inflation. You should always earn and burn in roughly the same period. Miles are worth more today than they will be tomorrow. Your best hedge, and it’s not true protection since these programs can change too, is to save up currencies that can be transferred effectively to a variety of different frequent flyer programs (Chase Ultimate Rewards, American Express Membership Rewards, Starwood Preferred Guest).
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I think we need to start a Twitter campaign. Include United and chase in every tweet with the hashtag #unitedunfriendly. Spread it everywhere and overwhelm their Twitter accounts
“They are a propriety currency with no central bank….”
Exactly the opposite, Gary. The power to inflate Miles/points is perfectly centralized.
This is a pretty horrendous devaluation at any rate, but not inconsistent with the direction the new UA has been heading in. Screw your FF’s and juice the benefits for those inelastic full-fare customers…
I am not pleased with these changes, but some people trying to pass this off as UA becoming the most expensive just isnt true. Unfortunately, this just seems to be the way the industry is going.
Facebook. Twitter united to not punish us. Let our voice be headed. But I also blame couple of you bloggers for constantly posting about how long it has been since united last devalued.
Gary, should we consider this is also a devaluation of Chase UR somehow? In addition, I think Chase Sapphire Preferred customers should start to file complain to Chase of this partner devaluation.
People need to protest. And in a big way.
#unitedunfriendly
#unitedHATESFrqntFliers
Let it be done in a big way. Bag tags, Tshirts, letters to be handed out to staff in airports, crew, pilots, calls to management….
Bloggers unite!
@Alan – United was the most valuable partner of Chase Ultimate Rewards. Those points remain really flexible. Hyatt transfers gain in relative value. For first class awards, Korean Air redemptions start to look really good. I’d still say given the alternatives over at American Express Membership Rewards, Chase points are still ‘better’ (United has no fuel surcharges, while Aeroplan charges for half its partners and ANA and Singapore for all where fuel surcharges apply to paid tickets… basically almost all Amex partners that’ll have award space will hit you with fuel surcharges). But I like Starwood points a little more today for transfers to American… until American devalues its own chart!
@jim do you really think I reminded United that’s been awhile? They’re doing this because of their internal financial statements, not because they slapped their forehead like in a V-8 commercial after reading a blog 🙂
Funny how they didn’t mention this a few weeks ago before they hosted part of DO.
@Joelfreak – United is not the most expensive, I produce the award charts here…. But it is still a very big deal.
I guess I should dust off my trusty old SPG Amex card
@Chas – the idea of the central bank is that it’s supposed to be ‘independent’, I will add the word ‘independent’ to clarify. However I think I make the point clearly already by saying ‘no currency board’ as well.
Am I crazy to think that this totally screws people with status on United? More people cashing in miles to fly premium cabins on United metal means less space up front for last minute upgrades. Am I missing something?
It’s a decoy, Gary. Designed to distract us from the far bigger, FAR WORSE news.
Starting today, UA is no longer offering full meal service on all flights 760 miles or longer. For many leisure routes, that minimum has gone up to 900 miles.
http://www.flyertalk.com/forum/21702287-post1647.html
Those passengers unfortunate enough to be flying on the morning IAH-CUN flight will now forego breakfast and be stuck with “warm scones.”
🙂
Definitely devalues UR points also, but not as drastically.
That’s the end of the game as we know it. So far I was able to swallow all the increases and adjust by earning more miles (credit cards, shopping portals etc). This goes beyond what I can offset with my bigger earnings. I can’t see any realistic 1st class goals to aspire to and that was my biggest motivation with the biggest payoff. A really sad day…
Some of the changes for partner awards are almost laughable. So much for transferring my bank of UR points to united. Ultimate rewards takes a large hit on this unfortunately in my mind.
People grumble and complain but don’t really make any change. And what change can we make thanks to consolidation. Another change you will like. It may be time to cancel those Chase united cards.
Not good news for those who make their living booking trips for people with miles. That profession is quickly dying.
@EJ awards are still capacity controlled
I believe your Hawaii numbers are off. They raised all the prices. Coach, Business and First across all categories (at least on standard pricing). They also raised the interisland prices. You used to be able to find interisland for 5K each way…lowest is now 6K.
@Gary,
What is your speculation as to whether this comes with any concomitant increase in United award availability?
Well, one person who doesn’t necessarily lose out is the business traveler who uses miles for upgrades… In fact, it makes those 15-20k upgrades to business class even more valuable compared to book them right away!
Absolutely disgusting!
jeff.smisek@united.com needs to hear from everyone
twitter/united
Two tier award charts? What’s the purpose of being in an alliance, then??
While for those who use their miles primarily for international front-cabin travel this is indeed bad news, for those of us who only use miles for intra-U.S. mainland domestic flights, the good news is that the cost stayed the same which means that it’s likely that it will be several more years before the 25K domestic r/t saver awards will be devalued.
@David – there are upgrade changes too, just too much to do in one post alone!
@jfhscott – ain’t gonna happen.
@David – there are upgrade changes too, just too much to do in one post alone!
@jfhscott – ain’t gonna happen.
Here’s what a top United Exec has to say about the changes: http://t.co/p0KGSBxB0e
My thoughts? Buy when there is blood in the street. Existing UA flyers should double down and new flyers looking to get the most should consider UA. All other programs will devalue too, and UA now has the longest-running clock because it reset today. Painful, yes, but the industry is going to equalize to stay competitive so what UA has just offered is probably in a couple years going to appear attractive compared to DL and New American.
Everyone focuses in on devaluation when I argue it is actually inflation. Our earning power has increased dramatically over the years. There are more credit cards with higher sign on bonuses and spend bonuses then years ago. 50k, 70k sign on bonus, get this card + that card (chase has many cards that can earn UA miles), 2x for dining or travel, etc. Most people would laugh at a 25k sign up bonus for a UA card today when that used to be the standard. When the earning ability goes up, then the cost of the rewards go up. That is inflation.
Andrew, yes it is absolutely inflation, just a particularly ugly form where the purchasing power isn’t allowed to float with market supply/demand but is instead fixed by a single entity. I do believe we see this regularly in totalitarian states.
They also snuck in a 40% increase in awards to Alaska in the footnotes of the chart…
http://milecards.com/7599/a-comparison-of-uniteds-new-and-old-award-charts/
So what happens if I fly UA to Frankfurt and then take a Lufthansa flight to say Milan, is it immediately a partner redemption?
Gary,
You really would rather have United miles over Skypesos? Really? Business class award availability to Europe on Skypesos is not very hard to find for Alitalia and a heck a lot less miles needs. I know the one way searching is a pain, but you can put together Delta itineraries and no fuel surcharges.
You are much more the expert on miles, but please explain to me exactly how you view united miles better than Delta other than ease of booking and getting first class (which took a HUGE partner hit)…..
Well, I can’t say I’m too surprised by this. Undoubtedly, the explosion in “points blogs” has greatly expanded the number of people “gaming” frequent flyer programs to achieve these aspirational premium cabin partner awards. I mean, it has become pretty preposterous how easy it is to get a $10,000 int’l award ticket FOR NO MONEY. And UA has to pay these airlines for these seats (I’m still curious how much it costs them).
At the same time, it’s become more difficult to fly the USA airlines using miles. They just don’t have good award availability — and even if they did, who in their right mind would prefer to fly UA overseas if they could fly a partner airline with better service? So this pushes up the demand for partner seats, and pushes up UA’s costs.
I’m guessing that US will now have to do the same because the demand for premium cabin Star partner awards using Dividend Miles will become insane once UA’s changes go into effect.
@THEsocalledfan – ease of booking, more partners with much much better availability, many of those partners have better inflight products, more generous routing rules, yes I would still rather have United miles than Skypesos!
@Nick – yes any partners on an award would seem to put you into the partner chart (though remember of course you can book two separate one-ways, one on United and one with partners, and average the price)
@Nick
I was going to ask the same question. It seems all my international travel includes more than one airline.
@Andrew – I tend to agree, especially in a world where most miles are not earned by flying, but through credit card purchases, dining, mileage malls, etc., etc. Simply, the basket of goods which would score me 20,000 miles on a MP credit card 10 years ago now gets me 25,000. And, yes, supersized sign up bonuses may drive this even more.
What is interesting is that they have finally decoupled, especially at the premium level, their product from their partners. I infer either (1) they are wanting to direct traffic to their own product, or (2) this reflects some premium MP must pay for partner awards. In either case, it strikes me as a bit of an acknowledgement that their premium products are generally inferior to their partners’.
United saver awards cost MileagePlus a whole lot less than partner awards do. Also another indication of the alliance crackup. But it is true the product is really inferior to that of many of their partners.
How come these airlines never go the other way and try and make their currency a valued one. They could have decreased the flow and thus demand and value increase. In theory then it increases leverage on your frequent flier program. Now they are just going to alienate a bunch more of their frequent fliers who are already on the fence with how bad United has been the last 2 years anyway.
Dismantle Star Alliance!
Gary, how would this work if you’re flying one leg on United and another on partner airline? For example, EWR to FRA on United, then FRA to FCO on Lufthansa? Now, F saver award is 67,500 miles.
Sudden interesting though… I wonder if we can use this trick to avoid the partner high rates…
if we say fly on an itinerary mostly in United business/first, with only a short segment on another carrier… would we would be charged the United award rate or Partner award rate if we purposely book downgrade ourselves to economy on the partner segment?!?!
For example, IAD-FRA-VIE…. with IAD-FRA on United Business/First, and FRA-VIE on Lufthansa — but we purposely a downgraded to economy on LH segments. would we then get charged the United or Partner award rate? should be United right???
If we book a ticket before the change, then rebook it once the change takes place, do we have to pay the higher mileage level? Or are we grandfathered in?
After calming down and reviewing it in more detail the whole outrage is over partner FC. I do love LH FC and it looks like it may be too expensive in the future for 2 tix, but if by myself who knows. The BC increases were modest but FC was incredible. This is actually one notch below US Airways saying it will not even book a LH fC award. UA didn’t ‘t go that far but they came close, plus added in all other partner FC. I may have to go BC now which is not the worst thing in the world.
I guess the one last question I have is if I book an award out in Dec 2014, is there any way to move this after Feb. 1st without having United reprice the award ticket…
I was planning on using 240K miles for a pair of tickets to Africa in 2015…but come up a couple months short :/
Earlier this year I impulsively burnt my United miles for a First Class ticket to Bangkok in Dec. I sort of have been kicking myself because it happened shortly after another international trip and will be stress on my funds and time. Now I’m glad I did. It will probably be the only time in my life I’ll ever get to experience First Class
Should we start calling them UnitedPesos?