For several months I’ve been saying that United is ‘due’ for a devaluation. We now know a little bit more about how and when they’re going to do it.
It shouldn’t come as a surprise that United plans to upend their award pricing, even though their awards are expensive compared to many programs around the world.
- The last major change to United’s award chart was announced November 2013 although United effectively devalued last year through routing rules that cause many awards to cost more.
- United hired Scott Kirby as its President, the man most responsible for driving down the value of the AAdvantage program. And United now reports up to long-time Kirby lieutenant Andrew Nocella.
- The airline has been talking about — and delaying — dynamically pricing awards for two years.
- Delta has devalued several times since United, so while American Airlines more or less tried to be a little bit less expensive than competitors when it devalued last yeer United has headroom against Delta to raise prices.
Several changes are going into effect November 1. So we have some advance notice and I appreciate that.
There’s a new award chart, it’s published, and the changes to saver awards aren’t draconian.
There will be some price increases, and some modest decreases, and a new way for United to avoid offering outsized value when members redeem seats that the airline could have sold for cash.
Dynamic Award Pricing Will Replace Standard (Extra Miles) Awards
One of the best values United offers is one I never use. Their domestic extra miles awards are better than anyone else’s. The most that United charges for a one way economy domestic award is 25,000 miles. And if you have elite status or their co-brand credit card that price is available for the very last seat for sale on the plane.
United is the last airline with only two award pricing tiers, saver and standard. American, Delta, and even Alaska have multiple award pricing tiers and can charge twice as much as United for that last seat.
You always want a saver award, to spend the fewer miles possible, but in a pinch the fixed value price has meant that United could still provide real value. They’ve already increased the prices substantially of premium cabin awards, especially premium cabin international awards, at the standard level of course.
We’re going to see standard awards replaced with ‘Everyday Awards’ and those will be priced dynamically. There’s a published maximum price so they still have an award chart in some sense. A domestic one way economy may be up to 32,500 miles, a 30% increase… but it might not be.
Reasonably priced ‘standard’ or ‘rule-buster’ awards are one of my favorite things about frequent flyer miles. Knowing that in a pinch you could get on any flight any day with your points at a reasonable price is liberating, and it’s fantastic insurance. I’ve booked last seat availability awards on United when British Airways has gone on strike — just in case I needed it (I didn’t).
I don’t actually travel on these awards, but knowing they’re there means I’ve always got a worst case scenario. However the value proposition for these awards, which sell seats the airline might otherwise sell for cash, has been on their way out for years. At American they ended in their usefulness for all intents and purposes April 8, 2014. At Delta it was earlier than that. I’m sad to see what’s left of low fixed pricing go, even if it won’t change the way I usually use my miles.
More Expensive Saver Award Chart
Most changes to the saver award chart are marginal, with higher prices for United premium cabin cross country and Hawaii awards and lower prices for things you probably don’t care about like economy intra-Europe redemptions.
- United’s premium cabin cross country redemptions on Newark – Los Angeles and San Francisco and Boston – San Francisco goes from 25,000 to 35,000 miles one way while Hawaii goes from 40,000 to 50,000 miles.
- United created two-tiered pricing in 2014 for United flights versus partner flights. For instance United business class to Europe is 57,500 miles while partner airlines are 70,000. The United price will go up to 60,000 miles. Most people won’t feel this, but it’s also strange when paid prices of premium cabin travel have generally fallen somewhat (there are more discounts than ever before and saver awards are the ultimate discount seats).
- United business class to South Asia similarly bumps up from 70,000 to 75,000 miles and United business class to Australia and new Zealand goes from 70,000 to 80,000 miles each way.
New No Show Fee
There will be a no show fee of $125 that applies even to elites who want to redeposit miles after failing to show up for an award flight and not cancelling in advance.
That’s fair, it seems to me, though I’m never a fan of more fees. Don’t no show!