I’m pleasantly ensconced in the Diplomatic Suite at the Intercontinental Bangkok, but this news is important enough to say some things about before I head out to dinner.
United has announced changes to its frequent flyer program, which are pretty much all bad.
They begin by announcing new “Domestic Short Haul Saver Awards” — these are short flights that require 15,000 miles in coach instead of 25,000 miles. United has actually been offering these for some time now, and the announcement is that the benefit is being reduced not introduced.
Previously the reduced mileage was applicable to flights of 750 miles or less. Now it applies only to flights of 700 miles or less. What difference does 50 miles make? Just ask New Yorkers. LaGuardia-Chicago is 733 miles. Newark-Chicago is 719 miles. Since the awards only apply to flights on United and not partners, New Yorkers can only use this award to fly to Washington-Dulles.. And nowhere else.
The other ‘improvement’ is saver awards available on every flight to every destination. But this promise doesn’t say how many awards or in what class of service. United has historically been reasonably good about award availability to begin with, so there’s not clearly and new benefit here whatsoever.
Now that United has packaged together two meaningless improvements in a press release, you naturally have to get ready for the other shoe to drop.
The lighter punch: new award booking fees start October 16: $75 for travel ticketed six days or less prior to departure and $50 for travel ticketed 7-13 days prior to departure. 1K and Global Services members are exempted from the fee.
It remains to be seen whether this can be circumvented when booking travel on all United metal. As long as routings remain the same, date changes are free on all-United awards. So in theory you could book travel a month out and then change the dates to just a few days in advance provided there’s the award availability you need. This strategy has worked with American for a long time. Which brings up another basic question here: some carriers have had award ‘expedite’ fees as a legacy of paper ticketing days and even a time when award ‘certificates’ really did have to get generated. Those fees just didn’t go away (because they generated revenue) once awards went all-electronic. But to introduce such fees now is absurd. Sure, airlines want to discourage the use of awards for last minute travel which is usually otherwise more expensive. But this is just chinsy, a junk fee to say the least.
It irks me, but I can live with it. What’s much worse is the devaluation of miles that United has announced.
“Miles required to redeem for certain awards to change”
United’s new award chart is here.
- Domestic first class awards go from 40,000 to 45,000 miles.
- Domestic first class to Hawaii goes from 60,000 to 75,000.
- First class from North America to Europe goes from 100,000 to 125,000… 5,000 miles more than first class from North America to Asia (which thankfully stays the same)!
- Australia takes a huge hit: coach goes from 60,000 to 80,000… Business from 90,000 to 110,000… First from 120,000 to 140,000.
But even worse is what United is doing to their ‘standard’ awards, which offer last seat availability on any flight for additional miles.
- Domestic coach goes from 40,000 to 50,000 miles and domestic first class goes from 80,000 to 90,000.
- North America to Hawaii in first class goes from 120,000 to 150,000.
- Again, Australia takes a hit: coach from 100,000 to 150,000… Business from 150,000 to 220,000… First from 200,000 to 270,000. Wow.
My best guess is that award space on United is going to get very tight for awhile, with members burning through miles and making bookings before the new chart goes into effect in October (those bookings can stretch out through September, 2007). Then awards will become a bit more available, as members will have exhausted some miles and remaining miles won’t nab as many awards.
I predicted this exactly two months ago (and the implications of my writing on mileage inflation has suggested this would happen for far longer). But it’s still a big blow.
United Mileage Plus miles are no longer a clearly superior currency. They’re still preferable to Continental and Northwest miles, for sure, though not nearly as much as they used to be. But the award chart no longer offers substantially better value than American’s.
Complaining to United will likely do little good, they surely expect some blowback. Other carriers have changed their award charts over the past few years but United — while in bankruptcy — seemingly held back. They lured travelers to their planes with generous mileage bonuses. Offers of 30,000 miles might have convinced people to fly, thinking “hey, that’s a third of a business class ticket to Autralia!” Then United turns around and says “we’ve given you so many miles of course mileage prices go up.”
Instead, it might not be a bad idea to start mailing those United Visa cards back to Chase Bank. They’re the biggest buyer of Mileage Plus miles, and the United Visa is their strongest credit card product. If they started losing customers because of their partner’s changes they might exert some influence over United’s frequent flyer program.
Increasing the price of an award by 70,000 miles in a single swoop is unconscionable. Increasing the price of an award (as in the case of intra-Hawaii awards) by 100% in a single swoop is unconscionable. United should hear from its members about this.
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