Lufthansa first class appears to have gone from 121,000 to 154,000 miles each way per person – meaning that a saver award now costs 308,000 miles roundtrip. That’s a 27% increase. And these are tough awards to book, because Lufthansa only makes them available to United’s program members within a few days of departure.
Meanwhile ANA first class from the Midwest and East Coast appears to have jumped to an eye-popping 242,000 miles – an instantaneous doubling in price.
It’s possible that this is an error, and that United will resolve it. Since they no longer tell members what prices should be, they don’t tell members when award prices are changing, either. These new prices clearly make the program inferior to several competitors for booking the best and most aspirational awards.
United no longer has a first class cabin of its own, and neither do most of its partners. But the ability to access first class on Lufthansa and ANA was special, though probably not at this pricing. (Swiss still has first class, but generally doesn’t make it available for long haul redemption to United’s members.)
ANA First Class The Suite
United Airlines last devalued its miles 11 months ago, so maybe they figured that they were due? When the MileagePlus program eliminated award charts they eliminated any up-front promise of value. Every time an airline has done this, they’ve increased the prices they charge for awards. Every. Time. They can do it in stealthier fashion. They don’t need to tell members they’ve done it. The temptation is just too great.
Still, with devaluations at other programs United’s miles have remained competitive – although clearly not at first class redemption prices they are now showing.
United doesn’t make a lot of saver award space available on their own flights, but they’re part of Star Alliance which means they have more quality partners than competitors like American and Delta. That’s meant more ways to get where you want to go at reasonable mileage costs, even though they kept drip dripping partner award price increases during the pandemic.
Several key takeaways: we already knew not to trust United or MileagePlus. They were among the worst during the pandemic (refusing refunds for cancelled flights, increasing mileage costs when no one was looking). These increases without notice make their miles worth less.
- Spending on United’s credit cards is now worth less.
- Transfers from Chase (and Bilt) to United are worth less. That marginally reduces the value of those transferable currencies.
- And it’s probably counterproductive for United in any case, since around 2018 the revenue growth MileagePlus was seeing was accounted for in transfers from Chase. They got Chase to pay more for their miles in a deal extension in 2020. But they’re not playing a game that’ll get customers to drive increased revenue by spending more.
Lufthansa First Class Terminal
When United has raised the price of awards in the past they’ve taken a hit on credit card charge volume, and that’s bad for their bottom line. Perhaps they are hoping this time will be different. They’ve gotten away with it recently, surpassing charge volume on American Airlines co-brands (as that airline implied on its recent Investor Day). Perhaps they figure that customers won’t notice, or that they don’t want customers who are driven by first class partner redemptions.
(HT: ChazzaBazza)
Booking thru another cheaper program makes it more difficult for any UA connection needed since they are blocking a lot of that space for partners. Either pay the high price or do 2 ITNs. If the 2 ITNs price close to UA’s price, then UA will get the higher price.
If you consider that miles or points are one per penny, you can take these awards and convert them to dollar costs by moving the decimal point one to the right and get rid of the k. 60.5k becomes 605 dollars. 110k becomes 1,100 dollars. 242k becomes 2,420 dollars. These are somewhat reasonable prices for a one way ticket with double the numbers for a round trip. If you are earning points or miles at two per dollar spent buying stuff, you only have to spend half as much for the award. Awards have changed to a lot worse since I could exchange 40,000 miles on WorldPerks for a round trip coach ticket from LAX to BKK. Now it is hard to find a reasonable domestic round trip coach for that price in miles or points. With accounts being drained and with awards costing more, it is probably better to pay cash and points for tickets even at a disadvantageous rate and keep balances down.
Supply and demand. Too many in the points/miles game (led on by the bloggers) whine about “devaluations”. However, as @jns posted if you look at the price of the ticket if you paid cash you are still getting incredible value. Yes it isn’t as “cheap” as it used to be but nothing is. In a world of rising airline prices and more demand for travel there is absolutely no reason ANY airline (or hotel group) should price award travel at a discount. Price it in line with ticket costs which both aligns the true cost and also, as a byproduct, burns miles which helps on the balance sheet future liability.
I know it won’t be popular but good for them. They are running their business in a responsible way and all companies should price their product at whatever the market will bear.
When there aren’t any seats, who cares what the price per seat is?
A long time ago, I was able to book two 65k first class seats on LH from LAX to MUC one day before travel. Plus 5 hours in the First Class Terminal and a ride to my connecting flight. That was memorable. The price increase appeared just a few months later.
Whenever I think that the miles price is too high, a few years later that price seems attractive. So when in doubt, book the better travel experience. Exception: If your family is going to get addicted to expensive travel to the extent of refusing to travel in coach, think carefully.
You final comment hits the nail on the head. The vast majority of people who use co-branded airline cards are not sophisticated points and miles enthusiasts. They’re the folks using their miles to pay for a family to go on summer vacation in domestic economy.
That’s some B.S. by United Airlines. Keep taking the value out of the frequent flyer program and it will be worth-less.
Not good news but…….Everyone gets so up in arms when prices go up and then compare the rate to that of years ago. They call it devaluation and everyone gets pissed off. Well, the earnings have increased too. You used to get 25,000 miles for a UA card and now it is 100,000. This is not devaluation but inflation since the earn and burn rates are both impacted.
Also, how many are beefing up their UA and Hyatt miles by transferring points from 3 high ink card UR bonuses? How many of them have “real” businesses and file a business tax return? The earning potential has skyrocketed over the last decade plus. Redemption costs will naturally go higher too.
From AC (above) “In a world of rising airline prices and more demand for travel there is absolutely no reason ANY airline (or hotel group) should price award travel at a discount. Price it in line with ticket costs which both aligns the true cost and also, as a byproduct, burns miles which helps on the balance sheet future liability.”
The above destroys the original purpose of earning miles for travel.
When frequent flier programs started, they were to benefit frequent fliers and to maintain loyalty to a particular airline. Fliers got a flight for relatively few miles. Most of that benefit is now gone because of the high number of miles required for travel.
It was a great idea when it started and it lasted until several years ago. Now, it is merely a competitive process of paying miles or money which become travel without any or much savings when using miles.
What is the purpose of loyalty? It seems the airlines forgot about that original element by markedly devaluing miles for free trips.
Are they thinking they are DL now? Every time I think US airlines are charging too many miles I have only to look at a relatively captive market program like Qantas
Still, I’d bet charge volume drops.
The only time I use UA miles is for the excursionist perk
We have almost reached the point where there is no real value in any United redemptions left, which is already the case for Delta. I’m glad that I used up my United miles, and I’ll be happy when the Delta miles are gone, too–if I can ever find a good way to use them. I haven’t bothered to earn any significant United or Delta miles for years; there’s just no reason to.
As for those who think that this is just a “good business decision” by United, I can’t decide whether they are cattle or sheep.
I hit up Chase up for a decent retention bonus, on my United card. Their isn’t enough reason for them not to devalue.