During United’s third quarter earnings call a financial analyst asked for guidance on the “impact of dynamic pricing of awards, utilization or yield?”
- More award redemption would mean more recognition of revenue off the balance sheet from previously awarded miles
- However when the airline fills a seat with miles, that may mean the average revenue per customer (including award passengers) goes down – the airline doesn’t ‘pay itself’ as much for a seat as the average customer might.
United eliminated award charts in April for travel on their own flights starting November 15. They refused to share guidance on how this is affecting yields. Earlier in the call they offered that some awards are less expensive, some are more expensive.
What they shared in response to the question is that they’re “able to move the redemption awards around in a way that allows us to price lower and price higher which we think will be a net benefit to the airline.”
Moreover they also offered that this isn’t really about making more inventory available to customers at a reasonable price as they’ve previously claimed, as borne out by the fact they share that program members are “continuing to redeem miles at the same pace” as before United introduced dynamic award pricing.
Fortunately partner awards are still pricing based on their former (hidden) award chart. That’s where you’ll still find value from MileagePlus.