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.
@ Gary — As DJT would say, “we’ll see”.
I think the outsized value of the program (in addition to partner awards as you mention) is shifting away from the lucky few who snag saver awards to highly desirable locations towards those who will fill marginal seats on less crowded flights/times.
I’ve been finding very cheap economy awards to mid-small market airports in the shoulder seasons, which is how I like to travel anyways. I don’t feel too bad that some travel bloggers have to pay more to get to Bali or Johannesburg.
If they are going to devalue miles to 1.0 cents each, they need to be selling them to Chase at a discount as well. No reason for any intelligent consumer to earn or transfer UA points from Chase when anyone can get 2% cash back on other cards.
Going to dust my Discover card off soon for higher cash backs if this trend continues.
“United eliminated award charts in April for travel on their own flights starting November 15”, which was the final nail in the coffin for me…even before the refactoring of the 2020 program. I do 125K year domestically, and I used to split that between UA and SWA, but I’ve zeroed out my UA account and now ALL of the flying goes to SWA. I value simplicity and program value over all else. I bought 6 Biz tickets on a variety of European and Asian carriers in the last 12 months because the service and product are consistently great. What a race to the bottom with the big3.
Unquestionably, many United fliers who accumulated a lot of miles are getting “stiffed” because of the new “reward pricing” rules.
I used to get international business saver awards for around 60,000 each way. However, because of the new “reward pricing” (as United calls it), those same flights are 180,000 and more, each direction!
I was a fool to accumulate too many miles – I have too many United miles that are now worth markedly less than they were just before the decision concerning award pricing. I did not see this United Airlines anti-customer tactic coming.
Chase Bank already has an unrelated dispute with United. Chase Bank will have yet another beef with United because Chase Bank paid millions of dollars for miles that are worth markedly less than their purchase price.
Fliers were previously shorted after miles earned was no longer based on distance flown. Even those fewer miles awarded have again been devalued.
Chase Bank bought those miles from United to encourage customers to obtain Chase Bank credit cards for continued use.
Chase Bank gave customers huge sign-up bonuses of United miles that are now worth a fraction of what they were worth when Chase Bank bought the miles from United.
What incentive has a United/Chase Bank credit cardholder have to use the Chase Bank credit card for everyday spending while the miles have lost so much value!
What incentive does a potential Chase Bank customer have to even want the sign-up bonus since it is worth so little now?
Chase Bank has every right to demand a refund in connection with the miles they bought from United that are worth far less than what was paid to United for the miles.
Chase Bank should factor in a statistical formula to get a refund from United for customers who will not be using the Chase Bank cards because of the devaluation of the United miles. Quite simply, the incentive for getting a United/Chase card is markedly diminished solely because of the change United installed.
The devaluation of the miles was a poor management decision that should not be borne by Chase Bank nor by passengers.
United owes Chase Bank a major refund for those miles that were devalued by the very company that sold the miles to Chase Bank.
Although United can change the terms of its frequent-flier program at will, I don’t think United has the right to stick it to Chase Bank on the devaluation of the miles Chase paid United for those miles.
Clearly, Chase Bank will lose credit card customers because of United’s decision.
I will not be using my United Chase Bank anymore for everyday purchases. What is the point in accumulating depreciated miles that change to less value simply at the whim of United management?
United is making another move to destroy value for customers? Another Scott Kirby gem. Maybe the guy should converse with real live customers to see about their wants and needs before making moves like this, then lying about the reason.
Its funny cause after Dr Dao United was probably the most hated airline in the industry. They refocused and came out stronger and then AA took the throne of most hated. So United responds by first destroying their miles and then decides that people spending $12,000 a year with them aren’t really that good of a customer after all. And the hate for United is back in full force! Anytime I talk with anyone who cares about flying at all they simply say they won’t focus on flying United or spending on their chase card any more.
@Benji – I couldn’t agree more. Last week, I would have bought my Lufthansa tickets via the United website. Yesterday, I bought 3 RT Biz tickets for my family directly through Lufthansa. Funny how quickly behavior changes.
@FF78 If you want United to really feel it (United get’s half of that LH ticket as they revenue share with LH across the Atlantic) you would fly BA and likely already be BA Bronze or whatever airline is least expensive in Business. Or if it has to be in Star credit to another Star Alliance program. As a 1K I intend to next year redeem all my miles and use UA as little as possible. Between the US and Europe there are so many choices.
But you have the right idea FF78
Here’s my idea: A class action lawsuit for breach of trust. They have devalued millions of customers and billions of points that were acquired in good faith that they would retain the value promised when they were accumulated.
What do you think, Chase? United screwed you out of millions… You lead the way and I will ride that wave, and so will millions of others who have been screwed by the big three.
What program is the best place to credit star alliance miles now? Normally I would put them in united but now I am hesitant to do so. I redeem for partners only though not united metal.
@Bill – I like the Asiana award chart a lot, and the ANA chart, ANA miles are easier to come by via Amex transfers (Asiana has a BofA credit card). Bear in mind there are fuel surcharges to go with low award prices.
@EndlosLuft. Excellent point and I agree. Ironically, I was also an AA Execplat for 15 years, and dumped them for United 7 years ago, so BA is out (I’d never pay for their business product to begin with). I have a friend in Germany and he’s counseled me to credit to Asiana because of the lower qualification and lounge access thresholds.
October 16, 2019, at 5:27 pm
Here’s my idea: A class-action lawsuit for breach of trust. They have devalued millions of customers and billions of points that were acquired in good faith that they would retain the value promised when they were accumulated.
What do you think, Chase? United screwed you out of millions… You lead the way and I will ride that wave, and so will millions of others who have been screwed by the big three.”
Great idea in theory. However, we fliers cannot sue in this case because United can change its frequent-flier program at any time it chooses. We have no recourse except to stop using the United/Chase Bank credit card and not using United Airlines in the future.
In the case of Chase Bank, they can sue United for buying millions of miles that United intentionally devalued after being paid by Chase Bank and for lost revenue from customers not using the United Chase Bank credit cards that got huge sign-up bonuses that will not be used.
Even if Chase is successful in getting the money refunded, it does not help us fliers who got shafted by the devaluation of the miles.
We fliers do not have a dog in the fight. Read the TOS about the right of United Airlines to change the terms of its MileagePlus program at any whim.
Screwed over by United
as long as folks keep flying they are the ones bending over
If folks still stay loyal if I was United I would double all the awards until their pockets were empty
The anger In the comments here is palpable and I share it. I’m not playing United‘s devaluation game anymore. Devalued both on earning and awards. It is a blatant con scheme with doublespeak, similar to DJT. Cheat ‘em but say it’s the greatest, and repeat. Chase should definitely object because United effectively devalued the millions of miles they bought and awarded in sign ups. Cashback is the way to go now. MileagePlus miles are a suckers game.
United has gotten so much worse since Scott Kirby arrived. Get rid of him.
Seems most everyone has a choice. Would be nice. I live on Guam. We have NO choice. United is the only carrier to get to the Mainland, USA out of Guam. We travel to California 2 times a year at a price of economy approx. 1700.00 RT or 3800.00 business. Those prices are if we are lucky. Nothing better then being in the back of the bus on a crappy plane for approx. 20 hours or more. Mileage tickets are just too high. I tend to use my miles between smaller destinations like PSP to SFO where you can get 10m one way tickets.