It’s been 3 years since US Airways made major adjustments to its award chart. During that time they’ve been dubbed ‘the official consolidator for Star Alliance premium cabin fares’ because of the speed at which they’ve been printing miles on the cheap — through major promotions and offers to sell miles at a deep discount (through outright purchase or transfers from one account to another).
In other words, the thinking has been that US Airways has offered up so many miles that they’ve become a way to buy miles and obtain ‘distressed inventory’ (which partners release as awards) across the Star Alliance. Basically they haven’t just been rewarding loyalty with miles, they’ve been selling partner award tickets for cash with miles as the intermediate form of currency.
Given the production of so many Dividend Miles, I’ve been expecting something of a devaluation. More miles chasing relatively the same number of seats tends to mean an increase int he mileage price of those seats. Plus that’s a natural cycle for many airlines every few years anyway and it seems like it’s “time” in the US Airways case.
But I’ve also bet that the merger possibility with American puts off that devaluation. There are two reasons:
- There’s no reason to devalue your program now, if you’re going to shutter the program (more or less) and adopt American’s AAdvantage program. The airline will be called American so certainly the mileage program will be AAdvantage, it is the larger program and the airline is expected to be a member of the oneworld alliance rather than Star. Devaluing now just angers customers, and doesn’t reap benefits in the form of lower costs over a long time horizon if the program is going to go away.
- At the beginning of a merger is precisely the last time that airlines tend to devalue, since they don’t want to anger their customers, they want to reassure them that all is well and getting better — that any differences they see are going to be “changes you’re going to like” as they say.
But US Airways Has Made Some Negative Changes to their Award Chart Anyway
I saw this first over at Wandering Aramean, US Airways has made the following changes to their award pricing.
- They’ve eliminated their ‘off peak’ 60,000 mile business class award (55,000 miles for US Airways credit card holders) from North America including Hawaii to Europe. Now the only off-peak premium cabin awards are to South America and the Caribbean.
- Alaska has been given a separate zone apart from North America, and they’ve increased the mileage price for ‘medium’ and ‘high’ awards (awards you can book on US Airways only when regular space is not available). This one doesn’t much concern me.
- They’ve increase the price of saver first class awards to Hawaii from 70,000 points to 80,000 points.
- They’ve increased the price of business class awards between North America and Hawaii to Europe from 325,000 to 350,000 miles. I would never have considered booking this award, and am unconcerned by the change. The price started off egregious and has become even more so.
- Medium and high business class awards between North American including Hawaiii and the Middle East have gone up substantially. The medium awards went from 180,000 to 225,000 miles and the high awards have gone from 240,000 miles to 350,000 miles.
I’ve never redeemed US Airways awards at the medium or high level, those are awards which can only be claimed on US Airways flights while I usually use their miles to redeem on partners.
And with enough planning one can usually find saver seats on partners in any case.
Fortunately the biggest changes were confined to awards on their own aircraft, and without altering the standard award pricing — except to Hawaii.
But it’s still disappointing to see the end of off-peak business class awards to Europe, which had been one of the most exceptional values in the program. If you were willing to fly during the dead of winter and had a US Airways Mastercard you could fly an all-US Airways itinerary for just 55,000 miles roundtrip in business class. And the US Airways new business class seat is really good, it’s an earlier generation of what Cathay Pacific flies (and what American is getting).
The Only Explanations I Can Think Of
Perhaps they wanted to get some of the ‘bad news’ out of the way early, before a merger.
One imagines that a combined program would start with the American AAdvantage award chart which lacks some of the sweet spots that US Airways offers like 90,000 miles in business class roundtrip to North Asia as well as cheap Australia awards.
They might even make some negative changes now so that they can pitch the positives for Dividend Miles members going forward.
Perhaps this looks too much for black helicopters, but otherwise it’s hard to imagine the logic. I further can’t fathom the urgency in making these changes, for instance that they’re absolutely bleeding on their redemption costs for these specific awards that they need to stop the hemorrhaging now, for even just a short period.