Wow: United MileagePlus Devalues Partner Award Travel

Yesterday United Airlines removed partner award charts from its website. The only reason a loyalty program removes award charts is so that they can raise the price of awards while trying to hide what they’re doing. I have never seen a program eliminate award charts and become more valuable.

We now know exactly why United pulled these charts yesterday without any notice to members. As One Mile at a Time reports today United is already charging more miles for many partner awards. He notes partner award prices “haven’t gone up across the board, but ha[ve] in most regions.” E.g.,

  • Lufhansa transatlantic business class increased 10% from 70,000 to 77,000 miles each way
  • Asiana business class increased 10% from 80,000 miles to 88,000 miles each way
  • US-South Asia increased 10% from 90,000 miles to 99,000 miles each way

From United’s perspective there are likely three reasons this makes sense to do right now.

  1. They waited until Chase renewed their co-brand credit card deal. Chase is the biggest buyer of United miles, and agreed to pay more for those miles, before United made the miles worth less.

  2. They did it during a global pandemic while they figure no one is watching

  3. They focused on partner award tickets, which involve paying another airline – from their perspective this conserves cash, much like refusing to give refunds to customers when they cancelled flights did.

It does no good to point out the obvious,

  • That United will need its frequent flyers more than ever to fill seats as they try to recover from a collapse in air travel demand

  • That this will mean spending more on marketing, a departure from the past five years of devaluations (United might counter internally that they are interested in awarding more ‘new miles’ and not maintaining the value of miles earned from past business)

  • Devaluing miles will make it harder to generate credit card revenue, which is core to their business

The reason it does no good is because, as I wrote on March 11, United is only focused on short-term survival. You’ve been Kirby’ed!

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. You got it…they were PLANNING on doing it, no reason not to do it while no one is looking. Unfortunately this is the way the ENTIRE industry is going. Hopefully with the administration change we will see some sense brought into regulation in miles, as its needed.

  2. Is United paving the way to another bankruptcy filing?

    Is this is a new management strategy? It is a certainty that alienating your employees and your customers at the same time doesn’t lead to success. United only seems consistently adept at shooting themselves in the foot.

    Going forward there will be lots of seats chasing skeptical buyers and what better way to move them to other companies than to destroy a continuously devalued loyalty program? People are watching and weighing how companies respond to this time of crisis.

  3. This is just the beginning in changes to FF programs, the way airlines go to market. Cheap fares are gone, operating costs will rise even though oil is depressed and will be for 18 to 24 months. Airlines are faced with effective cleaning of the airplanes after each flight, that takes time and cost money, seating will be an issue for sometime now, empty center seats will be nice but at what cost? Reduced flight schedules mean lower operating income and yes operating cost however you still need a baseline revenue to maintain operations. Older / less efficient planes will be grounded at a faster pace than before, this works well within reduce flight schedules. Capacity to destinations what will that look like?

  4. They also devalued UA metal when coupled w/ a partner award. ie ORD-MUC in J is 60k. ORD-MUC-ARN with MUC-ARN on SK or LH is now 66k

  5. “The reason it does no good is because, as I wrote on March 11, United is only focused on short-term survival.”

    I mean… it’s true.

    It’s a horrible devaluation, but what do you expect from a company that would be hiring bankruptcy advisers and making preparations for a Chapter 11 filing this year but for billions of dollars of taxpayer assistance (thereby only prolonging the inevitable, but I digress…)?

  6. Well, this is probably it for me. I fly United about 60-80k per year, but it’s mostly leisure trips on my own dime in economy. When they changed status qualification, there was really no way I would qualify for status anymore, but I’ve got ~800k lifetime miles so I figured I’d suck it up for a couple years and fly without status until I hit million miler and got lifetime gold.

    But after all these recent changes, I feel like I just can’t trust them anymore. Who’s to say they won’t change the million miler program between now and when I would get it? Seems like it’s time to start spending down my 750k mileage balance with United (while the miles are still worth something) instead of buying cash tickets and then just take my business elsewhere.

  7. Like you said, there will be more award seats available. Or maybe they are going for full capacity on a tiny fleet.
    Can’t wait for the OMAAT and TPG to come up with ridiculous point valuations.
    Mine predictions are
    VS miles = $0/point
    Avianca, likely $0/point
    Virgin Australia $0/point
    AA $0/point (those fcukkers just close folks accounts).
    There are only 3 point currencies worth focusing on, UR, AMEX and TYP.

  8. I transferred Chase points to United last year to purchase an award ticket for next month. I was finally able to cancel the ticket and have my miles returned to United without penalty.

    Has anyone ever heard of success in having the UR -> United transfer reversed? I’d rather sit on UR points than United miles.

  9. @ ABC — That is nonsense, although I do agree that transferable currencies are they way to go.

  10. Same $h%t, different airlines. . .Kirby strikes again. Star Alliance is dead; skyteam is on life support and OneWorld is looking pretty good when this is all done with.

  11. @Robert I know my chances are near zero. Just wanted to know if there was a long shot strategy to attempt or just forget it.

  12. @ Rico – forget it. Transfers are final, unfortunately.

    I disagree with ABC about point valuations (just redeemed for another ANA first class ticket set), but I agree with him that only Chase, Amex and Citi are worthwhile points… and even that is limited as the ecosystem devalues.

    At some point, we’re going to arrive at a point where cash-back is king. United took another step in that direction today.

  13. @Rico, I think @Robert was trying to say is to go get the new amenity kit with the big bottle of lube in it, bc United fcuked you.

  14. They carry the miles as debt on their balance sheet don’t they? So if they change the valuation of the miles they may be able to reduce the carrying cost and book either profit from reduction of indebtedness or at least an increase in retained earnings hence equity.

    They just took out some big loans and did stock offering.

    Maybe this is a way to get some of their financial ratios to look a smidgen better.

  15. It’s probably a small piece of it but consider the billions and billions of points in canceled award tickets that are back in consumer hands now due to the crisis. You have to think that would have a devaluing effect.

    You’re right, they’re behaving like absolute scoundrels, taking the bailout funds and sticking it to their customers.

  16. @Gary I think you are right. This harms them in the long run. Who knows when business travel will come back in a meaningful way, but it would not surprise me if many business flyers start looking at competitors when things open up again. Seems like it would be a prime time to make a jump and if other airlines were smart they would offer status challenges etc to encourage FF of other programs to come over. I’m surprised Chase does not have some clause in their credit card deal with United that limits chase from devaluing points like this. It suggests to me that maybe Chase was aware they were going to do this, otherwise I would think Chase would be furious to see the value of points diminished without warning before they were able to market them to the public in the form of signup bonuses.

  17. This looks like good place to cross-post to offer a different, more upbeat perspective…

    About the demise of the partner award chart, I do not think that the chart disappearance per se is a big deal, and that is a perspective from someone who patronizes Hilton Honors, which did away with their award chart only to emerge as the dominant and more rewarding hotel loyalty program.

    It it true that United has just raised partner awards by 10% *across the board*, which bodes well because the way I read it is that such an *across the board* adjustment of award costs is likely to remain at the same level for a good while, and could just as easily have occurred even without the demise of the award chart.

    I just checked a few of the award costs for my most recent Asian Year-end Escapade(tm), and they are now all 10% higher than a year ago:

    TPE – NRT: Business, from 30K+$15.90 to 33K+$16.70
    NRT – ICN: Business, from 30K+$33.30 to 33K+$34.10
    ICN-PEK-BKK-CMB: all business, from 55K+$38.30 to 60.5K+$28.50

    I can live with the increase if it will stay there for a good while. The cash costs remain one of the great pluses of booking awards through UA due to the lack of so-called ‘fuel surcharges.’

    Since I will be patronizing both SQ and UA and I now have the bulk of my miles as Chase UR points, I’ll have the flexibility to book *A awards either with UA miles or SQ miles, which ever gives me the better deal or value.

    The sky has not fallen.

    G’day!

  18. @DCS
    Hilton Honors is the dominant hotel loyalty program??? LMAO
    And this is from someone who is Diamond and has a million Honors points to play with.

    Give me Hyatt Globalist status any day and their properties are much nicer on average than Hilton’s.

    Marriott Bonvoy is larger and, although I don’t like it, Titanium has proven to be more valuable to me than Hilton Diamond. And Hilton’s selection of hotels doesn’t hold a candle to Marriott’s in the big cities that I frequent.

    They do dominate IGH, Accor ALL and Wyndham. I’ll give you that.

    G’day!

  19. @DCS

    P.S. You should also think about using your Chase UR points for Hyatt transfers, not UA ones.

    Some really nice Hyatt-affiliated properties where you can get redemptions of 2-3 cpp.

    I have never gotten more than 0.8 cpp for a Hilton redemption, and those above 0.6 cpp are outliers.

    Now I will sit back and wait for the rejoinder about the properties in Asia where you got amazing HH point redemptions and the higher earn/transfer rates, etc.

  20. @Gary sez: “– your defense of United is that you aren’t only stuck with United miles. Well, I guess there’s that”

    Not at all! My so-called ‘defense’ of United consists of a set of reasoned arguments, which are rather clear and need to be debunked, unlike your knee-jerk repetition of your own long-standing dogma or bias which we are just expected to believe is true and self-evident.

    In fact, my purported ‘defense’ of UA did take head on each of your truisms, which are that (a) no award chart is by definition a bad thing, when an award chart is inherently inconsistent with revenue-based dynamic award pricing, and its implementation by Hilton Honors did not “kill the program” as was predicted…by you, among others; and that (b) the only reason for a program to hide its award chart is so that it can sneakily increase award costs, as UA just did, which is silly because (i) UA has no illusion that bloggers won’t immediately notice the increase and cry foul, and (ii) it is always silly to believe that award costs will remain at the same levels forever and then to cry foul whenever something that is inevitable happens. Instead, the question to ask oneself must be: is the increase reasonable? Based on my own pattern of extensive redemption with UA, I believe that a 10% increase *across the board* is reasonable and something I can live with, especially since an increase across the board suggests a new award level that is likely to be maintained for a while.

    Lastly, that I won’t be stuck with only UA miles was never in my calculus because I always redeem UA miles on partner airlines at costs that are invariably about the same as United’s own saver awards. Now that partners awards are 10% higher, I suspect that United’s own saver awards will also be about 10% higher.

    Like I said, my so-called ‘defense’ of United is a set of reasoned arguments, and not simply that “I am not stuck only with United miles.’ I’d opted to start patronizing SQ Krisflyer long before UA’s latest changes or the coronavirus so not “being stuck only with UA miles” was never in the equation…

  21. @JohnnyBoy — I will let you LMOA about Hilton Honors being the dominant and more rewarding program because you are clearly clueless from drinking too much kool-aid about how WoH is the “best” program, and before that how SPG (R.I.P) was the “best” program, based on self-serving standards established by the priesthood of self-anointed “travel gurus.” I will take you to school on that in a different context to detoxify you.

    For now, I will just say that HHonors is so rewarding I do not need to use my hard earned UR points on hotel redemptions, Hyatt or otherwise, because I accumulate loads of HH points every year. I consider it a waste of transferable currency to redeem UR points for hotel stays, though other may differ based on their circumstances.

    And your comments on Hyatt vs. Hilton cpps tell me that you are equally clueless about the relative redemption values of hotel points currencies. Get this: a Hilton redemption value of 0.8cpp is equivalent to a Hyatt redemption value of 2.4cpp. That confuses you, which is why you should avoid making claims like you did above.

    G’day

  22. Here’s why this devaluation of partner awards makes perfect sense *right now* from United’s perspective:

    As a result of the coronavirus pandemic disruption of commercial aviation worldwide, which has forced all flying activities to a screeching halt, frequent-flyers **globally** are now flush with points both from refunds for all cancelled award travel and from all planned award travel that did not happen or won’t happen until business resumes.

    I ask you: is there a better time to devalue than when there is a glut of currency? I think not.

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