Loyalty programs offer members goals. If they take a set of actions — flying an airline, spending on their credit card, shopping through their partners — there will be rewards. They may need to have some flexibility to use the rewards at the saver level, but they know what they’re aiming towards.
Unless, of course, the airline simply doesn’t tell members what kind of value they can expect from their points at all. That’s what Delta did four years ago, eliminating award charts, declaring that ‘the price is the price’ at any given moment.
We’ve seen lower prices for the cheapest (mostly domestic) coach tickets, and much higher prices for awards where members used to get outsized value, especially premium cabin international travel. They announce whenever there’s a ‘deal’ and make it hard to figure out when prices go up.
Now United is following Delta, eliminating award charts. Prices won’t go higher for travel, though, until November 15 and members may see lower prices today.
I wrote in January that you should expect this since they introduced premium economy awards but didn’t publish pricing and they removed the actual .pdf chart and only had a lookup tool for pricing by route. Here’s United’s award chart for posterity.
A couple of weeks ago United started pricing domestic coach awards as low as 5000 miles, with the value per mile hovering around a penny, in other words the cheapest points prices corresponded only to the cheapest ticket prices. That’s fine as far as it goes, but the fundamental value of frequent flyer miles comes from getting outsized value, being able to secure travel you wouldn’t afford on your own.
As I wrote at the time, “It’s better to pay United 5000 miles to fly Los Angeles – Las Vegas, I suppose, than it is to pay 12,500 miles. But when fares may be as low as $49 I’m not sure I see it as much of a value.”
How United Explains the Change
This morning I spoke with United’s Vice President of Loyalty Luc Bondar to learn more about the changes. He laid out the “four key goals” for MileagePlus,
Simplify the program, better reflect how our customers travel today, engage the wider member base (not just premium members), and continue to reward most loyal customers in the most meaningful way.
They’re changing award prices in a way that engages ‘the wider member base’ that doesn’t have many points by offering awards at times for far fewer miles than before and in the process they’re eliminating award charts “as of today for travel on or after November 15.” Their goal is to “better match demand for awards with supply of seat availability.”
United makes a “commitment” to be “market leading” and is not “t[ying] the price of a mile to a specific value.”
There’s “no longer a published ceiling” on award prices, so no comment on how high award prices might go. However their “goal is to be the most competitive program in the marketplace.”
What Members Can Expect for Premium Cabin, Extra Availability, and Partner Awards
These changes apply to both economy awards and to premium cabin awards on United. However these changes do not affect how partner awards are being priced at this time. There will be “some variability if United segments” are included in the flight itinerary.
ANA First Class
There’s no change to the booking classes that are being used for awards, and as a result no changes in how extra award availability works for co-brand credit card holders and elite members.
As a side note, although Bondar emphasizes how more members with low mileage balances will be able to use their points, they are not making any changes to their breakage assumptions for determining MileagePlus liability.
Finally I asked Mr. Bondar whether we can expect United to punish members the way Delta has by booking the cheapest awards into basic economy? He told me that this is “not at this point something we’re considering.”
And that actually suggests the value of miles redeemed will be greater than a cent — since even when travel could be purchased for $49 or 5000 miles that $49 fare is often a basic economy fare. The relevant comparison might be to a more expensive ticket.
Removing Close-in Booking Fees and Posting Flight Miles Instantly
United is eliminating close-in booking fees that range $25 – $75 for some members based on elite status for any award travel November 15, 2019 onward.
This seems to make sense when the cost of an award is tied to the price of a ticket. There’s less of a chance of getting outsized value for miles, and therefore less of a chance that someone will decide to book an award ticket instead of buying an expensive last minute ticket (something many loyalty programs try to avoid). As a result the close-in booking fee disincentive is no longer needed.
Meanwhile since Monday miles from United Airlines travel post within 2.5 minutes of gate arrival. That means elite status updates quicker when members cross a threshold and can make use of that status right away on their upcoming travels.
Is This Good for Members, or Gutting the Value of MileagePlus?
As I observed two years ago United and American copy Delta for all the wrong things. Delta can get away with a low value frequent flyer program because of marginally better inflight product, friendlier employees, and better-performing techops that gives them a more reliable operation.
United says this is about increasing value to members, not taking anything away. At some level all we can do is judge empirically what actually happens in practice. But from my perspective there’s absolutely zero reason to believe that members will get more value from the program over time. Instead miles will become easier to use for low value awards, and opaque pricing will make it easier to increase the cost of high value awards.
Although I disagree forcefully, The Points Guy has argued making the best awards more expensive is good for members because it means fewer members can afford them, and those who still can might find better availability.
In 2014 I was sitting with American Airlines executives when news broke that United was copying Delta’s move to revenue-based mileage-earning. I was told that American wasn’t going to do the same thing, they had some changes in mind to reward high spending customers but would do it ‘in their own way.’ It was only six months into the US Airways takeover, and they hadn’t realized that airline President Scott Kirby would overrule the AAdvantage team’s recommendations. Now Scott Kirby is President of United.
I know how I’m betting this turns out, based on nearly 20 years watching and studying this space. I’d love, however, to be wrong.
What a bunch of horseshit from the UA VP. And saddens (sickens) me to see how these other airlines are following DL in almost every way. What has happened to original, innovative thinking in America ….. or in the American airline industry.
Is there a terminator we can send back in time to find teenage Scott Kirby?
This sucks. I’ve enjoyed United’s award pricing transparency for many years – I always knew I could get ”home” for 80k miles on a Saver award. I was just about to apply for their credit card for the miles and enhanced award availability. Now I’m not sure it’s worth the 5/24 slot and hard pull.
It looks like the close-in booking fee was eliminated as early as yesterday. I booked a last-minute flight yesterday afternoon, and was not charged the fee.
“Simplify the program, better reflect how our customers travel today” Typical corporate word spin to back-stab their customers. Any time the airlines have made changed to their FF programs, they lie through their teeth about the changes being better for their customers. They are using the same dirty spin techniques that dirty politicians use to gain votes.
If there is no award chart, how do I know how many miles I will need to save to be able to get an award seat? If I have no idea about how much something will cost, how will I now that I have enough to pay for it?
TPG of course would argue for airlines….he’s a shill.
saver award is still expected to keep the same price or lower. partner award is still expected to keep the same price for these “bargain seekers” united my want or not want, nothing changes. so keep applying your credit.
There’s no spinning this, its a massive devaluation of our miles. The game keeps changing
SO GLAD I didn’t apply for that United credit card now, (or the CSP, for that matter, since I was considering it mostly for transfers to MileagePlus). I have zero miles with United, and it may just stay that way.
I would probably be OK with lower valuation in mileage programs if the airlines would just say “OK, all miles equal 1.x cpm, on any flight, at any time” and stop all this variable-pricing (miles-gouging) BS.
Delta is disingenuous in advertising “no close-in booking fees”. If you book less than 3 weeks in advance, they increase the mileage cost substantially – in essence, charging a close-in booking fee of hundreds of dollars worth of miles in many cases.
Hopefully United will not copy (or, if they do, will impose a more moderate extra mileage cost). But I’m not betting on it.
I’m confused. How will XN inventory work for the credit card holders? That’s what keeps me renewing the card.
@stvr Bingo. That’s absolutely the key question. Gary – Any chance in getting an answer on that?
UAPhil – Delta award costs are tied to cash pricing. Usually, prices go up last minute, so mileage costs go up. United will undoutedly work the same way. However, I’ve noticed pretty cheap pricing close in on Delta on weekends (in both miles and cash).
How much are UR points worth now?
Seriously, if you have UR points and CSR, , nobody should transferring points to UA for domestic travel.
@stvr I believe the fee-free personal card also provides enhanced award availability. Look into downgrading to it and avoid the annual fee.
“United makes a “commitment” to be “market leading” and is not “t[ying] the price of a mile to a specific value.””
I found this statement highly skeptical. So United is telling me that when a one way award in the US is ~$500, we may see that award mileage amount at 12.5K? I imagine it will be dynamic, similiar to Delta… Good luck finding typical 12.5K one way award for high costs of tickets.
TBH, award chart increases (devaluations) have been a regular thing anyway. Every time they do that, the blogosphere creates some negative press. It also misleads the infrequent flyer — if the implicit promise of “save up X miles, get a nice free trip” is always met with “oops, we just pulled the rug out from underneath you”. well people just get pissed and call the thing a scam. By not publishing an award chart, they can stop that negative reaction.
The flip side is that no award chart = no “savings” goal to meet, so no real incentive to change my behavior.
Loyalty programs stopped being a motivator for me a long time ago. Don’t get me wrong, I take every advantage that I can. But given my travel patterns and my ability to rack up points via credit card, my “burning” of a mile is actually years behind my earning of it. I usually take one multi-week vacation every year, so now, when I want to go somewhere, I look at my stash and decide the best way to get where I want to go.
F U Scott Kirby.
“There’s “no longer a published ceiling” on award prices, so no comment on how high award prices might go.”
This question needs to be answered.
Using partner airline program miles to redeem for close-in travel on UA short-haul flights is going to become way more AAwful with this UA change.
Mirroring DL’s changes to how miles are redeemed for flights won’t bring good things to UA customers in the main nor to partner airline program customers trying to redeem miles for UA flights.
This UA change is another sign of the times. Earning UA miles from UA credit cards or other non-flight activity is going the way it has gone with AA and DL before it: a game for losers who fail to consider the alternatives out there.
Not keeping members informed to me is “shady bidnis.” Your thoughts on this?
I like how you quote super rich TPG. It’s equivalent of arguing for high country club fees to keep out the riffraff.
This sucks, and it gives me even less incentive to fly United. I hate them because of terrible customer service, how they treat customers, and bad experiences I have had with them (cancelled flights, being bumped, mechanical issues and not giving compensation), but this really simplifies things for me. I will fly Southwest, Delta, and American, in that order, for my domestic flying. Southwest, because of their transparency, Delta, because they have the best product, and American, because they have the best domestic rewards program (besides Alaska).
One thing I have noticed is United did not give a lot of saver availability anyway for domestic flights, so I did not have much of an opportunity to redeem points at a saver level. Maybe this will give people a better opportunity to find low mileage fares during non-busy times, and actually save miles like we are already seeing. Either way, so long United, it’s not me, it’s you.
Chase is going to get hurt by this. Bought billions of united miles and now stuck with them.
Buh bye Chase United credit cards!!
The mileage run is dead. Recently, mileage rewards were phenomenal because you could fly transoceanic F for perhaps 2-3x the miles to fly in coach, whereas you would need to spend 10-20x the number of dollars to purchase F seats compared to coach. The ratios are changing and I’m planning to stock up whatever currencies are flexible, like Chase UR points. I used to be a 1k with UA and Exec Plat with AA (earned in the same year at one point). With devaluations in last handful of years I am less likely to be loyal and more inclined to book travel based on low cost and efficient routing. I can accrue flexible Chase UR points via credit card offers/spend and apply them to get the best international F experience available.
Gary, was UA’s “VP of Loyalty” (you have to love that job title, sounds like a Soviet Commissar) Luc Bondar’s nose growing when you spoke with him? 🙂
@Andy nails it – but we need a few terminators to go back in time after Kirby, Bastian, Parker, and their granddaddy in gutting customer loyalty, $mi$ek.
I’m well on my way towards burning up my AA miles, will now put those UA miles on the fast track. As @Ed notes, Chase and Citi are big losers in this race to the bottom between the “Big 3” US-based air carriers. When I next board da plane, I’ll give my seatmates an earful when the FAs are shilling the credit cards.
@Ed has a very valid point. Doesn’t the banks protect itself against radical changes in value of the miles when they enter into contracts? I agree that United’s miles are worth considerably less today than they were yesterday. Though theoretically it wouldn’t have to be terrible, I think that’s a forlorn hope, based on everything that we’ve seen before. Personally the key will be what happens with partner awards, as that’s really the only thing I care about. I doubt I’ve booked a United domestic award in the last decade.
United had won us over (formerly 18-yr annual Delta Platinum/Diamond flyer)…..great availability for 30k awards to/from Europe. I consistently saved miles and transferred UR for our family trips to Europe. We kept charts to hit goals (“90k and we’re all in Barcelona!”)……but now, how will we know how many we will need to reach these goals? Delta is a joke on redemptions—250k+ for business class one way to AMS?!! Are you kidding me?! Now United is headed the same direction……
You won me over with transparency and a clear path to reward me for my loyalty. Without clear charts the whole exchange becomes one-way…..used to be: “fly with us today and tomorrow there are these attainable rewards”…..now: ”you fly with us, and then in return you’ll get whatever nebulous value we feel like tomorrow.”
Why would I bother going out to IAD/SFO/ etc again just to fly United when there are other (less expensive and more convenient) options?! I’m genuinely tired of the constant revaluing of these programs……feeling less like a valued member and more like a commodity the airline is wishing to maximize.
Alaska will be gaining a new elite flyer staring in November!!
@ Gary — We have to remember that TPG supposedly earns millions of miles per month through his business expenses, so I suppose more availability at higher prices is great for him.
Can we all agree that The Points Pimp is the correct way to reference TPP?
This is terrible news for the average reader of this blog. As a close to a million mile United flyer, I’m going to burn my United miles (I don’t have that many stashed) and see what these awards look like before I started accumulating miles.
I left UA 2 years ago as I could no longer bear to be treated like a convicted felon by GAs & FAs even as 1k.
That said, the single best feature of UA mileage plus was the fantastic availability of close in seats at saver award network-wide, including overseas. I have booked several last minute trip at 30k miles to EU each way on flights not full while the cheapest paying fare was over $3k !! This is still the only reason I fly UA from time to time overseas like I did last month.
If UA is eliminating this by putting a fixed price on miles, then their mileage plan will be completely useless and I will no longer fly them.
I don’t think United has a problem letting business go with most of the commentators here.
What they are shifting to rewards people who either spend their own or other people’s money on either United-originated tickets or through co-branded credit cards.
In the end it’s still a heck of a lot easier to just buy with cash.
ADP,
UA aren’t shifting to rewards people who either spend their own or other people’s money on either United-originated tickets or through co-branded credit cards. This change is meant to devalue UA miles for
all sorts of UA customers, including the OPM customers and those who overpay for UA miles by using UA branded credit cards.
Sorry, Gary, when your primary gig is peddling credit cards with huge mileage bonuses, you just aren’t credible complaining about devaluation.
Folks: miles are so easy to get it is no surprise that awards cost more.
Credit card miles are part of the problem
Weasel words from the VP of Loyalty, Luc (?) Bondar. Is there really any way to sugarcoat a steaming turd to make it more appertising?
I think that guys like this, sitting in a lovely office with an overblown title on their nameplate feel the need to do SOMETHING, anything, to attempt to justify their oversized salary, or push for a big raise.
To hell with what the moaning, dirty masses want! Change for the sake of change is never a good idea.
Mr Bondar would do well to realise that an airline FFP is almost always worth more $$$ than the flight operations on their balance sheets, and should be treated with appropriate respect, not stomped all over.
Be interesting to see how long this grifter lasts in the job.
”Delta can get away with a low value frequent flyer program because of marginally better inflight product, friendlier employees, and better-performing techops that gives them a more reliable operation.”
I’m pretty sure that UA can, and will, “get away” with this move, too.
And it’s not necessarily bad for travellers. It kind of depends on how you use your miles. Yes, sometimes variable pricing raises the cost of award tickets. But, just as often, it lowers them. I’ve personally booked several excellent variable awards in the past year on DL and AA like 10K transatlantic coach tickets. In contrast, if you live on the USA East Coast, transatlantic coach tickets at a fixed price are usually a bad deal when they’re 30,000 miles each way. I know I’ve never redeemed for one. So I would not necessarily value a fixed award ticket as being “worth” what the published fare is for that specific flight. Many travellers would prefer to redeem fewer points for “lower value” tickets. In many cases, this is a win for both the airline and the customer. I think these changes will make award redemptions “different,” but for at least half the travellers the changes will make the program better, or at least not worse.
I do not believe that Delta is getting away with it. I think they have left millions, maybe billions of Frequent Flyer Miles revenue on the table through their strategy of devaluing miles. I myself, have never considered an Amex Delta card or flying Delta (unless really good Delta tickets fell in my lap out of the clear blue sky). In my opinion, Delta is profitable, despite the revenue they lost through their policies towards their Elite and frequent flyer miles. Of course without an Alternative Time Realities Machine (LOL, I wish I could find one), there is no way to prove it.
Now you may wonder about my statement “unless really good Delta tickets fell in my lap out of the clear blue sky”. Well they did. Once I was pulled into a silent charity auction by a friend. They were auctioning first class Delta tickets. I put in a really low ball bid and surprise won. That is how I know what Delta One feels like. It would take more extreme luck, like that, to cause me to fly Delta again.
The customer is getting Bonvoyed here. If United ever had an original thought, it would die of loneliness. I’m curious about Chase’s take on this. They’re should be apoplectic.
I’m disappointed with United Airlines.
My daughter was flying from Denver to Albany NY for a weekend visit to her mother who is dying of cancer. According to the United website flight 672 arrived in Dulles @945P with the Albany flight departing from Dulles @ 10P. My daughter missed the connection and is scheduled to leave Dulles @600A and connect thru Newark arriving Saturday @ 1045A. She will be departing ALB @ 1020A Sunday morning so that she be in Boulder to help get her two sons off to elementary school Monday morning. I’m disappointed United did not hold flight#4970 to help us.
This was announced on a Friday – that basically confirms it was a devaluation and a massive one at that
I too hate this move
That said,
We claim these devaluations will kill the golden goose and make credit card companies apoplectic…
The same week that Delta (king of devaluation) inks a massive 10 year deal with Amex
Seems like the cc companies are fine with devaluation
I rarely fly Delta, despite living in a hub. Have had 25,000 miles sitting in my Delta account for years. Would occasionally look to use them and the cost was insane for domestic flights. Recently, I had to go to Vegas and inbound flights were pricey. Found a Delta award flight for 9k in coach and 18k in F. Every other award flight on the same route that day was from 30k to 50k in coach. Just insane.
@JRMW – Amex reupped with Delta because Amex is still smarting from losing Costco and couldn’t afford to lose another partner. That doesn’t mean that it was in any way a good deal for Amex, just that sometimes a terrible deal is better than no deal. When United did their last round of big devaluations where they jacked up the price of partner awards, they were going to charge the same higher rate for UA metal until Chase threw a giant fit, so United backed down. Now United is making rather than losing money, so they’re in a stronger position to ignore partner demands. If Chase can’t do anything about it right now, then complaining in public won’t help them, so they just have to pretend that they’re okay with this massive devaluation.