Keep calm. United Airlines is not engaging in dynamic pricing of partner awards. However, it seems all but inevitable that day will come. It’s all about the award chart…
One Mile at a Time noted language on united.com yesterday that suggests that partner award pricing may be dynamic starting next month:
How will this affect award flights on partner airlines?
The partner award chart will remain in effect for travel through November 14, 2019. For travel on or after November 15, 2019, there may be flights that require a higher number of miles than the amounts indicated on the award chart. When you search for awards while booking, you’ll see the applicable award level.
This language has been present since Spring and comes as no surprise. The MileagePlus “devaluation” took place immediately for flights after 15 November.
View from the Wing argues this means that when you add a United flight to an itinerary with a partner flight, the partner award itinerary can change price. He even confirmed that interpretation with United.
While that is a true statement, I don’t read it the above that way, since the verbiage above is talking about “award flights on partner airlines”, not award itineraries.
Instead, I see United laying the ground work to offer dynamic partner award pricing later in a manner similar to Delta (no notice changes to the unpublished price of partner awards plus higher cost for booking close-in).
Why Remove Award Charts?
Indeed, I pressed Luc Bondar, head of MileagePlus, exactly on this issue. You can read my original story from April here.
Why remove the chart if the price won’t change? Why not have a separate fixed award chart for partner awards? After all, United already charges a premium for business and first class redemptions on partners. Isn’t United laying the groundwork to increase, or at least greatly fluctuate, the cost of mileage awards?
Bondar told me that is not the objective. He stressed the “simplifying” goal once again and told me that partner awards, at least for the foreseeable future, would remain at a fixed level. Furthermore, he assured me there “no plans” to increase pricing on these awards in November.
We don’t see any changes to partner award pricing for travel on or after November 15, 2019. I do not expect we will see changes for at least a year.
My Greatest Fear Remains Unchanged
But last April I also wrote a separate story on my “greatest fear” concerning MileagePlus and my sentiment remains unchanged.
United will not change pricing on partner awards in the near future. That’s good news. But the removal of award charts also removes accountability. Delta also did not immediately increase the price of partner flights overnight. It happened over time. But when it happened, it was swift and painful (30% price increase). And of course, Delta denied a devaluation…how can it raise the price when there is no price published?
Much more so than SkyTeam, Star Alliance partners tend to release award space at the last minute. That makes booking last-minute awards a much more valuable proposition on United than on Delta.
My fear is that United will start charging more miles for close-in bookings, just like Delta. Flying to Asia on Delta? It’s 105K miles if you are booking within 21 days of travel or 85K miles if you are booking more than three weeks out. Delta pays the same price to its partner for award space. The increased pricing is simply a mileage-based close-in booking fee.
If United starts charging a premium for close-in partner awards, its greatest program offering, then I don’t see how it will make sense to continue with the MileagePlus program for my own travel needs.
This is all about the award chart. Why remove an award chart if there will not be any changes in pricing?
Even if the addition of United segments to partner awards will result in cumulative pricing, which would represent a devaluation, why not maintain an award chart for partner-only redemptions?
The answer is simple, even if United won’t admit it. It wants the flexibility to change pricing as it sees fit, including on partner awards.
CONCLUSION
Like most automobiles, frequent flyer miles are a depreciating asset. That’s why I lease cars and generally avoid huge stockpiles of miles. Miles should be considered an inflation-prone currency, not a retirement nest egg.
Thus, I earn and burn…including on United.
United isn’t raising the price or deviating from a fixed-price model for partner awards just yet. But it already has the technology in place to do so and I see the removal of all award charts as a virtual guarantee it is a matter of when, not if.
> Read More:
- Huge Changes To United MileagePlus Coming On November 15, 2019
- My Conversation With Luc Bondar, Head Of United MileagePlus
- My Thoughts On United MileagePlus Changes
Sorry to be off track, but now you have to tell me more about how leasing avoids automobile depreciation. After all, isn’t depreciation part of the lease formula?
It’s not that leasing avoids deprecation. Rather, I just don’t like to own products that quickly lose value. I never get too attached to a car because I know, soon enough, I’ll just trade it in for a new one.
So you’d rather pay similar amounts forever for things you’ll never own? Also, quality cars don’t depreciate nearly as much as a couple of decades ago when driving the car off the lot meant losing a third of the value instantly.
Leasing allows one to have a short term but no long term liability with a car loan. Every 3-4 years one gets a brand new car without having to worry about maintenance issues or being out of warranty. We always hear people with 15 year old used cars talking about having to come up with 2000 because something needs repair or 4000 for a new transmission. Then they have to arrange alternate transport for a week.
I rather just pay a premium to not have the headaches and to not have a 40K liability on the books instead of a 3 year lease agreement. Sure if your financial situation changes you can sell the car but some cars are underwater by 10K very quickly. With a lease I know my 400 a month payment ends at a certain date and I can get a new lease, not get a car or buy a cheap old beater depending on my financial situation. Housing is a different story because houses don’t tend to depreciate like cars.
Very nicely summed up.
You make some valid points. I guess in part, I’m just cheap and I hate owing money. It’s also the same philosophy with renting vs. owning your residence, where I prefer to own if I’m paying anyway, depreciating or appreciating as an asset. Also, my wife’s vehicle gets very little mileage, so handing it back after a few years would be really costly. Another issue is that if I spill, get a scratch or dent on, or otherwise accidentally deface my car, I’m not stressing over harm to somebody else’s vehicle. One other point is worrying about going over the allotted mileage. Lastly, my car is 7 years old and has needed one repair. This is normal for cars these days, so maintenance is much less of a consideration unless you bought a BMW.
Ultimately, if you have the money and prefer to spend it on a lease, there are worse things to do. I look at my brother in law who keeps leasing cars. He’s been at it for 20 years now. He could have bought a vacation home with the money he spent beyond what it would have cost him to buy a couple of reliable cars. JMTC.
“Step right up, ladies and gentlemen! Find the pea under one of these three shells and you will win BIG!”
I get the argument about earn and burn but in reality most people save up miles with the idea that they can use them for a specific aspirational journey typically with loved ones. So when an airline mucks with the planability by becoming intransparent and unpredictable then for many it will also undermine the value and worth of collecting miles. I fly Delta for example but only if I snag a business class ticket at deep discount or they have a good point to point connection. Otherwise I avoid them at all costs because I know their frequent flyer program is a joke. In contrast at this point I go out of my way to fly United because their program and miles where credible.
From the announcement of the flexible award price on United flights, I knew that they would eventually turn into the next SkyPesos program.