Money + Miles Awards At United Airlines: Good Concept, Bad Value

The concept of applying miles toward the value of your purchased ticket is a blast from the past at United Airlines and an intriguing one. But there is virtually no value under the current iteration of this redemption option. Please do not waste your miles on United’s Money + Miles awards unless you really are walking away from the MileagePlus program.

United Airlines Money + Miles Awards: The Basiscs

Let’s first look at some key details about the new Money + Miles redemption option:

• The new Money + Miles awards are available on most domestic flights (and will be expanded to international flights at some point) and can be used to offset the cost of economy, premium economy, business, and first class tickets
• These remain revenue tickets and MileagePlus members will still earn Premier Qualifying Flights (PQFs) as well as Premier Qualifying Points (PQPs) for the portion paid in dollars (or other non-points currency)
• All elite benefits will apply (these are not like Basic Economy tickets)
• MileagePlus members can redeem as little as 500 miles to offset the price of  the ticket

United tried something similar about 15 years ago before the merger with Continental Airlines, but abandoned it over a decade ago.

How Much Is A Mile Worth in United’s New Money + Miles Awards?

I took a look at a one-way ticket from Los Angeles to Washington Dulles departing in February. The cost for an economy class ticket was $173:

I clicked on purchase and logged into my MileagePlus account. After entering my personal info, I came to the payment screen, where a new Money + Miles option is available:

A range of mileage options was available between 560 miles and 8,000 miles. the 560-mile option resulted in a discount of $3.36 off the airfare:

(The base fare was $146.98, meaning the $3.36 dropped the fare to $143.62. With $25.42 in taxes, the grand total was $169.04 plus 560 miles.) That means the each miles was worth $0.006 (0.6 cents each). That’s a HORRIBLE value.

I value MileagePlus miles at 1.5 cents each and if you are not getting at least one cent in value for your miles, please use a cashback credit card. There is simply no reason to earn miles worth 0.6 cents each.

How about if I applied the full 8,000 miles, the most I was able to apply?

8,000 miles took $68.00 off the fare, a value of $0.0075 or 0.75 cents each. Still horrible.

Good Concept, Horrible Value

United sees this new concept as way to “re-engage” MilegePlus members with MileagePlus:

“The value depends upon many factors and can be higher for our Chase United cardholders. For members with just a few miles in their account, they can now unlock value with lower balances which is a great way to re-engage with United and MileagePlus.”

(this from an internal discussion shared with Live and Let’s Fly)

While it is true that MileagePlus members who have a few thousand orphaned miles in their account might find it better to save a bit on airfare than simply let them sit in the account, this is a very poor value for just about any traveler, even a casual one.

Even redeeming miles for this flight in the conventional way was 12,500 miles + $5.60, meaning 1.33 cents per miles (still a poor value, but a bit better…):

So what gives? Why would United offer such a poor value? Probably because it can and people won’t notice it. I also think this program is targeted at those with low MileagePlus balances who will be thankful to find some way to use these miles.

But it’s a bad value, folks. It’s really bad value. Let’s hope this does not foreshadow any future moves with the greater MileagePlus redemption program, because if it does, there will be no value left in MileagePlus. None.

That said, the concept of applying your points toward airfare is not a bad one. If United actually set the value of a point at 1.5 cents instead of less than half of that, I think many (myself included) would be much more receptive to this new program. That would also spur immense spending on United co-branded credit cards.

But while that may be too generous right now for MileagePlus, the 0.6 cents per point is simply an insult to MileagePlus members.

CONCLUSION

The ability to offset the price of a revenue ticket, even partially, could be a win-win value proposition. It is not right now, though. Stay away from these redemptions until (or unless) United decides to sweeten the redemption price to a meaningful value.