United Raises Partner Award Costs: Here’s The Breakdown…

When the going gets tough, stick it to them where it hurts…United Airlines has raised the cost of awards on partner airlines by at least 10% across the board.

Earlier today I wrote about United Airlines’ decision to no longer publish partner award charts. United says this is done “to align information” and is “consistent with other major carriers”. I made a trio of predictions and figured it would only be a matter of time before prices went up.

Sadly, it took only hours for prices to go up. Yes, even though we are in an era of empty planes and depressed demand; even though we are in an era in which airlines will need to win back customers once travel resumes again, United decided to raise rates.

I have examined pricing and can make these observations:

• Prices are up 10% across the board on partner awards
• The new pricing takes effect for travel on or after July 01, 2020
• Prior to July 01, 2020, “old” pricing applies, which includes a surcharge of 3,500 points over former “saver” levels for awards booked 30 days or less prior to departure
• United appears to be experimenting with an additional surcharge for nonstop flights on some routes

Let’s look at some examples:

One-way flights between North America and Europe on Star Alliance partners will rise from 30K to 33K for economy, 70K to 77K for business, and 110K to 121K for first class.

For Japan, prices will go from 35K to economy class to 38.5K, 80K to 88K for business class, and 110K to 121K for first class.

For Southeast Asia, prices will will rise from 40K to 44K in economy class, 90K to 99K in business class, and 140K to 154K in first class:

Central America will go from 17.5K to 19.5K in economy class and from 30K to 33K in business class. South America will jump from 30K to 33K in economy and 60K to 66K in business class.

Finally, Africa will jump from 40K to 44K in economy class and from 80K to 88K in business class:

Outside North America, United’s popular 8K one-way awards on flights 600 miles or under within a single region will now cost 9K.

Interestingly, it appears that United is experimenting with higher costs for nonstop flights over connecting flights. For example, London to Bangkok nonstop on Thai is 49.5K miles while a connection in Germany is 45K.

As for timing, note that award prices do not change for trips prior to July. For example, travel on Lufthansa next week is the same price as we’ve seen for several months:

As late as June 30th the price stays the same. Note the 30K one-way pricing below.

But look what happens on July 1st: the prices goes up 10% to 33K.

This is the same with other partners and other regions. For example, ANA is 35K for economy and 80K for business on June 30th:

But on July 1st, the price goes up 10%.

Note we will now have to wait and see whether these new award rates fluctuate and are assessed another close-in surcharge as travel draws near. My bet is yes.

And do note that United award are currently pricing the same as usual, meaning former “saver” rates have been preserved. In the case of Europe, that is 30K for economy class 60K for business class. Do note this leads to some odd pricing if “saver” business class is available but not economy or premium economy:

Yes, I’d take 60K for business over 120K for premium economy or 45K for economy any day…

CONCLUSION

The “beauty” of not having award charts is that there is no more devaluations, at least technically. If there are no published costs, there can be no cost increases. But shrewd consumers recognize this game and will respond accordingly. United feels like it is doing what is necessary to protect itself. But I see it as kicking consumers while they are down, which will have adverse long-term effects, especially with its biggest and best customer, Chase Bank. Time will tell if the usual short memory span leads to indifference or a more painful retribution.