Just to reiterate a warning I feared and is now a reality: United’s new variable award pricing means some awards are pricing at levels under one cent each. Don’t waste your miles on these awards.
While Live and Let’s Fly stresses the outsized value of premium cabin redemptions, the fact is that most people redeem their United MileagePlus miles for domestic U.S. economy class tickets. That’s not a bad thing; it’s just not extracting the kind of value from your miles that makes this whole points and miles game so interesting for me.
But there is a red line when it comes to miles and points, and that is one cent per point. Some would argue that it is more, but no one with any credibility would argue that it makes sense to collect points in a program that gives you less than one cent per dollar spent in value, since there are so many 1% cash back cards on the market.
That’s the trouble with many domestic economy awards in United’s new era of dynamic award pricing.
Take for example a trip from Newark to Rochester that I just booked for a client. She wanted to use points, but it simply did not make sense:
A Basic Economy fare cost $111 while a “regular” economy fare cost $146.
How about using points?
17K plus $5.60 means less than one cent per value.
There are many examples I could cite, but you get the picture. The cheaper fares above were $114 versus 9K + $5.50, still about a one cent in value.
CONCLUSION
Fear not, it’s not like MileagePlus miles are suddenly worthless.
The flip side is that there are some good deals, including “saver” business class fares that you can still find on many longhaul routes close-in. 63,500 miles for a one-way business class to Europe is still far better than the cash price. There are other sweet spots that I will outline in a future post.
But double check the cash price before you use miles. And if your’e the type of person who uses your miles for economy class redemptions, consider a cash back credit card now more than ever.
image: United
> Read More: Fundamental Changes To United MileagePlus In 2020
> Read More: Broken Promise: United Partner Awards Already Pricing Higher
Another issue with United which I’m literally on the phone now trying to resolve is with the new pricing models you cannot book any economy class other than basic economy via Ultimate Rewards. According to them, United is only making basic economy available for booking through portals. United and Chase are working their best to further destroy their products.
Variable pricing isn’t meant to help the customer.
I say the bar should be 2% as there is the Citi Double Cash card.
I sometimes like the flexibility of awards (I’m United 1K, so can redeposit for free). And I’ve had friends (miles rich but cash poor) who viewed miles as a depreciating asset so liked to use them to conserve cash.
Meow!!! I haven’t booked too many flights since the change. Saver space will continue to be saver space. 15k is the new 12.5k apparently. Do we know how they determine the close in penalty? E.g. 1k, 2k, 2.5k? Do we know roughly what revenue fare class corresponds to X/XN? I suppose these questions would be better asked on FT!!! I just got a free upgrade on EWR-SRQ at 15k. Very nice meal 🙂
Salad or protein plate?
Look at AA pricing recently. 480000 miles EACH way for LAX-SYD on most all days.
And here’s some dumb blogger claiming dynamic pricing is great: https://liveandletsfly.boardingarea.com/2019/12/22/american-airlines-shows-advantages-of-eliminating-award-charts/
I don’t like variable pricing and Kyle can defend himself, but I”d argue that AA has some very sweet dynamic specials that we have not seen from United yet.
can you explain the bit about the cash back credit card?
Should I bookMark this site?
“no one with any credibility would argue that it makes sense to collect points in a program that gives you less than one cent per dollar spent” – you’re confusing value per mile and per dollar spent.
United gives 5 miles per discussion spent without status, so at worst you’re getting 5% back.
It doesn’t make it a good deal.
I’m talking only about credit card spending.
“Dynamic award pricing”, “New requirements to be 1K/Platinum/Gold”.. All the changes United has made are not good for passengers. It is okay to disagree with my comment. Just see how long one can keep up to be 1K/Platinum with United under the new rules.
I’m pretty sure this is the first time one of my favorite blogs mentioned my hometown!!
just booked a multi city for next month SFO to mad via fra , mad to lis, and lis to SFO via bcn in business for 60k ea way + $111 in fees. sfo to fra is with new Polaris, as is the return from bcn to SFO which I think is a special route they run for mobile world conf. pricing out on United was around $11k each way. one of the best redemption I’ve ever gotten with mileage plus at around $0.10 per mi.
Indeed, these sorts of awards still represent tremendous value. Shorthaul economy class awards…not so much.
Honestly, if my life was all about flying between Newark and Rochester in Basic Economy, I think I’d just put a gun to my head and relieve my suffering. Worrying about the value of points for that relative to paying with cash would be way, way down on my list of problems. YMMV.
If anyone on God’s green earth can figure out how to use their miles for anything, please let me know. I ha e never seen anything so complicated in my life. PQF and PQP and going to get me out of this program PDQ. (Sorry, I couldn’t help myself.)
There are exceptions though. I just threw 82K miles +$128 at SFO-HNL-GUM-ROR in Economy with a return that had a two day layover in GUM. That itin regularly prices around $2,000 or higher in Economy because United has a virtual monopoly on the region. For me the choice was spend two grand or $128 for a trip I was already on the hook for several more grand (scuba trip). That was an easy decision to make.
But I learned while going through this award booking exercise that I was being priced 40.5K miles to do SFO-HNL-GUM-ROR but if I tried to book just SFO-HNL on the same date with the same flight it would have cost me 80K miles. There’s nothing Dynamic/Capacity constrained about that difference in award prices. United will jack the award to 80K for SFO-HNL because the load has gone up high enough but not pass that increase on if you go all the way to ROR in order to not dissuade you from going to ROR.
Assuming this is the system United is now using for awards, it opens up the possibility for hidden city award travel if you want to risk it.