This week, United joined the ranks of Delta in removing their award chart and switching to dynamically (variably) priced award redemptions. While in some cases consumers may benefit from the change, infrequent but loyal flyers are hurt the most.
What Is a Dynamic Award Chart?
A dynamic award chart uses a combination of traditional base prices and fluctuations in capacity and load factor to determine a price for a given route. United has stated that the prices are not tied to the price of the ticket (in the way that JetBlue and Southwest are) but this is somewhat untrue.
The correlation between a ticket price increase and the load factor often run hand in hand. For example, a flight to London from New York in coach two weeks following Thanksgiving and two weeks before Christmas is not likely to sell out. Therefore, the price may drop in required point balance vs. peak summer season for the same seat and route. Prices usually run the same way but Mileage Plus points will not be tied to a fixed value.
Essentially, you will never know how much an award flight will cost until you shop it and book it. United has stated that their partner awards will not change (for now.)
Is There a Benefit?
In the smallest defense of dynamic award charts, some routes have gone down in price. Shorter distances like Boston to New York might have cost 12,500 miles one-way before but now can be as cheap as 5,000. That is a clear benefit to the customer.
Some might also point to Delta’s lower prices to Asia and Europe which have run as low as 38,000 points roundtrip. I think that’s a valid point. Delta is using their chart to get people in seats that otherwise wouldn’t fill them while clearing some liabilities off the books.
Still others would rightly comment that it’s better to have something available than nothing if you really need to fly a certain route on a certain date. If you have 100,000 Mileage Plus points and must fly from San Francisco to New York, but can’t afford the cash ticket – it’s a clear advantage to be able to use points where otherwise no award seats are offered.
Why Are Infrequent But Loyal Flyers Hurt the Most?
Lots of infrequent but loyal flyers exist. I have a friend that always flies American but may only fly twice per year. She has given nearly 100% of her business to American for a decade and while that may pale in comparison to frequent flyers, she also engages in the program through their credit card and shopping portal.
Infrequent but loyal flyers are a real thing and the airlines are undervaluing them.
With a fixed award chart, infrequent but loyal flyers had a reason to pull out their Mileage Plus credit card from their wallet. They were saving for a trip to the Bahamas or Tahiti or Dublin. Now, instead of trying to hit bench marks to achieve their goals, they don’t know where the goal posts will be and have no idea how many points they will need.
Just this morning I came across a Facebook post from a group called The Art of Travel Hacking that poses a question to members:
“What award trip did you last book or what trip are you collecting miles and points for?”
The problem is that the [redacted] member responded with a specific number of miles for their trip clearly based on a variable chart. Perhaps that number will remain stagnant but perhaps not by the time the person is ready to book. This commenter is stating an exact figure (assuming they have not already booked it) but when they go to book it could be higher or lower and if it is higher, who knows how much higher? How is the average traveler supposed to plan a vacation that way?
United and Delta would probably say, “Just earn more points and participate in the program further” but for infrequent flyers who love Delta or United, that might not be possible as it is for frequent flyers.
When infrequent flyers accumulate points at a rate of a few thousand per year from flying, it’s tough to make progress without a credit card. Even with a credit card, prices can jump between the planning stages to execution without notice. Lower mileage account balances make this sting even more.
While I am a frequent flyer with United (for now) I feel for friends, family and readers that don’t want to play roulette with their vacations and don’t have the points to absorb higher costs. That being said, for some (a few) they may benefit, especially in a recession when planes are not full and customers are needed.
>Read More: THE POWER OF POINTS IS FREEDOM, NOT JUST SAVINGS
What do you think? Are infrequent but loyal customers hurt more than others by dynamic award charts? Which routes do you think will decrease and which will increase in cost the most?