I’ve written extensively about the changes coming to the United MileagePlus program this November. Now it’s time to share my opinion about them.
Let’s start with the positive. In some cases, awards will become cheaper than ever before. The 5K awards we are already seeing on some routes demonstrate far cheaper awards than United has historically offered. Furthermore, the lack of fees for close-in bookings is a customer-friendly gesture that removes an unnecessarily punitive penalty for business and other last-minute travelers.
But that’s where the positive ends. These 5K awards are usually the type of awards you want to pay for out-of-pocket anyway. Why pay 5,000 miles plus $5.60 for a flight between Los Angeles and San Francisco you can buy outright for $65? And with dynamic pricing, I expect United will mimic Delta: higher close-in mileage prices will more than offset the booking fee that will no longer be collected.
And how about the other side? So-called “Everyday” awards that used to be capped will now have no ceiling. That’s why I am expecting Delta-style pricing on premium awards going forward. That’s a sad thing for two reasons.
The first reason is that it guts the value of the MileagePlus program for the high-spending, high-earning travelers who have, to this point, used United’s “Everyday” (standard) awards to secure premium cabin intercontinental tickets at a high yet fair price when partner space is not available. With these fares expected to balloon, in some cases tripling or quadrupling, a huge value proposition of the program will disappear. Second, it no longer gives United a competitive advantage over American and Delta, which already have very high “standard” award pricing.
The News Isn’t Surprising, Just Disappointing
I was not at all surprised by the news. The writing was on the wall, wasn’t it? The .pdf award charts were recently removed from united.com. When I asked United why about a week before last Friday’s announcement, I was told by a spokesperson:
We don’t have any updates on the award chart to share today.
“Today” was the operative word…surely these changes have been months in the planning.
When I received the call from Luc Bondar on Friday morning, I knew exactly what he was going to say. Not because the info had been leaked to me, but because I’ve been speculating for months that United would shift to a more dynamic pricing model.
That doesn’t make the news any less disappointing. Rather, it just reflects the current state of affairs in the world of miles and points, especially in North America. United made these changes not to add value to the program, but because it could.
United defends its changes in this way:
Increasing award travel prices for the most in-demand flights lets us offer lower prices on other flights. If your award travel is flexible, these updates will help you make the most of your miles.
That’s flawed logic. Of course you can “make the most of your miles” if your travel is flexible. That doesn’t have much to do with charging substantially more for the same flight as before.
Once again, United has tried to sugarcoat an overall negative change as a positive one. No one who knows much about how to smartly use miles will appreciate these changes.
> Read More: My Conversation With Luc Bondar, Head Of United MileagePlus
One (Bad) Surprise
One very disappointing surprise in this news was that changes took effect immediately for travel on or after November 15, 2019. This represented a no-notice devaluation and is different than how United has handled changes to its MileagePlus program in the past.
I really wish United had given passengers at least some notice before these changes kicked in. No-notice changes diminish trust and create skeptical and cynical customers.
My Greatest Fear
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.
Look For Odd Gaming Opportunities
United will continue to make use of married segment fare logic to control mileage pricing. If you’re unfamiliar with that term, you can read a primer on that here.
I hope that United will not follow Delta’s path and offer some odd, non-sensical “gaming” opportunities.
For example, say you want to book from New York to Rome on Delta. You may find that your price drops substantially if you add a “throw-away” segment on a partner.
In this example, New York (JFK) to Rome (FCO) is 125K miles one-way in business class if booked alone:
But throw in an Alitalia segment to Venice and the same Delta flight on the same date in the same class of service drops to 86K:
In what world does it make sense for an airline to charge far fewer miles when adding a partner segment it must pay out-of-pocket for?
That’s the world of married segment logic. While we can certainly “game” the system should United go down that path, I hope it doesn’t offer such odd pricing in the first place.
CONCLUSION
There’s more I could say, but I think you get the point. These changes are good for the uninformed flyers who use their miles for poor-value redemptions when they should be paying for the ticket and using a cashback credit card. For those who appreciate using their miles for premium cabin redemptions on partner airlines, there are no changes just yet…but they’re coming. Mark my words.
What are your thoughts on the 2018 MileagePlus changes?
I’m so bummed.
My United loyalty is over now. I’ll continue to book United if the schedule works for me, but that is about it. I will continue to shift more business to Alaska. Without an award chart I don’t know how much to save. Over time things will get more expensive and it will just make sense to get a cash back card and pay for tickets on any airline. I wonder what will happen during the next economic downturn when load factors are lower.
I know the airlines make money selling miles to banks, and there is an implicit promise to members that those points have a certain base value….but isn’t this all just the natural end-game of people gaming the system, signing up for 10 cards for signup bonuses and filling up all the premium award space?
Yeah, they’re following the rules that’s not my point. They are just creating huge demand for miles from banks and causing what is like inflation in the point market? (Maybe a bad analogy?)
I see a lot of self -righteous comments from people who may be loyal United flyers (like myself) or just somebody with a good credit score who is pumping and dumping cards United maybe called their bluff that they are actually loyal and guess what, everyone is saying they’re gonna jump for whoever offers the best redemption rate for their signup bonuses.
United’s not completely fault free, yes I realize my 400K miles are ostensibly worth less than what I imagined, but take a look in the mirror if you’re a credit card pump-and-dumper and realize that maybe you’re not the oh so loyal customer that United should even care about anyways.
Rebuttals welcome. This is a half-cocked response anyways, just feeling like the outrage is missing some of the driving forces behind airlines’ decisions.
Personally, I’m not angry, just disappointed. I don’t think the problem is supply, especially with 5/24. I think the problem is United knows it can get away with it, so is doing it.
I didn’t sense any anger/outrage from you, referring to comments in your posts and Kyle’s post from yesterday on the same topic.
If Delta “broke the seal” on legacy carriers using dynamic rewards pricing, yeah it was probably only a matter of time before others followed. I guess I wonder then what the driving force was for Delta? That they were the #1 carrier so they felt they could get away with it too?
Cancel your Chase Mileage Plus card when the annual fee comes due, it sends a clear message.
Chase is taking a huge hit too.
Your first graf under “Look for odd gaming opportunities” ends with the word “here”. Is there supposed to be a link to the referenced primer on married segment fares?
Also, does this site have a “notify me of further comments” function? I may be missing something but I end up with many tabs open to your posts due to FOMO.
Hi Colleen, thanks, I added the link! At this time, there is no notification of further comments.
Since you don’t hawk credit card referrals, please consider a post regarding the travel blogosphere – how are these changes cascading through this space? I think we’ve seen consolidation.
In general I think that advertising a value arbitrage opportunity too much closes that opportunity.
To me, it’s clear why United did it. First of all, there’s barely any competition left. Secondly, the bottom line of Delta has only gotten better despite having the least valuable mileage program and in fact is the best of the three. Most of airline profits do not come from giving “deals” to people. lastly, I will say that the millennial generation and the internet and deal savvy young people have really killed any motivations that airlines had. These blogs and ways to get good deals have only harmed the actual process.
Our family got into miles and points when my wife and I decided we wanted to go to New Zealand in Vacation some day and I said I wasn’t flying that far in Coach. We started with United credit cards and then moved into Chase UR points. Our paid airline travel got aimed at United because that was who we planned to use our points on. We put as much spending as possible on our points earning cards and have tended to focus our spend because we don’t have enough of it to generate useful balances across multiple point systems. Hence we haven’t gone in on AmEx MR or Citi’s point currencies. Life, kids, jobs have all gotten in the way and we have yet to take that trip that started it all. We just haven’t been able to.
I don’t need points to book cheap flights in Coach. I can do that with cash. I need points to book long haul premium cabin flights because the vast majority of the time those cash costs are out of my league.
But here is the thing United. Your program has driven me to spend money with you that I likely would not have spent otherwise. I’ve been willing to spend more on tickets to stay with you because I found value in United miles. But if your going to charge Delta rates for premium cabin awards then I’m out. I’m not earning a million miles a year and I’d be better off going cash back at 1.5 or more cents per dollar than paying Delta’s rates which basically always make a point worth a penny.
The point of a loyalty program is to drive marginal spend. You want to leverage it to ensure that you not a competitor gets my business. When all else is equal a good loyalty program should drive that spend into its arms. These changes to Mileage Plus do the opposite. They make the program worthless and consequently drive my spend away from your doors. Mileage Plus could and should be a competitive advantage for United but your decision does the opposite.
I’ll give you an example. I have the old Starwood Amex and I used to put my daily spend on that. Now that we have the fiasco that is Bonvoy I put zero spend on that card because they devalued it by 30%. And their program (unlike Hilton) delivers zero meaningful benefits to me. So in about a month I’m going to burn all of my Marriott points and cancel that credit card because I will be done with the program. They took a program that brought in spend they would not have otherwise earned and turned it into one that now gets zero spend. Your about to do the same.
This whole thing is devastating for us on the east coast. For those on the West at least you still have Alaska. The end is near and soon across the board we will see, like at Delta, the need to use 1.4M miles to get two r/t tickets to Europe for most any dates you search out.
@ Matthew….This may be too tin foil hat-ish, but now that you can only see MP search results via logging in, I fear the dynamic pricing also gets “personalized” …but not in a good way (ok, also cynical too). Thoughts?
We’ll be watching closely for that. For me, I no longer have to log in. I just “x” out the box in the upper right. There was a time when I had to log in, but not in the last couple months.