Cash-strapped airlines and loyalty programs have been ushering in negative changes during the COVID-19 crisis and hoping that customers won’t notice. United’s MileagePlus program has now joined that list.
Effective immediately, partner award charts have been removed from the MileagePlus website. A spokesperson for the program said:
We announced in April of last year that all award pricing will be dynamic beginning November 2019. This change is consistent with other major carriers and allows us to align information regarding all MileagePlus award flights, whether it is for travel on United or one of our partner airlines.
To refresh your memory, a year ago, MileagePlus shifted to a dynamic pricing model for United-operated flights for travel from November 2019. At the time, they said partner award redemptions were safe, with the caveat that:
As of now, we do not have plans to remove the partner award chart, but that could change in the future.
United has followed Delta SkyMiles and Air France-KLM Flying Blue’s lead in switching to dynamic pricing for all flights, and Malaysia Airlines Enrich for their own flights.
Summing up: my take
These changes will not affect most Point Hacks readers. Rather, it is more advanced frequent flyers buying United miles who won’t be happy with this news.
I would also not be surprised to see other non-US loyalty programs to adopt a dynamic pricing model, although it does appear that Qantas and Velocity have embraced the benefits of providing heavily discounted “Classic Flight Reward’ seats in keeping members actively engaged. But w
Moving forward, it will be easier to get value from United miles for travel in Economy Class on off-peak dates rather than premium cabins, especially during peak travel periods.
Our original guide to the removal of MileagePlus award charts for United flights follows.
What is dynamic pricing?
Dynamic pricing means that the price of an award will fluctuate according to demand. In the example below, you can see that a one-way Economy Class ticket from Melbourne to Los Angeles is pricing at 40,000 miles during off-peak periods but jumps significantly in the leadup to Christmas.
What changed in November 2019?
For travel from 15 November 2019 onwards, redemptions for United-operated flights moved to a dynamic pricing model.
For example, up until mid-November 2019, you could book a one-way Business Class flight from Melbourne to Los Angeles for 80,000 miles. However, for the three months of travel after the changes kick in, I could see only one day with a flight pricing at that level, with all of the rest of the days costing 200,000 miles.
One positive change is that close-in ticket fees were abolished for travel from November 2019. That now saves $75/50/25 for general/Silver/Gold members when making a redemption within 21 days of departure. (However, the program later added a miles surcharge for these bookings.)
Another (small) positive is that mileage credit now posts almost immediately after taking a flight.
What isn’t changing?
Changes to upgrade pricing have not been announced.
How does this affect travellers in Australia?
Australia-based frequent flyers usually access United miles by buying them during promotions. Moving forward, the attractiveness of this option is vastly reduced.
CommBank customers can transfer their points to United at a ratio of 4:1, which is a poor rate anyway.
Buying Avianca LifeMiles and using other Star Alliance points currencies are better for travel on partner airlines. However, note that Singapore Airlines KrisFlyer increased the price of partner redemptions in April 2019 and THAI Royal Orchid Plus in October 2019.
Will this help or hurt United?
Conventional wisdom states that dynamic pricing is a win for the airlines, as they are able to optimise the revenue generated from each award redemption. However David Feldman, Airline & Hotel Loyalty Expert, while agreeing with this view in the short term, believes there is more to consider in the long term.
In his view, the value of frequent flyer programs lies predominantly with co-brand revenue; that is, airline co-branded credit cards, crediting hotel stays and rental car bookings to MileagePlus and so on. And growth in co-brand revenue needs to come from more than just engaged corporate flyers and Global Services members, but from those customers who fly once a year or less, which make up around 50% of United’s flight revenue.
The risk for United in the long term is that by removing award charts and essentially killing aspirational redemptions, they ultimately
What is your take on the removal of award charts by United? How will this affect your redemption strategy moving forward?