Ouch! United Airlines Will Eliminate Award Chart and Move To Dynamic Pricing Next Month

United has announced that it will be eliminating award charts for travel on/after November 15th, 2019 and moving to dynamic pricing. Per their website, this change will also affect partner award flights:

The partner award chart will remain in effect for travel through November 14, 2019. For travel on or after November 15, 2019, there may be flights that require a higher number of miles than the amounts indicated on the award chart. When you search for awards while booking, you’ll see the applicable award level.

This follows a move by Delta to eliminate award charts. And as expected, United is claiming that this is good for consumers. Anytime an airline uses the words “consumer enhancement,” replace it with “here’s comes the bomb shell.”

The issue I’ve always had with eliminating award charts (I’m looking at you Delta and Hilton) is that transparency is lost as no set pricing is listed, it’s more difficult to plan a trip thus devaluating what that particular airlines’ (or hotels) points are worth.

WHAT IS A POINTS DEVALUATION?

A points devaluation is, simply, when your points are worth more today than they are in the future. 

Let’s start with an easy example. Even if you do not have any points right now, you’ll be able to follow this example.

First, every airline has a chart with static numbers that tell you how many miles are required to get from Point A to Point B. However, Delta does not <–we’ll get to this later. 

Example: Let’s say that you are interested in flying one-way in economy from San Francisco to Boston on United Airlines. You sign-up for a credit card that allows you to transfer your points from the credit card to the United. The “signup bonus” for the credit card is 50,000 points/miles. You discover through United’s award chart that United Airlines requires 12,500 miles one-way.

Although you may not be extracting the greatest value from your points, it is easy to see that you have, essentially, 4 one-way “free” tickets (or 2 round trips) with this example.

WHAT IS A ‘DYNAMIC PRICING’ CHART?

Take look at November 30th (below). United Airlines is asking for 100k miles for an economy flight.

WHAT HAPPENS WHEN AWARD CHARTS DISAPPEAR

In 2015, Delta Airlines stopped publishing an award chart that outlined how many miles you’d need to travel from Point A to Point B (domestic and international). The only way to determine how many miles are required for a trip is to go to their website and search. However, there is a HUGE PROBLEM…Delta can change their rates on any route at any time. And now, Delta and United rates are no longer static.

Search a route on Monday, and Delta could require 10,000 miles roundtrip. Search on Tuesday and they could require 500,000 for the same trip. Without an award chart, you basically have no way to plan or “save up” for a flight you want to book later on.

Recently, South African Airways announced the end of their Senegal route and you know how I feel about that.

EARN AND BURN MANTRA

You may hear people say “earn and burn” as it relates to points meaning they redeem points as fast as they acquire them. Personally, I think that’s a bit extreme but I also do not fall on the other end of the spectrum where I plan a trip 2 years from now. A lot happens in two years. And in this hobby, if you wait too long you run the risk of devaluation.

SILVER LINING

One positive change is that close in booking fees are being removed for travel on or after November 15th as well.

Additionally, the Excursionist Perk, which allows for a free stopover within a destination region, will also stick around.

FINAL STAMP

Overall, it’s difficult to tell how bad this change really is. It always takes a some time for the real effects of an award chart being removed to be felt largely because award programs want to minimize the outrage of big devaluations.

Frequent flyer miles are a big business for airlines. Unfortunately, the ultimate goal for the airlines is to have passengers acquire the miles, mostly by flying (butt-in seat) but make it slightly challenging to use the miles.

Often, it can feel overwhelming when you are attempting to redeem your miles but as I always say, don’t store excessive amounts of miles with any individual airline (or hotel program) where they are subject to devaluation. Keep them with banks where you can transfer them to miles. If United has a good rate for the flight you want…great transfer the points to them. If they don’t have a good rate, transfer them to someone else.

What do you think about UA’s decision to move to dynamic pricing?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s