If you want to redeem miles and points for max value when booking award flights, it is important to understand the different types of award ticket pricing. In a recent post, I discussed 3 different types of award ticket pricing.
I briefly mentioned a 4th type, but until last week, Delta was really the only program using that type of pricing. KLM/AirFrance also has some sort of dynamic pricing, but they are a little more predictable (at least when a partner, such as Delta, operates the flight).
A recent announcement from United and a rumor about American Airlines means I need to expand on this fourth type of award ticket pricing which is commonly referred to as “dynamic pricing”.
The announcement and the rumor
The announcement: Last week, United announced that they are making some changes to award travel. The worst of the changes are effective immediately for travel on or after November 15, 2019. Two words: dynamic pricing. More on that below.
The rumor: American Airlines will be following suit with dynamic award pricing.
AA is purely rumor and speculation at this point, but United has confirmed that these changes are imminent. In fact, award travel that starts after November 15 is already subject to these new terms. This means that even if you book the flight today, if travel begins after November 15, your redemption cost might differ from the current award charts.
Overall, the changes are not good, but I’ll also explain why this isn’t the end of the world.
So, what are the changes that United has announced?
Below is the email that was sent to Mileage Plus members last week:
United reminds me of my kids
Jack: “I cleaned my room and you only had to ask once!”
Olivia: “I brushed my teeth”
Taylor: “I ate my dinner at the dinner table”
I tell my kids all the time to quit trying to get props for stuff they’re supposed to do.
United is trying to get props for stuff they’re supposed to do (or not do)!!!
In an effort to soften the blow of the bad news, they included some “positive” changes. Don’t fall for it.
So, here’s the “good news” about the future of United miles:
From the email: “We’re removing the close-in fee for award travel booked on or after November 15. That means you’ll no longer be charged the extra fee of up to $75 for booking award flights within 21 days of departure.”
United is eliminating the close-in booking fee on award tickets. This is a ridiculous fee and you can get around it by booking the same flight with a different airline program. For example, Singapore Airlines doesn’t charge a close in fee. You can transfer Chase or Amex points to Singapore Airlines. Singapore Airlines is in the Star Alliance, so most “saver” United flights or partner availability found on United should also be bookable with Singapore Airlines miles. So this change doesn’t impress me.
Another piece of good news that wasn’t included in the email, but is evident from multiple recent data points:
Miles earned on revenue flights are being credited immediately after the flight. Cool. Welcome to 2019.
In my book, these are things that United should have already been doing, but they certainly aren’t negative changes.
Here’s the bad news:
United is eliminating award charts.
This change is going to have a major impact on those who collect United miles.
From the email: “For flights on or after November 15, 2019, we’ll no longer publish an award chart listing the set amount of miles needed for each flight.”
This isn’t your typical devaluation where an airline eliminates one award chart and replaces it with another (usually with higher redemption prices). They are actually eliminating award charts altogether. United didn’t use the terminology “dynamic pricing”, but that’s exactly what this is. Delta did the same thing 4 years ago.
What is dynamic pricing?
A pain, for the most part. I’ll let United’s email do some explaining, and then I’ll give an interpretation:
“Air awards to U.S. and Canadian destinations that are 10,000 to 12,500 miles today may be available for less moving forward. You might have already noticed these lower award prices, and you’ll be able to get them right away.”
“Other air award prices may be higher than what you see today, especially if you’re traveling at popular times. This will be effective immediately for travel on or after November 15.”
“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. However, we realize this may impact your plans if you need to fly on a specific date or have a set destination in mind.”
Why is dynamic pricing a bad thing?
The other 3 types of award pricing are somewhat predictable. At least for “saver” level tickets.
- For a zone-based program, you just refer to the award chart and you can find the exact amount of miles a saver ticket should cost from any given zone to another.
- If you’re booking with a distance based program, you can figure out exactly how many miles you need by calculating the distance of your flight.
- Fare based programs such as JetBlue and Southwest don’t seem to have an exact formula that determines how many points are needed, but generally the points required correlates to the paid fare.
Dynamic pricing makes it tough to plan for future redemptions
Dynamic pricing is frustrating because unlike the other 3 types of award ticket pricing, it is nearly impossible to predict how many miles you may need for any given award flight.
It is generally assumed that with dynamic pricing, the paid fare has at least some weight on how the award ticket is going to price, but there are plenty of other factors. Demand, which influences paid fares, will also play a role. United even stated in the email that award travel during popular times may come at a higher redemption cost.
When Delta first switched to this type of pricing 4 years ago, it was fairly easy to get an idea of their “saver” redemption prices even though they weren’t published in an award chart. You could run a few searches to get an idea of the lowest possible cost between any two regions/zones. But more recently, that has changed and now I find it difficult to establish any sort of pattern as to how award tickets are priced on Delta.
When people ask me how to get the best deals on award tickets with Delta Skymiles, I just tell them to run the search for their destination and date and if it’s a good deal, book it ASAP. I’ve seen redemption prices multiply overnight on Delta. But I’ve also seen redemption prices drop overnight.
As stated in the email, you may end up seeing lower redemption prices on United for some routes, but I wouldn’t expect that on the regular.
With Delta, I’ve seen insane prices that I’d never consider like 100k one way to Europe in economy. But then I’ve seen Delta award flights to Europe for less than 40k roundtrip. 40k roundtrip is lower than when Delta had an award chart, so this is an improvement. The problem is, these deals are generally the exception rather than the norm.
United’s new award ticket prices are effective immediately if travel is on or after November 15
If you book a saver ticket between the US and Europe for November 5-14, the current saver award ticket price of 60,000 miles roundtrip applies. But if you’re looking to travel on November 16, the current saver award ticket price of 60,000 miles (30,000 each way) does not apply. Even if the ticket is classified as a saver ticket, there is no guarantee that the miles required will remain at 30,000 each way.
For what it’s worth, I’ve run a few searches for post-November 15 dates, and so far I am not seeing any changes in redemption cost for US-Europe tickets. I found plenty of dates and European destinations from the US that are pricing at 60,000 United miles roundtrip. This could definitely change, though.
The good news about United is that there are no immediate plans to eliminate partner award charts
This means that if you want to fly on an award ticket booked with United miles but operated by a partner airline such as ANA, you will still be able to refer to an award chart for redemption cost. As always, this is subject to availability.
For example, a flight from the US to Japan operated by ANA will require 35,000 United miles each way in economy. If you’re booking with United miles, that redemption price will not change since it is operated by a partner airline, but there is no guarantee that a partner award seat will be available.
Speaking of availability, it will be interesting to see how much “saver” award space United releases when these changes begin.
United generally has decent saver award availability (on United metal)
With the current United award chart, we know that an award flight between the US and Japan that is operated by United is either going to cost 35,000 miles or 80,000 miles each way in economy. 35,000 is the saver level price. 80,000 miles would be the amount required for an everyday award. On this blog when I discuss redemption costs, I am referring to saver tickets.
When saver tickets aren’t available, you can usually book an everyday award (these are the equivalent of AAnytime awards on American Airlines), but it’s going to require ALOT more miles. Currently, everyday awards for one-way between the US and Japan are capped at 80,000 United miles each way. This could definitely change in November. In other words, some flights might require even more than 80,000 miles each way.
Even though you can (and presumably will still be able to) book an award ticket on almost any United flight you want, it isn’t always going to be a good value for your miles. In other words, you only want to use miles when you can find saver availability. Everyday awards are almost never a good value for your miles.
I’ve discussed the difference between saver and everyday awards before in a post about American Airlines. With United, the same basic principles apply (at least until November), so read this post if you have no idea what I’m talking about.
My biggest concern about this is the amount of award space that will be bookable with United partners
I don’t redeem United miles very often. There are a few reasons for this, but the main reasons are
- We live near DFW so American Airlines operated flights are more convenient
- I’ve used Star Alliance partners to book many of the United-operated award flights that we have flown. This is mainly due to the fact that partners had better redemption prices for the exact same flights. Why transfer 30,000 Chase Ultimate Rewards points to United when I can book that exact same United flight for 25,000 Chase Ultimate Rewards points transferred to Singapore Airlines?
My experience with United is that saver availability is decent, especially compared to American Airlines. Saver availability is important because those are generally the only seats released to partners*. I’m really anxious to see is if saver availability stays the same and how many seats are available when using partner miles to book United flights.
*Note that unlike American Airlines, not all United saver tickets are made available to partners. American Airlines milesAAver tickets are almost always made available to partners. This means that if you find a milesAAver ticket on AA.com, you should be able to book that ticket with the miles of one of AA’s partners such as British Airways. United releases more saver availability to its own members than to partner airlines. This means that not all saver tickets are made available to partners (but most are, especially if you’re signed out of your Mileage Plus account when you’re searching).
To be clear, United probably won’t refer to saver tickets as saver tickets after November 15. Delta doesn’t distinguish between a saver and non-saver ticket. When I say saver ticket with reference to United’s new pricing, I really just mean the lowest possible cost from Zone A to Zone B.
The solution: diversify your miles and points
I have always discouraged collecting only one type of airline miles, but United’s (and potentiallly American Airlines) award travel changes are even more of a reason to give yourself more options. You can diversify your miles and points simply by using credit cards that earn transferable points like Amex Membership Rewards or Chase Ultimate Rewards.
If you only use a United co-branded credit card, you are only earning United miles*. But if you use a Chase Sapphire Preferred (or Reserve), you earn Chase Ultimate Rewards points. Chase Ultimate Rewards has 9 airline transfer partners, including United. You can transfer your Ultimate Rewards points to United at a 1:1 ratio if United ends up giving you the best redemption price for an award ticket. But if a partner airline, such as Singapore Airlines (which is also a transfer partner of Ultimate Rewards), has better pricing, you can transfer UR to to Singapore Airlines and use them to book the exact same United ticket.
*United and other airline co-branded cards are great for sign-up bonuses IF you’ve already opened an Ultimate Rewards earning card and the other 5/24 cards you want. The United card is a Chase 5/24 card, so it still remains on my list of cards that beginners should open while under 5/24. Airline co-branded cards that are issued by other banks, such as American Airlines cards, can wait. If you dont know what the 5/24 rule is, read this post before applying for any cards.
Dont forget about indirect transfer partners
You dont have to use United miles to book United flights. The miles of any airline in the Star Alliance can be used to book United flights. You dont have to use American Airlines miles to book American Airlines flights. You can use Oneworld alliance partners such as British Airways to book American Airlines flights. This is all subject to availability, of course. Also, don’t forget about non alliance partners. For example, you can use Etihad miles to book American Airlines flights.
Even if your transferable points don’t transfer to the airline you want, you may still be able to book a flight by using an indirect transfer partner. For example, neither Amex MR nor Chase UR transfer to American Airlines. But there are other partners that you can use to book American Airlines flights.
Devaluations are inevitable. While this isn’t a devaluation in the traditional form, the lack of an award chart is going to complicate things.
If you want to stretch your credit card miles and points, you need options. You can do this by collecting miles and points that transfer to multiple airlines. Any given airline program might give you a great value for one route, but then other routes might be a better value with other airlines.
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