United award redemptions surprise

Doh! Why do I keep playing this frequent flyer game? (Photo: Striatic)

Doh! Why do I keep playing this frequent flyer game? (Photo: Striatic)

MileagePlus members experienced a rude awakening last Friday morning when United announced a significant increase in its “prices” for frequent flyer awards starting Feb. 1, 2014.

Airlines adjust their award charts every few years to take into account internal cost increases, so United’s move is not uncommon. However, the magnitude of some of the increases is cringe-worthy.

Let’s start with the positive. United did not touch the cost of an economy class award redemption in the U.S., which remains at 25,000 miles, and it continues to offer one-way award redemptions, unlike some other majors. Plus, for travel less than 700 miles, the cost of a United Airlines award will remain at 10,000 miles. Compared to other major carriers, United’s program is frequently lauded for ease of use and relatively easy redemptions.

Also, United is providing advance notice– if award travel is booked before Feb. 1, 2014 (no matter when you actually fly), you can still redeem at the current levels. This is nice for those making summer 2014 travel plans, and kudos to United for at least providing a 90-day notice. However, keep in mind that United will ding you for more miles if you make any modifications to your plans after the new award charts go into effect on Feb 1.

Now, for the bad news: First, there are now two award charts: one for awards redeemed solely on United and its Latin American partner Copa and one for Star Alliance and other airline partners. The United award chart saw some increases, but not as many or as severe as the bloodbath on the partner chart. This makes sense since United does not have to pay another airline for redemptions on its own metal; the only cost is the loss of a seat being sold on its own aircraft.

Only a handful of redemptions on the United award chart have increased in price. For example, economy awards between the U.S. and Hawaii increase from 40,000 to 45,000 miles; and business class awards on United between North America and Europe go from 100,000 to 115,000 miles. That’s not so bad considering Delta just upped the same redemption to Europe to 125,000 miles beginning June 2014. In fact, none of the United-only award chart increases are that tough to swallow since inflation is expected over the years.

A business class seat on United partner Aer Lingus' new flight starting in April will soon cost 140K miles (Photo:  Stephen White)

A business class seat on United partner Aer Lingus’ new SFO-Dublin flight starting in April will soon cost 140K miles (Photo: Stephen White)

The biggest hit is with partner redemptions in first and business class. Despite claims that Star Alliance is designed to make international travel easier and more pleasant for flyers, United has now done just the opposite dramatically increasing the mileage needed to fly to certain destinations on partners. Never mind that United may not fly there. If you want to go to a non-United destination, you’re soon going to have to part with major miles…

United explains: “We’re increasing miles required in these markets for the first time in several years to account for the increased cost of providing transportation, particularly in the premium cabin and particularly on the MileagePlus partner carriers…We faced a decision other airlines have faced — to either increase the number of miles required for partner awards or to eliminate them altogether.”

But this is not the only reason for the increase. With mileage earning opportunities coming out of our ears, it increasingly obvious that too many customers have too many miles, and this is hurting the precarious United balance sheet. Revisions to its partner award chart help United by reducing the amount of money it has to pay partner carriers for these easily-earned miles by its own customers.

Here are some of the hardest hit zones.

Here is a link to the current award chart. Here is a link to the new award chart.

>Flights to Europe on partners from North America in business class jump 40% from 100,000 miles roundtrip to 140,000 miles roundtrip. Want to go in first class? It used to be 135,000 miles. Now it is 220,000 miles! Luckily, economy class roundtrips remain the same at 60,000 miles roundtrip.

Lufthansa A380

First class redemptions on Lufthansa to Middle East or Africa? Some prices are up 87%! (Photo: Chris McGinnis)

>Flights to most of Africa on Star Alliance partners used to go for 120,000 miles in business class and 150,000 in first. Now, it’s 160,000 in business class and 260,000 in first class. Ouch.

>The biggest jump comes on flights from North America to the Middle East where roundtrips were 120,000 miles in business and 150,000 miles in first. Now, they cost 160,000 miles in business and 280,000 miles (up 87%!) in first if using Star Alliance partners. Partner redemptions to Asia and Australia saw similar painful increases.

While United did give us 90 days of notice, which is fair, the magnitude of the increase on many awards is certainly not. Customers are lashing out on Facebook and Twitter using the carrier’s recent “Flyer Friendly” advertising campaign against it. Search for the #FlyerUnfriendly hashtag on Twitter and you’ll see what we mean.

What do you think about United’s move? Will you have time to book your award travel before Feb. 1? Will you change your travel or airline loyalties in 2014? Or… are changes in redemptions somewhat irrelevant to you since you are more focused on status/recognition and upgrades than award trips? Please leave your comments below.

Chris McGinnis & Ramsey Qubein

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  • kwa829

    The “inflation” argument to justify increased mileage requirements is rather silly. If there is inflation, then presumably I would have paid more for each of the miles I flew. For example, suppose hypothetically that five years ago, flying 50,000 miles would have cost me $5,000 (10 cents per mile), and now, if there’s say, 20% inflation since five years ago, it costs me $6,000 (12 cents per mile). So the “inflation” is already factored in. If the mileage requirement for some type of ticket is raised from 50,000 to 60,000 miles, then in essence the “cost” of that ticket goes up from $5,000 five years ago to $7,200, which represents 44% inflation, not 20%.

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  • Ramsey Qubein

    Some people claim that Avianca/Taca and Aegean have interesting programs with good redemptions, but booking them is a pain since it requires calling them (not sure they have a 1-800 number for awards). In my opinion, it’s not worth the hassle. If you have US Airways miles, it only costs 90,000 roundtrip to North Asia, but book quickly as they will move out of Star Alliance very soon with the AA-US merger. It’s worth it for their super low price for miles on any STAR carrier with space…for now. –Ramsey

  • EDub

    So what are the other options as SFO flyers, we’re kind of stuck with United for a lot of travel since they cover most routes. I wonder if there’s a different Star Alliance carrier that has more generous reward/earning options I should switch to.

    Guess it’s time to book those trips to Asia now though…

  • petermjensen

    So the reason is increased costs / inflation? I have a feeling the actual prices of the tickets are going up as well, ie we’re paying more for the tickets. THe cost of their frequent flier program is a function (a percentage) of their overall revenue, and as long as they increase prices to compensate for the higher prices, they shouldn’t have to devalue the value of the miles. The real reason is to reduce their balance sheet.

  • Jim

    Gosh, as long as they are leaving the upgrade award chart alone… We all recall the painful increase a couple of yrs back… We all used to be able to upgrade an Intl B fate for 25K round trip! It’s now between 40-60K depending on where you go, :(

  • Mike Lee

    This definitely sucks… since UA has a major hub in SFO. I’ll earn miles from the credit card, online shopping mall, but otherwise I’m beginning to fly international carriers. The value of miles have gone down quite a lot, and I really have no loyalty to one airline anymore.