The good news, I suppose, is that the holy grail of the 25,000 point domestic round trip ticket hasn’t been violated. At least not completely. United Airlines announced their 2014 award chart changes today (90 day in advance, which is also a good thing, though some changes are immediate) and most of the news is bad. In some cases very bad. The changes include new rates for awards and new rules for upgrades. Yes, there are a few areas where the charts get better, but the vast majority of the changes are going to be bad for must customers.
Travel Awards
The new chart includes different rates for travel on partners versus travel on United or Copa-operated flights. Not only does this even further increase the costs of some awards but it also makes figuring out the rates rather more challenging. I also find it a bit sad when looking at the ratio of red to green on the charts to note that much of the green comes on UA-only awards in regions where the carrier has no operations. Backing that data out the changes become even less pleasant. Africa becomes spectacularly more expensive, especially in premium cabins and even more if you don’t take the United flight from Houston to Lagos, the carrier’s only route serving the continent. The overall largest rate change I can find is North America to Middle East on a partner in first class; that award jumps from 75k one way to a whopping 140k, an 87% increase. Hawaii to Europe in first class is up 78% on partners as well. I suppose that the only silver lining there is that most partners don’t make their first class inventory available to United (and it is getting worse, not better) so it is unlikely those awards would have been redeemable anyways, even with the much higher rates.
Travel between North America and Europe, a rather common market, stays the same in economy class, though that rate was raised last year so the lack of increase now isn’t all that tremendous. For business class the rate goes up to 57.5k on UA metal or 70k on partners, increases of 15% and 40%, respectively. Yes, Lufthansa typically has a lot of inventory available on a relatively mediocre product. But now that’s going to cost a lot more to fly on.
There are a couple parts of the chart where things are a bit better. Awards between Asia and Oceania/Australia/New Zealand are, for the most part, a better price now. In some cases the decreases are as high as 40%, though there aren’t many such sweet spots. Hong Kong to Cairns via Guam is down to 25k each way from 45k in business class on UA metal. Other destinations in Australia will require partner flights raising the cost to 30k
Finally, Alaska has become its own award region, with flights between Alaska and the Lower 48 or Canada now incurring a 5,000 mile surcharge, though that’s only called out in a footnote, not actually given its own section in the charts.
Upgrades
I didn’t look closely at the rate changes for the upgrade charts. Those are, generally speaking, a bad value to begin with so I rarely put a lot of effort into them. A quick glance didn’t reveal anything astonishing but I probably missed something with the numbers. Alas, that’s not the real issue. There are some significant rule changes for upgrades in “regional” international markets, however, which are universally negative. For flights to/from Northern South America (i.e. narrow-body service to the region) and within Asia MileagePlus Premier members will no longer be eligible for complimentary upgrades. This applies to both instant-upgrades for full fare tickets and the regular CPU process the week prior to departure. These routes will also no longer be eligible for upgrades with Regional Premier Upgrade (RPU) instruments. And, while Global Premier Upgrade (GPU) instruments are still valid these routes will have a minimum fare requirement (W or higher) in line with routes typically operated as BusinessFirst or GlobalFirst, despite these regional flights having the lower service levels and cabin configurations in most cases. Finally, bringing these routes in line with other GPU-only markets, Premier members are no longer exempt from the co-pay portion of the upgrades when flying in these markets. The changes to the upgrade rules are effective immediately, not in February 2014. That’s doubly bad news for customers in these markets.
Is the program gutted?
It is hard to call any cycle of changes a gutting of the loyalty program. Yes, changes generally sucks and this cycle seems particularly bad given that it affects many routes, adds complexity to the program and, in the case of the upgrades, changes the rules in a manner which is not particularly commensurate with the level of service offered on the routes. In all of those ways these changes are bad. Combined with the less publicized (and still unconfirmed, despite several requests to various sources) changes to the unpublished rules in the program and things are certainly looking worse and worse for fans of the MileagePlus program.
This may not be a total gutting of the program but it is a significant devaluation of both points and elite status. Ouch, indeed.
The full chart I created showing the comparison of the old and new data can be found here.
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Did you try from the blog itself or an RSS reader?
As an HNL resident, just when i thought it couldn’t get any worse, you inform us that the ex-Guam flights are no longer CPU eligible when often they were not even full up front even after the CPUs were applied. The hits just keep on coming. Good lord i hope the US-AA takeover fails.
So what is your plan for next year? Still going for 1k, plat, or another program?
Is there any value in loyalty anymore? Your thoughts on hotel loyalty really are starting to apply to the airlines too.. If I can fly to Dublin, Istanbul or Milan for $500 or to Asia for $750 why am I jumping through hoops to deal with these programs? Once I am there I can fly where I want for cheap.. I have a company and earn a ton of points easily so I will still play the game. But it is making less sense for all but the ff mile junkies to play…
Might want to put a note somewhere that to get the download, you have to already be on the Wandering Aramean blog (or something).
I use Digg’s RSS reader and clicking through the link to the Excel sheet left me with a big, fat 404 error. I suspect it’s to do with using ASP, but I don’t know anything about it.
Seth, I think you’re one of the most level-headed of the travel bloggers, and I’m glad your post did not degenerate into the self-serving indignation displayed on many other blogs.
There’s no doubt that this is a massive devaluation of UA’s mileage program with respect to premium class travel on partner airlines. But the truth is that such awards were tremendously under-priced before, and now has been aligned with their true market worth.
Do a quick Google search and you will find countless bloggers and online commentators advise maximizers to always redeem miles for premium class travel, as that’s where one get the most bang for the buck. And further, they will admonish you to avoid United’s substandard business and first class at all costs and instead book on partner airlines. Now these same people now profess shock and disbelief that the price of premium class travel on partner airlines has been increased to meet its demand.
If award pricing was set correctly for the various categories of travel, travelers would be indifferent between redeeming their miles for economy travel on United or first class on Lufthansa.
The idea that somehow because an item has been historically mis-priced means that we are entitled to buy it forever at the low price is preposterous. If anything, we should be happy that we were able to get in on such a good deal for so long.
Mis-priced? Compare with what–Delta or Emirates? In my opinion, the strength of MileagePlus WAS that first class awards were reasonably priced, and that it was NOT impossible, albeit hard enough, to find them on partners with superior product. Calling a 140,000-mile award ticket to Asia “mis-priced” is a MIS-statement, to say the least.
I think you are giving too much credit to bloggers…the everyday person does NOT even know about FF blogs. This is an example of the death of alliances, and what happens when compeition doesn’t exist. Surely a devaluation was warrented, but UA doesn’t see ANY way its customers are going to fight back at this point. DL miles are more worthless, AA is a crapshoot, and US is…well, who knows. I just wonder if something like this will wake up a lawmaker about ‘currency’ manipulation. If tons of people were counting on their once in a lifetime trip to * via their credit cards, something like this will make them wake up and complain.
Please tell me you are kidding about currency manipulation. Not only does United own any MP points you may have in your account, they didn’t even change the currency, they just increased prices, like thousands of stores do every single day.
I wonder if social media blowback even enters their thoughts when they make these changes. This may hurt UA in ’14 their miles are worth less than Sky Pesos for some destinations at times in ’14.
The vast majority of people use their miles for domestic awards. I’d be shocked if these changes impact more than 5% of the customers out there. And many of those that it does impact are probably not even making money for United.
And to add insult to injury, UA is making US-based members spend a certain minimum amount to keep elite status…which is meaning less and less these days. I can see another wave of migrations to A3!
Seth,
you are being too nice to UA/ your old CO folks.
UA HAS GUTTED their program, much like Aeroplan did a while ago and BA as well.
I never thought that UA miles would be worth less than DL but in some instances that is coming close
AA is now the best option to India / Asia even with their arcane rules on regions.
Waiting for Aeroplan to follow suit. They followed United co-pay. Sure this is the next step. FF programs show 2014 to be dreadful.
@joelfreak said “the everyday person does NOT even know about FF blogs”
The everyday person is not redeeming miles for first class travel on LH, nor is she crying about the end of the world at the devaluation.
@Steve L But I know ALOT of teachers, mothers, etc that were banking on their FF mileage to take them somewhere, and now thats shot to hell. MANY of them were looking for at LEAST J, if not F.
J has only gone up 50% so the teachers may be fine.
But those of us spoilt by J and F can no longer go in F on partners.
I have always thought of miles as 2 cpm due to opportunity cost of cc spend. Once they price miles at 1 cpm redemption ultimately, cash back is the way to go. This raises the prices on awards to be closer to the cash cost of buying J, with lower availability.
Steve L is right about mispricing and market worth. But that is an important tool for loyalty. In the past when you could get UA miles mainly by flying, and max 60k miles a year from CC, then the miles were a long term reward for flying. The bankruptcies changed that in the 2000-2010 era.
Now that the miles are just a rebate from CC companies, the driver has been the alliances and ease of travel in comfort. UA may not know how many flew UA just for its partners awards. I certainly did. Now I have to reevaluate the need for loyalty to UA (much as we have with DL)
On the whole the “high value flyers” may not have much of a choice. Most of last minute business travel is done by biz flyers and they do not have much of a choice with fares in hubs anyway.
And you are coming close to the mark on “Status”.
It will not be worthless, but certainly worth a bit less on airlines as well.
United’s Newest Customer Unfriendly Campaign: Increase the Cost of Award Tickets,raising the mileage redemption levels for some awards over 60%. We don’t have to take this sitting down!
-Retweet my Tweet here and send your own tweets to @United with the hashtag: #UnitedUnfriendly
The more you post the quicker mainstream media will pick up on this story. Let’s get it trending!
-Express your displeasure to Chase (Twitter: @Chase, @Chase Support) about these changes. Chase buys billions of dollars of United miles and isn’t likely to be happy that they’ve been devalued. They’re especially not going to be happy to lose customers to cards like the Starwood AMEX. If anyone has the power to put pressure on United it’s Chase.
-Contact United CEO Jeff Smisek and let him know how these changes will affect your travel patterns and credit card spending. He can be reached at jeff.smisek@united.com
-If you feel that an 87% increase is just flat-out unfair you can also file a complaint with the US DOT. Sure United is free to do what they want, but this devaluation simply doesn’t happen if Continental and United were still competing. Delta and Northwest miles have gone from being worthwhile to being worthless thanks to their merger. Let the DOT know that you feel an 87% increase in the cost of some awards is unfair to consumers and that you want to see the DOT keep fighting the American-USAirways merger in court. If that merger goes through you can be sure we’ll be seeing more painful changes like this one. To Europe
Business class increases by 7,500 miles to 57,500 miles each way on United flights and by 12,500 miles to 80,000 miles each way in First Class.
Business class increases by 20,000 miles to 70,000 miles each way on Star Alliance flights and by 42,500 miles to 110,000 miles each way in First Class.
This is clearly designed to get you to stop redeeming for First Class awards on partner airlines!
4. To India
Coach award increase by 2,500 miles to 42,500 miles on United flights. Business class increases by 10,000 miles to 70,000 miles aeach way on United flights and by 10,000 miles to 90,000 miles each way in First Class.
Coach award increase by 2,500 miles to 42,500 miles on Star Alliance partners such as Lufthansa etc. Business class increases by 20,000 miles to 80,000 miles each way on Star Alliance partner flights
And increases by 60,000 miles to 140,000 miles each way in First Class. It used to be 160,000 miles for a round-trip!
This is clearly designed to get you to stop redeeming for First Class awards on partner airlines!
5. To South Asia (Thailand, Singapore etc.)
Coach award increase by 7,500 miles to 40,000 miles on United flights. Business class increases by 10,000 miles to 70,000 miles each way on United flights and by 10,000 miles to 90,000 miles each way in First Class.
Coach award increase by 7,500 miles to 40,000 miles each way on Star Alliance partners such as Lufthansa, etc. Business class increases by 20,000 miles to 80,000 miles each way on Star Alliance partner flights.
And First Class increases by 60,000 miles to 130,000 miles each way. This is clearly designed to get you to stop redeeming for First Class awards on partner airlines!
6. To Australia or New Zealand
No change to coach awards (40,000 miles) on United flights. Business class increases by 2,500 miles to 70,000 miles each way on United flights and remains the same in First Class.
Coach awards remain the same (40,000 miles) each way on Star Alliance partners such as Lufthansa, etc. Business class increases by 12,500 miles to 80,000 miles each way on Star Alliance partner flights.
And First Class increases by 50,000 miles to 130,000 miles each way. This is clearly designed to get you to stop redeeming for First Class awards on partner airlines!
7. To Japan
Coach award increase by 2,500 miles to 35,000 miles on United flights. Business class increases by 5,000 miles to 65,000 miles each way on United flights and increases by 12,500 miles to 80,000 miles each way in First Class.
Coach award increase by 2,500 miles to 35,000 miles each way on Star Alliance partners such as Lufthansa, etc. Business class increases by 15,000 miles to 75,000 miles each way on Star Alliance partner flights.
And First Class increases by 42,500 miles to 110,000 miles each way. This is clearly designed to get you to stop redeeming for First Class awards on partner airlines!
Filing a DoT complaint about this is about as asinine as you can get. They haven’t broken any rules or laws. Save the federal enforcement arm for things they can actually help consumers with. Wasting their time on things like this hurts us all in the end.
Seth, can you explain why you are sure they haven’t broken any laws? Many anti-trust laws are factor-based and seem unpredictable (and there is of course the logical hurdle in proving a negative).
The ink has barely dried on the United-Continental merger, and prices in some instances have increased over 80%, as you’ve noted above. It seems doubtful that any law was broken, but personally I’m not certain. Few including myself predicted the DoJ’s reaction to the AA/USA merger.
Whether or not a frequent flyer program is gutted depends upon why you (in the general not a pejorative sense) are flying that airline. Sure more perks for less EQM/PQM is better. But where is there a better alternative? And if there is a better alternative why are you not already there?
Awards are still a good deal. Not as good, not the best; but still a good deal.
If you buy first or business on three class flights out of your own pocket, upgrades for miles and dollars are a good deal. If your never going to pay more than 15 CPM for any flight than it isn’t.
A mis-priced item can only continue to be mis-priced if few people buy it. Once it becomes sold and bought in large quantities, the sellers will no longer tolerate the hit to their bottom line, and market forces will bring the prices back in line.
The cliche that “bloggers have killed all the great deals” is true in a generalized sense. The internet has been the great equalizer. It has made prices transparent and good deals accessible to everyone. Everyone is able to research the biggest bang for their buck. But it has greatly reduced the chance that anyone can get in a true steal, since anything that’s an unbelievable bargain is quickly and widely posted, tweeted or blogged about, ending in a quick demise.
I’m sad as anyone about the disappearance of the business/first class gravy train, where for 135,000 miles I can scarf down caviar in a flat bed next to some sop who paid $10,000 for the same seat. But I’m taken aback at people who think enjoying such extravagances cheaply is their entitlement, as opposed to a luxury that they had found for a steal.
So Seth, what are the immediate changes? I’m noticing some funky language coming back around even simple 4 segment trips from Europe to SE Asia
How would an award where the US portion was on UA metal (LAX-ORD) connecting to an LH flight to FRA be priced?
> How would an award where the US portion was on UA metal (LAX-ORD) connecting to an LH flight to FRA be priced?
Costs the partner price, assuming the LH flight is in the same or higher class than your UA flight.
Seth,
There is a rumor over on Flyertalk that UA will be forcing a co-pay starting in January to use GPUs.
Do you know anything about this?
Thanks!
I haven’t heard anything about that yet. It it is a co-pay but eligible on the cheapest fares that might not be so bad. In many cases I’d be much happier buying the lower fare and then only paying the up-charge if the upgrade clears. If it is a co-pay event on W/U/V/Q/M fares (I’m assuming Y/B would be exempt) then that would be pretty bad.
We’ll see what happens. I know I only have GPUs for 14 more months so personally I’m not quite as worried.