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Fly The Unfriendly Skies of United: Massive Devaluation of Award Chart

Another Friday, another devaluation at United Airlines. United posted an updated award chart today and it is not pretty. Targeting primarily premium cabins on partner airlines, mileage required will rise by as much as 87% over current levels! The new chart takes effect on February 14, 2014 and transforms the MileagePlus program from the most lucrative airline loyalty program in the world to one that now will require careful evaluation before future crediting. This is truly bad news--there are no bright spots.

I will provide much more detailed analysis later today, but for now keep this in mind--

1. Partner Awards will now be separated from United Awards. United is part of the Star Alliance, with 28 member airlines from around the world. Currently you can redeem your miles on any Star Alliance flight (subject to availability of course) for the same number of miles as on a United flight. That will change in many instances under the new chart. United has to pay out an undisclosed amount for partner award flights and this move to disincentivize travel on partner carriers is draconian...consider that to fly Lufthansa to the Middle East in First Class it currently costs 150K miles r/t. On 01 Feb 2014, the same trip will cost 280K miles. Fly on United, though, and you'll "only" pay an extra 20K each way or 190K r/t. Say goodbye to Lufthansa First Class...

2. Still no fuel surcharges. Though we were spared fuel surcharges, in a way I would have preferred them to increasing the rates as dramatically as United has done. United accomplishes the same purpose by simply charging (a lot) more miles.

3. United Awards will not be unreasonable. If you are able to keep your award on United Airlines flights, there will still be good values to be found. The question is will United release more seats on their own metal going forward? I suspect not.

4. If you have United miles built up, it is time to start booking, but do not panic! While I look forward to the upsurge in business in helping all of you burn your United points, you do not have to panic and book today. Award space is dynamic and more flights will be added in the upcoming months before the devaluation. Better to properly plan and get the best use of your miles then to burn the miles in haste and end up with a less-desirable trip.

5. Chase United MileagePlus-branded credit cards becomes less valuable. With United miles about to be worth much less if you are seeking international premium cabins, I would re-evaluate the use of any MileagePlus branded cards. Far better to use a Chase Sapphire or INK card, which gives you more flexibility in transferring points.

*     *     *

The new North American chart is summarized below but also can be found here (compare to the old chart).

Between the US Lower 48 or Canada and:

Economy Class

Current 
(New United)
[New Partner]

 

Business

Current 
(New United)
[New Partner]
First

Current
(New United)
[New Partner]
US Lower 48, Canada

10K Short Haul
12.5K Long Haul
(No change)
[No change]

 

25K
(No change)
[No change]
35K
(No change)
[No change]
Alaska 12.5K
(+5K=17.5K)
[+5K=17.5K]
25K
(+5K=30K)
[+5K=30K]
35K
(+5K=40K)
[+5K=40K]
Hawaii 20K
(+2.5K=22.5K)
[+2.5K=22.5K]
40K
(No change)
[No change]
50K
(No change)
[No change]
Mexico, Caribbean, Central America 17.5K
(No change)
[No change]
30K
(No change)
[No change]
40K
(No change)
[No change]
Northern South America 20K
(No change)
[No change]
35K
(No change)
[No change]
45K
(No change)
[No change]
Southern South America 30K
(No change)
[No change]
50K
(+5K=55K)
[+5K=55K]
67.5K
(+2.5K=70K)
[+2.5K=70K]
Europe 30K
(No change)
[No change]
50K
(+7.5K=57.5K)
[+20K=70K]
67.5K
(+12.5K=80K)
[+42.5K=110K]
Middle East 40K
(+2.5K=42.5K)
[+2.5K=42.5K]
60K
(+10K=70K)
[+20K=80K]
75K
(+15K=90K)
[+65K=140K]
Africa 40K
(No change)
[No change]
60K
(+10K=70K)
[+20K=80K]
75K
(+10K=85K)
[+55K=130K]
North Asia 32.5K
(+2.5K=35K)
[+2.5K=35K]
60K
(+10K=70K)
[+20K=80K]
70K
(+10K=80K)
[+50K=120K]
Central Asia 40K
(+2.5K=42.5K)
[+2.5K=42.5K]
60K
(+10K=70K)
[+20K=80K]
80K
(+10K=90K)
[+60K=140K]
South Asia 32.5K
(+7.5K=40K)
[+7.5K=40K]
60K
(+10K=70K)
[+20K=80K]
70K
(+10K=80K)
[+60K=130K]
Japan 32.5K
(+2.5K=35K)
[+2.5K=35K]
60K
(+5K=65K)
[+15K=75K]
67.5K
(+12.5K=80K)
[+42.5K=110K]
Oceania 35K
(No change)
[No change]
60K
(+5K=65K)
[+15K=75K]
75K
(+5K=80K)
[+35K=110K]
Australia, New Zealand 40K
(No change)
[No change]
67.5K
(+2.5K=70K)
[+12.5K=80K]
80K
(No change)
[+50K=130K]
Round-The-World 180K
(+20K=200K)
[+20K=200K]
260K
(+90K=350K)
[+90K=350K]
350K
(+100K=450K)
[+100K=450K]

United claims the move was necessary. Spokesman Rahsaan Johnson stated, "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 Mileage Plus 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."

The latter statement present a false dichotomy, but the spin is no surprise. 

Stay tuned for more as this story develops.

Comments

#1
UA-NYC November 1, 2013 at 04:29 pm

Official spin translation: "we are too incompetent leadership-wise to improve the revenue side of things, so we're going to hack, hack, hack away at our costs"

#2
David B November 1, 2013 at 08:35 pm

Just echoes what AC/Aeroplan has been doing with premium awards (in two stages) over the past couple of years. Though that program also introduced killer fuel surcharges to most carrier awards too. This redemption devaluation, along with other elite tier benefit changes, were the reason I migrated my STAR earnings from AC/AE to UA/MP. At least I reside outside the US so I don't have the added indignity of needing to spend a certain amount to maintain my 1K! Suppose it will only be a matter of time before similar shocks come to my AA account.

#3
Mike S. November 2, 2013 at 12:47 pm

How much does UA have to pay LH for an F class redemption? A certain amount per mile ?

So with the devaluation, this:

SFO-FRA-NRT (LH F)

becomes a lot more expensive than:

SFO-NRT (UA F)

#4
greg November 2, 2013 at 02:06 pm

Matthew, how much blame do you put on bloggers and those who sell award booking services, such as yourself, for this devaluation? Do bloggers not contribute to the inflation of miles while profiting from that inflation? Your thoughts would be welcomed.

Greg, while I would love to be able to take credit for this deflation, the combined award bookings services of the dozen or so guys who do this is a drop in the bucket. A literal drop in the bucket.

The true culprit is the ease in which United.com has made it able to book premium award space across the Star Alliance network.

Burned all miles on biz class ATH-IST-ZRH-BOS-PHX-BOI with 1 day layovers in all of the stops :)

Had heck of a time booking it though, was told that I cant have more then 4 segments by several agents, until getting the one who did it right.

Thank you again for keeping me informed, you saved me 60k miles

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