What Have We Learned from United MileagePlus Devaluation?
Anya Kartashova April 12, 2019
Outfit of traveler with cup of coffee on wooden background, Vintage style
Winter has come and gone, and yet another loyalty program has swung the sword and cut its value.
United Airlines MileagePlus announced a huge devaluation coming Nov. 15. Of course, the news wasn’t framed as a devaluation but as a program simplification. The program will no longer publish award charts or stick to specific redemption levels. Instead, more seats will be available for booking awards, but they’ll come at a price—a price that can change at any moment. It’ll be hard to predict what any United-operated flight will cost in miles as that number will fluctuate based on demand.
Sounds familiar? It appears that MileagePlus has taken a page from the Delta SkyMiles book. Not to spoil the ending, but any time you search for an award flight on Delta.com, there’s hardly any low-level availability for award seats in the premium cabin. The sky is the limit for Delta business awards—and not in a good way.
The program runs occasional deals for economy flights to various travel regions, but you can easily book these inexpensive tickets in cash during a good fare war.
It appears that United is heading in the same direction. Just a few weeks ago, MileagePlus dropped the cost of its domestic awards to as few as 5,000 miles. Turns out the airline simply threw dust in our eyes to distract us from things to come—bad things. How long until dynamic pricing makes award flights cost thousands of miles? Apparently, seven months is all.
To make matters even worse, rumor has it that American Airlines will follow suit, according to God Save the Points.
Miles Aren’t an Investment
So, if anything, we have yet again learned the most important lesson of travel hacking. Airline miles aren’t an investment. Earning and burning is the best tactic you can practice to ensure preserving their value. In this case, United has given us notice of upcoming doom. In most cases, we can only hope for the same treatment. Miles can devalue overnight, in seven months or in five minutes. Don’t wait to find out how long it takes next time.
Be Flexible While Collecting Airline Miles
Although low-level awards will be hard to come by, they’ll still be there. To be successful in booking them, you might have to be flexible with your travel dates and act early. As soon as you see an award at a number of miles that you’re willing to redeem, don’t wait, click “book.” No doubt, the competition for these awards will increase, and you want to be all dressed up and ready to find somewhere to go when there’s availability.
Don’t Write Off Credit Cards Just Yet
It isn’t time to jump ship yet. Just because we’ve been witnessing devaluation after devaluation lately, don’t be afraid of collecting miles by applying for credit cards. It’s the fastest way to collect a chunk of miles and book an almost-free flight. Partner awards are still going to be available at the standard, fixed rates (for now), and you have plenty of options to use them for an affordable trip.
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Airlines are only "desperate" to fill empty seats when they can make some money off of it. If a passenger has already earned the miles to pay for the seat -- that is, already paid their cash to the airline -- the carrier's only reason for providing award space is because failure to do so will dissuade people from being loyal in the first place. It isn't as though there is a benefit to putting more people (that is, weight) on an aircraft. Meanwhile, the airlines have an incentive to ration "cheap" award space, even if a flight will go out half-empty, because they want to incentivize those customers who have already committed themselves to the loyalty program to continue to collect miles in order to afford an (available) reward. The problem is that it will take a while, at least, for even many business travelers to fully appreciate just how worthless their miles have become. That leaves an expectation gap, such that customers will continue booking on a certain carrier in the false believe that their miles will get them a valuable award ticket. The airlines, of course, promote this misconception by advertising increasingly scarce saver awards ("awards from just 5,000 miles!").
The points I made in my comment were apparently beyond the understanding of one reader, so I will use bullet points to clarify what I thought of the FT article; 1. Airlines are in biz to make money, the more the better. 2. They have always steered flyers into undersold flights, through lower prices or award miles 3. Some MP members will benefit 4. FT can't demonstrate that the change will be a "huge devaluation" yet, though experience may tell us devaluation is likely. How these points somehow give the airlines a "pass" on the changes is not clear to me, just a simple statement of motivations behind them as I see it. I guess I'm not venting enough anger for some even though I'm certainly not happy with most program changes.
BiPlane, which airline do you work for exactly?
My first flight on United was in 1965. Of course, back then before deregulation it was nice to fly. People got dressed up. Flight attendants, then called stewards and stewardesses, treated everyone well. Since deregulation, things have steadily declined into a cattle herding operation. In the past 20 years I have gone overseas more than 110 times, all using United and Star Alliance connections. Now my "investment" is virtually worthless. The comment about a three-airline oligopoly is quite to the point. Delta started it with the Atlanta hub structure. Out of that came pseudo-monopolies. With the consolidation of the majors and the obvious and overt collusion, added to the TSA hassle, is it really worth it anymore. Maybe I will just get a travel trailer and tour the US and Canada and forget about flying.
more evidence that frequent flyer programmes are dying a slow death, except for those people who actually fly a lot. Getting points/miles from credit cards is getting harder, fees for credit cards & frequent flyer tickets are getting higher & the world is heading into the biggest ever recession, where cash is king. Am constantly offer 15% to 20% off for cash, rather than using a credit card.