United Airlines Award/Premier Accelerator Rates [2014]
#301
Moderator: United Airlines
Join Date: Jun 2007
Location: SFO
Programs: UA Plat 1.997MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 66,859
This award accelerator is a huge bait and switch. I have an award flight coming up on Monday and it keeps offering me the opportunity to buy accelerator miles (RDM's) for as low as $86. I click on it and it says $86 for 4500 miles. It says on that page that you must enter you MP # to take advantage of this. As soon as I do it jumps to over $250 for 12,000 miles with no way to get the lower amount of miles. Yes it is the same cents per mile but why do they offer the lower number of miles, then insist you put your FF # in then only offer many more miles with no opportunity for the lesser number of miles?
#302
Join Date: Jul 2012
Location: Chicago
Posts: 1,162
Jeff is on vendetta to weasel $ out of elites since they're 'overentitled.' Back in the day when CO was only game in town in 2 and a half markets, FFs might have felt captive. Not now...
#303
FlyerTalk Evangelist
Join Date: Jul 1999
Location: Ewa Beach, Hawaii
Posts: 10,909
I never click on these but wanted to put a few miles into wifes account to keep from expiring. I'll use one of the many other methods in the other thread. For this instance hard to make a shorter itinerary SFO-KOA (yes, I know can make any itinerary, get the RDM's, then cancel) but thought this would be any easy way to put a few miles in her account for less than $90. If they won't give you that option, why even offer it for the itinerary they are giving the offer on?
#304
Join Date: Sep 2012
Location: MDE
Programs: AA EP, CM PP, AV GM, UA Silver, SPG Gold, Hilton Diamond, Hyatt Plat, Marriott Plat, Accor Plat
Posts: 1,002
This award accelerator is a huge bait and switch. I have an award flight coming up on Monday and it keeps offering me the opportunity to buy accelerator miles (RDM's) for as low as $86. I click on it and it says $86 for 4500 miles. It says on that page that you must enter you MP # to take advantage of this. As soon as I do it jumps to over $250 for 12,000 miles with no way to get the lower amount of miles. Yes it is the same cents per mile but why do they offer the lower number of miles, then insist you put your FF # in then only offer many more miles with no opportunity for the lesser number of miles?
In my case, they may not realize that their plan backfired. Because I always fly between Costa Rica and Colombia on award tickets, I would often buy the accelerators for those small number of miles as a small offset to using awards where I was not earning miles. Not since the change, however.
I did break my own "No Accelerator PQM" rule this year, however, when a UA error cost me over 7,000 PQMs, then an extra long travel break to facilitate a move cut back my travel. I snagged 14,000 of them at $0.08/ea (still no bargain) when I realized that I would likely not have time for the MRs required to make them up.
As it turns out, I currently have enough travel booked to qualify for 1K again on 10/29, at which point I have started buying premium cabin tickets on AA, where I plan to take them up on their status match. I wanted one last year of 1K for my Copa flights and award redemptions next year, but after that I'm finished with UA's RJ-mania. That is the main (although not the only) thing that finally drove me away this year.
#305
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,341
If your understanding of the demographics/motivations of mileage sales are correct;
If changes in capacity / award space don't change the the picture;
If changes made by other carriers don't change the picture;
If the arrangements with Chase for mileage sales are not changed;
......
Or in summary, we (individual customers) understand so little of the economics of mileage sales, that we are bit hapless at applying the "basic laws of economics" {which are actually quite complex in application}.
If changes in capacity / award space don't change the the picture;
If changes made by other carriers don't change the picture;
If the arrangements with Chase for mileage sales are not changed;
......
Or in summary, we (individual customers) understand so little of the economics of mileage sales, that we are bit hapless at applying the "basic laws of economics" {which are actually quite complex in application}.
Ceteris paribus of course..., but are you aware of any changes that are going to impact this, e.g. do you think Chase called up UA after the deval and said, "We'd like to pay more for the miles we're buying," do you think there was an uptick in in paid GF sales because customers like cashew halves better than wholes? Last time I checked you raise prices when demand is going up...not when it's going down.
Ooops
RNE, WineCountry, where are you guys?
#306
Suspended
Join Date: Oct 2004
Location: Bay Area
Programs: DL SM, UA MP.
Posts: 12,729
Of course it dropped below 2.1 cpm.
Because I bought some at 2.1cpm at the end of June.
Because I bought some at 2.1cpm at the end of June.
#309
Moderator: United Airlines
Join Date: Jun 2007
Location: SFO
Programs: UA Plat 1.997MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 66,859
Never made a prediction myself, just said there was insufficient visibility to make a reasonable prediction.
A victory lap for a 5% decrease off the previous low might be a bit over the top but each to their own. At 5% off the previous low or 10% off recent values, still got a ways to get to the devaluation factors of 20%-30%-40%-50+%, ... -- still looks like UA moved the goal posts.
#310
Original Poster
Join Date: Sep 2005
Location: JZRO
Posts: 9,169
I'm a prognosticator. You're an authority. People benefit from your advice and from mine. And we ask for nothing in return. Selfless savants, both.
RNE, not predicting rightly all the time but rightly predicting all the time.
RNE, not predicting rightly all the time but rightly predicting all the time.
#311
Join Date: Jun 2007
Location: SRQ, PDX
Programs: UA 1 MM, AA, DL
Posts: 930
That being said, I bought a P class ticket yesterday to TPE and was offered 40000 miles for USD760. I don't usually buy miles...but as one of your "students," may I ask if this a deal?
#312
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,341
RNE, WineCountry... sorry about the last post, but I couldn't resist.
Any prognostications on where rates are going from here?
Any prognostications on where rates are going from here?
#313
Join Date: Jun 2007
Location: SRQ, PDX
Programs: UA 1 MM, AA, DL
Posts: 930
That's really what I meant to ask. Is this latest offer (1.9 CPM) as good as it gets/may get?
Last edited by artvandalay; Aug 18, 2014 at 2:16 am
#314
Original Poster
Join Date: Sep 2005
Location: JZRO
Posts: 9,169
No sympathy is necessary for WineCountryUA or me. We are big boys and both experts in our fields. And he is not at fault here anyway; I am.
Quite frankly, I'm still amazed it dipped below 2.1¢. My recommendation to buy at that price was—I thought—pretty solid. Indeed, I suspect the silent majority agreed with my assessment. Lo and behold, the price dropped! Not by a lot, but still it was significant. Obviously, those who bought at 2.1¢ could have done better by waiting. But, it's not like anyone is now eating dinner out of a dog food can because they spent 2 tenths of a cent too much for a PQM. Two point one cents was a good price, even if not the best price.
My recommendation remains to buy now—if you're going to buy soon. At 1.9¢, the price is even less likely to go down.
Now, an aside. Arguably, the primary purpose of this thread is to help people decide Should I buy PQMs? Should I not? Should I buy at the current price? Should I not? Etcetera. However, I have long encouraged this thread to be more than predictions. Analysis is just as welcomed here. 5khours gets my admiration—something few of you simpletons can ever hope to receive—for not merely predicting a drop, but for explaining why he thought it would drop. I still think his analysis is wrong, but he gets kudos for having an analysis at all. ^ Learn from him.
Quite frankly, I'm still amazed it dipped below 2.1¢. My recommendation to buy at that price was—I thought—pretty solid. Indeed, I suspect the silent majority agreed with my assessment. Lo and behold, the price dropped! Not by a lot, but still it was significant. Obviously, those who bought at 2.1¢ could have done better by waiting. But, it's not like anyone is now eating dinner out of a dog food can because they spent 2 tenths of a cent too much for a PQM. Two point one cents was a good price, even if not the best price.
My recommendation remains to buy now—if you're going to buy soon. At 1.9¢, the price is even less likely to go down.
Now, an aside. Arguably, the primary purpose of this thread is to help people decide Should I buy PQMs? Should I not? Should I buy at the current price? Should I not? Etcetera. However, I have long encouraged this thread to be more than predictions. Analysis is just as welcomed here. 5khours gets my admiration—something few of you simpletons can ever hope to receive—for not merely predicting a drop, but for explaining why he thought it would drop. I still think his analysis is wrong, but he gets kudos for having an analysis at all. ^ Learn from him.
#315
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,341
So I still think it has room to go down a bit more basically for the same reasons I cited before, but I'll temper that a little bit because I think management at UA (and a lot of companies) are reluctant to admit their strategy is wrong and UA's strategy has basically been that cutting services and raising prices will generate more profits (which BTW is wrong IMHO).
But assuming that management were rationale and competent (big IF I know), then they should have had the price of accelerators optimized before the award devaluation. I also think the marginal demand for accelerator miles is driven not by the casual flyer who occasionally top ups to make a trip, but rather by more experienced travelers who look at the price pretty carefully and use them for non-essential premium travel (mostly international but some domestic).
So when the buyer is looking at whether miles are cheap or not, it's not so much whether they are cheap or not in comparison to past pricing, but rather it's a question of "Is it enough cheaper than a paid fare to either get me to take an extra trip or to assume the hassle and risk of buying miles"... or "How does this compare to buying AS miles." From this perspective I think the miles are still overpriced given the big increases in redemption rates and given the much higher redemption risk now that no one trusts Smisek & Co.
I've bought a lot of miles in the past, but at current rates I'm not a buyer.... maybe I'm an outlier but maybe I'm the canary in the coal mine. In any case, the way I look at it is:
I had predicted a 20 to 30% drop when miles were at 2.3cpm which implies somewhere in the 1.6 to 1.8 cpm range. I wouldn't bet money, but I think we might see a further dip to that range in the fall and then a blip up going into the end of year holidays. That said, I personally wouldn't pay much more than 1.4 cpm given the current redemption rates.
Finally, I would just say that I think the fundamental problem is that whereas UA used to have a very competitive international premium hard product, they are now falling behind the competition. The preponderance of mileage redemptions on partner flights was just the tip of the iceberg. UA is also going to have increasing difficulty selling paid tickets for international F and J as well (IMHO).
But assuming that management were rationale and competent (big IF I know), then they should have had the price of accelerators optimized before the award devaluation. I also think the marginal demand for accelerator miles is driven not by the casual flyer who occasionally top ups to make a trip, but rather by more experienced travelers who look at the price pretty carefully and use them for non-essential premium travel (mostly international but some domestic).
So when the buyer is looking at whether miles are cheap or not, it's not so much whether they are cheap or not in comparison to past pricing, but rather it's a question of "Is it enough cheaper than a paid fare to either get me to take an extra trip or to assume the hassle and risk of buying miles"... or "How does this compare to buying AS miles." From this perspective I think the miles are still overpriced given the big increases in redemption rates and given the much higher redemption risk now that no one trusts Smisek & Co.
I've bought a lot of miles in the past, but at current rates I'm not a buyer.... maybe I'm an outlier but maybe I'm the canary in the coal mine. In any case, the way I look at it is:
- For Y, buying miles is not really a savings.
- For UA GF, rates have not gone up much but the GF product has gotten so bad, it's not worth much of a premium and I'm more likely to buy W and UG or to buy J cheap on another carrier (e.g. summer sales or ex BKK) than I am to buy miles and redeem for GF.
- For partner F, redemption rates are now so high that if there weren't other options (e.g. AS miles) I would just travel less and use Skype more... or in some cases just buy paid F since it's cheaper than using miles.
- AS miles are a much better deal.
- I've got a lot of Amex points I can burn on other carriers
I had predicted a 20 to 30% drop when miles were at 2.3cpm which implies somewhere in the 1.6 to 1.8 cpm range. I wouldn't bet money, but I think we might see a further dip to that range in the fall and then a blip up going into the end of year holidays. That said, I personally wouldn't pay much more than 1.4 cpm given the current redemption rates.
Finally, I would just say that I think the fundamental problem is that whereas UA used to have a very competitive international premium hard product, they are now falling behind the competition. The preponderance of mileage redemptions on partner flights was just the tip of the iceberg. UA is also going to have increasing difficulty selling paid tickets for international F and J as well (IMHO).