May 1, 2021, 4:06 pm
Last edit by: WineCountryUA
This is an archive thread, the active thread is "Dynamic Award Pricing" by UA; questions, experiences, .... {Archive}
The details:
Award travel updates
Introducing a broader range of award prices
Updates to award travel are on the horizon. For flights on or after November 15, 2019, we’ll no longer publish an award chart listing the set amount of miles needed for each flight.The details:
- Some award prices will be lower than what’s currently published in our chart. You may have already seen these prices, and you’ll be able to get them immediately.
- Other award prices may be higher than what you see today, especially if you’re traveling at a popular time. These prices will take effect immediately for travel November 15 or after.
- Starting November 15, we’re removing close-in fees, so you won’t be charged the extra fee of up to $75 for booking last-minute award travel.
- A flexible award travel calendar is available on united.com or in our app.
Frequently Asked Questions
What is changing?
For travel on or after November 15, we will no longer publish an award chart listing the set amount of miles needed for award flights. Award pricing will now fluctuate based on a variety of factors, including demand. Additionally, starting November 15, we will no longer charge a fee of up to $75 for award flights booked within 21 days of departure.When will these updates take effect?
The award pricing changes apply immediately to flights on or after November 15, 2019. Until then, award prices will be the same as or lower than what’s currently published in our award chart.How many miles will I need for award travel after November 15?
Award prices will now fluctuate based on a variety of factors. Some air awards will be available for less than what’s listed in our chart, which you may have already noticed. After November 15, award prices may also be higher, especially if you’re traveling at popular times. Use our flexible award calendar to get a monthly view of the award prices for a specific destination.Why are you making these changes?
Increasing award prices for the most in-demand flights allows us to offer better returns for our shareholders. If your award travel is flexible, these updates will help you make the most of your miles.How will these updates affect award travel availability?
United MileagePlus members with Premier® status and qualifying United Chase Cardmembers can continue to book award travel without blackout dates. For other members, most award flights that are available today will continue to be available after these updates take effect.Do the lowest-priced awards have any extra flight restrictions?
No. Our lowest priced awards do not have any added restrictions; the fare rules for all award travel apply.How can I find the lowest priced award for my travel?
The award calendar on united.com or in our app will continue to show the lowest available price for your destination.Will I earn miles on my flight if I book an award?
No. As with current award bookings, award travel in the future will not be eligible to earn miles with MileagePlus or any other loyalty program.What if I need to change my existing award?
If you need to change your award ticket, you will be issued a new ticket for which new pricing and additional fees may apply.What if I purchase a close-in award before November 15
The close-in booking fee will still apply to all tickets booked within 21 days of departure prior to November 15, 2019. We will not refund fees paid prior to November 15, even if travel occurs on or after November 15.
"Dynamic Award Pricing" by UA; questions, experiences, .... {Archive}
Apr 6, 2019, 2:31 am
#616
Join Date: Apr 1999
Location: Montréal, Canada
Posts: 1,610
That will not realistically occur. There are simply too many airlines operating in the US. Remember, the consolidation did not occur as hostile takeovers. They occurred because weak and/or faltering airlines were avoiding insolvency. CO, for example, partnered with AC and NW before the merger with UA.
Apr 6, 2019, 2:31 am
#617
FlyerTalk Evangelist
Join Date: Oct 2001
Location: Austin, TX
Posts: 21,413
I don't like these changes either, but I have no reason to believe that lack of competition is the problem. It's not like there are too few flights; traffic Is through the roof, and we're seeing delays in NYC/SFO/LAX/etc. due to clogged airspace or facilities. And it's not like there are no choices -- for domestic US travel, depending upon your origin and destination, you could have a choice between UA, DL, AA, AS, WN, B6, G4, NK, SY, and F9, plus a couple of truly minor carriers (Silver, Cape Air, Boutique Air, whatever airline is currently serving IPL, etc.)
Apr 6, 2019, 2:40 am
#618
Join Date: Sep 2008
Posts: 812
Except, of course, that real airfares are lower than ever. (Yes: Airlines for America is a trade group; feel free to find your own source, but the basic conclusions are the same).
https://openmarketsinstitute.org/exp...line-monopoly/
Complaints about the decline of airline service have now become a commonplace of American life. Viral videos showing passengers being manhandled or pushed to the ground and left unconscious by airline employees become the talk of the nation. These amplify long simmering resentments over such routine indignities as “involuntary denied boardings,” late and canceled flight, mishandled baggage, bruised knees, and ever more add-on charges.Meanwhile, more and more cities and even whole regions of “fly over America” are finding they are served by fewer and fewer flights costing more and more. While the number of departures at large hub airports declined 6.2 percent between 2007 and 2016, the decline at small and non-hub airports was 31.5 percent, or five times as great. An analysis of government data by the Wall Street Journal shows that not only has service to all but the largest airports fallen dramatically over the last decade, [u]the already high cost of flying to most mid-size and smaller locations has increased faster than inflation. Adding insult to injury, the industry’s profitability recently hit an all-time high, reaching $20 billion in 2016.[/b]
. . .What explains the sorry state of airline travel in the United States? Largely, it is story of government retreating from its historical role in structuring competition in airline markets, combined with a near wholesale abandonment of anti-trust enforcement.Today, a series of mega-mergers have left the four largest U.S. airlines—American, Delta, United, and Southwest—controlling about 80 percent of total domestic passenger traffic. In many cities and regions, the degree of monopoly is much more extreme. As of 2015, a single airline controlled a majority of the market at 40 of the 100 largest U.S. airports, up from 34 airports a decade earlier. At all but 7 of the top 100, one or two airlines control a majority of the seats for sale.In other industries where a few large firms dominate (think Coke and Pepsi) they may still compete fiercely with each other in every city and town, but when consolidation occurs among airlines it often leaves local communities completely dominated by single carrier or cartel of common owners. Underscoring the degree of cartelization in the today’s U.S. airline industry is the fact that the biggest four airlines each count among its largest shareholders the same four large institutional investors: BlackRock, Vanguard, State Street, and PRIMECAP. This interlocking, common ownership structure of airlines, which is akin to the giant investment banking trusts that gained control of the railroadsand other key industries in the late 19th century, means that even nominally independent airlines have strong incentives to avoid competing for market share. One study comparing fares on routes served by airlines with and without common owners finds that the horizontal ownership structure that pervades the U.S airline industry raises the cost of flying by 10-12 percent.Concentrated ownership of airlines also leads to lower service levels. The Federal Aviation Administration has estimated that when a market’s service options shrink from three airlines to two, the length of delays in the market increases by 25 percent.
. . .What explains the sorry state of airline travel in the United States? Largely, it is story of government retreating from its historical role in structuring competition in airline markets, combined with a near wholesale abandonment of anti-trust enforcement.Today, a series of mega-mergers have left the four largest U.S. airlines—American, Delta, United, and Southwest—controlling about 80 percent of total domestic passenger traffic. In many cities and regions, the degree of monopoly is much more extreme. As of 2015, a single airline controlled a majority of the market at 40 of the 100 largest U.S. airports, up from 34 airports a decade earlier. At all but 7 of the top 100, one or two airlines control a majority of the seats for sale.In other industries where a few large firms dominate (think Coke and Pepsi) they may still compete fiercely with each other in every city and town, but when consolidation occurs among airlines it often leaves local communities completely dominated by single carrier or cartel of common owners. Underscoring the degree of cartelization in the today’s U.S. airline industry is the fact that the biggest four airlines each count among its largest shareholders the same four large institutional investors: BlackRock, Vanguard, State Street, and PRIMECAP. This interlocking, common ownership structure of airlines, which is akin to the giant investment banking trusts that gained control of the railroadsand other key industries in the late 19th century, means that even nominally independent airlines have strong incentives to avoid competing for market share. One study comparing fares on routes served by airlines with and without common owners finds that the horizontal ownership structure that pervades the U.S airline industry raises the cost of flying by 10-12 percent.Concentrated ownership of airlines also leads to lower service levels. The Federal Aviation Administration has estimated that when a market’s service options shrink from three airlines to two, the length of delays in the market increases by 25 percent.
Apr 6, 2019, 3:12 am
#619
FlyerTalk Evangelist
Join Date: Oct 2001
Location: Austin, TX
Posts: 21,413
The most eye-catching numbers in your quote are (a) the 31.5% decline in traffic at small airports -- which was sourced from a trade group for the regionals. There are too many factors to attribute that to any single cause; keep in mind, the regionals have been under a massive pilot crunch since the introduction of the 1500 hour rule. (b) the 25% increase in delay rate; if you read the linked article, it says "[h]owever, the impact of reduced competition on the percentage of late flights was only minimally statistically significant and small in size."
The author of this paper decided the conclusions in advance and then found statistics to appear to support it. It's a position paper, not a research paper.
I shouldn't have said airfare is less expensive than ever, though, because it has been increasing over the last several years. However, I attribute that more to the fact that the economy has been running hot for that entire period and capacities are strained. Yes, there's probably room to add GRR-LIT flights, but there's little excess capacity on routes that people are actually trying to fly. So, it's no longer at a global minimum, but it's still much cheaper to fly than it was in 1978 at the end of the regulation era.
Put another way: Yes, US, CO, and NW are all gone -- but G4, NK, and F9 are all new / greatly expanded over that same timeframe. The idea that today's high load factors is due to a capacity reduction in the overall system doesn't really hold water (again: look at the number of takeoffs and landings at high-traffic airports; they're full). Some of it is rightsizing aircraft -- 737s replacing 747s for domestic use, for example -- but most of it is just there are twice as many people trying to fly now as there were 15 years ago.
Apr 6, 2019, 3:17 am
#620
Join Date: Sep 2008
Posts: 812
Why did prices drop after deregulation? Competition. Why are prices going back up? Reduced competition due to consolidation.
And for the record, the underlying source for the services decreases and price increases is a WSJ article, which is about as far away from "anti-globalization" as you can get.
https://www.wsj.com/articles/airline...est-1441912457
Airline Consolidation Hits Smaller Cities Hardest
Fliers fare unevenly after big carriers merge, place emphasis on profits
And for the record, the underlying source for the services decreases and price increases is a WSJ article, which is about as far away from "anti-globalization" as you can get.
https://www.wsj.com/articles/airline...est-1441912457
Airline Consolidation Hits Smaller Cities Hardest
Fliers fare unevenly after big carriers merge, place emphasis on profits
Apr 6, 2019, 3:32 am
#621
FlyerTalk Evangelist
Join Date: Oct 2001
Location: Austin, TX
Posts: 21,413
But even if none of the consolidations had occurred, I think you'd see the same behavior in the industry. Look at Europe, which has lots of competition if considered one big market -- and a business class product that's even worse than domestic first, some of the weakest FFPs on the planet, and many of the same complaints about service.And if you want to see a lack of competition, look at Canada. I was curious to see what it would cost to visit Nunavut, so I priced a trip from Yellowknife to Iqaluit and then on to Ottawa. It came out to about $2000. Now that's high airfare.
While this is yet another negative change, I think sometimes we don't know how good we have it.
Apr 6, 2019, 5:21 am
#622
Join Date: May 2011
Location: NYC (LGA, JFK), CT
Programs: Delta Platinum, American Gold, JetBlue Mosaic 4, Marriott Platinum, Hyatt Explorist, Hilton Diamond,
Posts: 4,895
This is a negative change for those that like to get outsized value in terms of cents per miles for their points. But I think some of the other reactions here and on the blogs are a bit hyperbolic...
1) I would guess most customers of US airlines redeem for domestic flights. A lot of times, they are redeeming multiple tickets for their family, often in economy. For these customers, this is probably neutral to slightly negative. These customers will see higher prices for peak demand times, but could also get lower prices. Otherwise the value proposition for these types of trips doesn’t change all that much
2) The experience with Delta, Southwest, JefBlue and others suggest that people find value in the credit cards even in a relatively fixed value system. Delta has seen a lot of growth in their credit cards over the past few years - I would assume it is by far the most popular airline credit card program. The cards offer companion passes, lounge access, pay with miles flexibility, etc. Delta also lets you upgrade with points, pay for drinks with points, etc. Customers evidentially find these redemption options attractive.
3) High volume business customers have been earning more redeemable points through regular flying with the introduction of revenue based earnings. It is not surprising that redeeming would get closer to that system as well
4) People can still take their “dream trips” internationally - some of these trips may have to be in economy, where cash pricing has generally been competitive in recent years. And if your focus is on international premium cabins, look to programs like Flying Blue (which can provides good value even without an award chart).
5) The elimination of close in booking fees is more of a big deal than you think, mainly because I am noticing lower cash (and therefore lower award) pricing close in on many competitive routes. For example, I took a trip recently where the cash price day of trip was lower than it was a month or two out. I believe this has to do with competition from JetBlue and the Spirits of the world on many routes. I have only a few UA miles, but I have chosen against redeeming them precisely because of the close in booking fee. In these cases, I either paid cash or redeemed miles on other airlines
1) I would guess most customers of US airlines redeem for domestic flights. A lot of times, they are redeeming multiple tickets for their family, often in economy. For these customers, this is probably neutral to slightly negative. These customers will see higher prices for peak demand times, but could also get lower prices. Otherwise the value proposition for these types of trips doesn’t change all that much
2) The experience with Delta, Southwest, JefBlue and others suggest that people find value in the credit cards even in a relatively fixed value system. Delta has seen a lot of growth in their credit cards over the past few years - I would assume it is by far the most popular airline credit card program. The cards offer companion passes, lounge access, pay with miles flexibility, etc. Delta also lets you upgrade with points, pay for drinks with points, etc. Customers evidentially find these redemption options attractive.
3) High volume business customers have been earning more redeemable points through regular flying with the introduction of revenue based earnings. It is not surprising that redeeming would get closer to that system as well
4) People can still take their “dream trips” internationally - some of these trips may have to be in economy, where cash pricing has generally been competitive in recent years. And if your focus is on international premium cabins, look to programs like Flying Blue (which can provides good value even without an award chart).
5) The elimination of close in booking fees is more of a big deal than you think, mainly because I am noticing lower cash (and therefore lower award) pricing close in on many competitive routes. For example, I took a trip recently where the cash price day of trip was lower than it was a month or two out. I believe this has to do with competition from JetBlue and the Spirits of the world on many routes. I have only a few UA miles, but I have chosen against redeeming them precisely because of the close in booking fee. In these cases, I either paid cash or redeemed miles on other airlines
Apr 6, 2019, 6:02 am
#623
Join Date: Feb 2016
Location: Seattle, WA
Programs: AS MVP Gold 75K, DL Platinum, UA Gold, Marriott LT Titanium, Hyatt Globalist, Hilton Gold
Posts: 89
Agreed. As others have mentioned, credit cards have been a huge part of the problem. Free bags, priority boarding, and the often too generous massive amounts of points handed out as bonuses. WIth so many extra points floating around, it's no wonder airlines want you to burn that liability as quickly as possible. As somebody that travels weekly, it has been frustrating watching the programs getting less and less valuable. I have to admit that I get a little upset when I see non-frequent travelers getting these perks that were once reserved for true road warriors. Lounges flooded, upgrades sold off to the highest bidder, you name it. I've been flying Alaska after my move to Seattle and plan on sticking with them even though I could easily hop back to UA on my new SEA-ORD weekly route.
Apr 6, 2019, 6:15 am
#624
Join Date: Nov 2008
Location: Washington, DC
Programs: United Premier 1K 1MM; AA Plat Pro; Hyatt Globalist; Marriott Platinum; Avis President's Club
Posts: 2,529
I'm not sure I like this change. What I hate about the Delta dynamic pricing is I don't understand, or now, what the true range of mileage redemption is. For example, domestic intercontinental is it a low of 5,000 up to 35,000 in economy? I think if I knew the range I could make a better informed decision about redemption and I don't get the sense this is true with United.
Also, what will happen to a mixed UA and *A award? Will the *A award chart rule?
Also, what will happen to a mixed UA and *A award? Will the *A award chart rule?
Apr 6, 2019, 6:42 am
#625
FlyerTalk Evangelist
Join Date: Jul 1999
Location: ORD/MDW
Programs: BA/AA/AS/B6/WN/ UA/HH/MR and more like 'em but most felicitously & importantly MUCCI
Posts: 19,719
The managers have no choice but to devalue the currency, and now in UA's case actually conceal its value, even though the outcome might be wholesale loss of faith and a currency "crash." (Every currency, from the pound sterling to Expedia Rewards points, runs on the faith and belief of its owners. No faith, no value.) A 60,000-mile signup bonus sounds great to rubes, but in this new world it might not be enough to get you from Buffalo to Boston in January.
The more customers discern that and say the hell with it, the more trouble UA, Chase, Amex, etc. are in.
Apr 6, 2019, 7:00 am
#627
FlyerTalk Evangelist
Join Date: Apr 2009
Location: where lions are led by donkeys...
Programs: Lifetime Gold, Global Entry, Hertz PC, and my wallet
Posts: 20,345
All I know is that it might start off in my favour, but will gradually get worse over time as does everything these days with UA under Munoz and his minions.
Apr 6, 2019, 7:09 am
#628
Join Date: Sep 2008
Location: SF Bay Area
Programs: None - previously UA
Posts: 4,866
They announced this on a friday, which confirms this is basically a huge devaluation. I see it as a way to further monetize and extract value from MileagePlus. Their average redemption cost is closer to base cost.
Apr 6, 2019, 7:23 am
#629
Join Date: Dec 2014
Programs: UA GS ,QF Plat
Posts: 686
Best Mileage Program ?
I am particularly unimpressed how they canvassed MP members a few weeks ago for votes
for the program knowing they were going to gut it with major changes.....classy
Looking forward to the next recession when they lose half their revenue to Skype calls and they have to explain where
the loyal flyers have have gone
for the program knowing they were going to gut it with major changes.....classy
Looking forward to the next recession when they lose half their revenue to Skype calls and they have to explain where
the loyal flyers have have gone
Apr 6, 2019, 7:25 am
#630
Join Date: Feb 2015
Programs: united
Posts: 1,636
Obviously, 3 major carriers IS anticompetitive and consumers DO get screwed.
OTOH when there was more competition major airlines went bankrupt ALL THE TIME.