United has largely eliminated low-cost domestic award flights
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Editor’s note: At TPG, our top priority is providing our readers with the information needed to make educated decisions about travel and rewards-earning strategy. This is not the best time to travel, domestically or internationally, as airlines have cut major parts of their route networks. But we are sharing this information to provide value for future travel once coronavirus concerns have subsided.
The coronavirus outbreak has forced airlines to make all sorts of changes. We’ve seen airline CEOs go without pay, airlines completely slash routes and make other massive cuts. One thing we haven’t heard so much about, however, is loyalty program prices. While airlines have been extending elite status and mileage expiration, there hasn’t been much news around the coronavirus impact on actually earning or redeeming miles.
Of course, this is potentially for a good reason: You shouldn’t be traveling right now. But as we’ve discussed earlier, now can be a good time to book travel for later in the year. Since award space is wide open, it may be possible for you to score award tickets on flights that otherwise may be hard to book with a reasonable number of miles.
With this in mind, I was on United.com earlier today searching for a handful of award tickets for later in the year. In my searches, I noticed something disheartening: All United awards now price at or above the old award chart rates with starting prices of 12,500 miles each way. In doing this, United has removed any upside to its 2019 switch to dynamic pricing, which initially made some awards more expensive, but others less expensive.
We’ll give you a few examples of how award tickets are pricing with United, analyze a few of the trends we’re seeing and discuss how long these changes might be in effect.
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United tickets pricing at or above award chart pricing
United switched to dynamic award pricing last year, and removed all of its award charts in the process. Thankfully, United has kept most international saver awards on its own planes and all international partner flights at standard pricing for the time being, with only minimal flights being subject to higher award costs.
One of the nice parts about United’s move to dynamic award pricing is ultra-cheap domestic award tickets on select dates and routes. Before dynamic award pricing, the base award price was 12,500 miles each way for economy saver awards for all but the shortest-haul flights, even if it was a super low demand travel time.
But, since United’s switch to dynamic pricing, we’ve seen short and mid-haul flights like Houston (IAH) to Orlando (MCO) pricing at just 5,000 United miles one-way with $5.60 in attached taxes and fees on lower demand dates. These deals are the upside of dynamic award pricing. In recent weeks, TPG staffers have even booked some 5,000 and 7,000 mile United awards for future travel. Under the old award chart, those prices wouldn’t have been possible.
Unfortunately, as of at least the last few days, we no longer see United domestic flights price below the old 12,500-mile minimum award chart price. TPG ran a number of different searches over the last few days, and found that flights with saver-award space are once again pricing at a minimum pricing level of 12,500 miles each way, with very few exceptions.
Using the Houston to Orlando example, we’re seeing flights price at 12,500 United miles one-way or higher through the end of the year. The screenshot above shows award space the second half of December 2020 and first half of January 2021. The lowest price is 12,500 United miles for a saver award and the highest is 32,500 miles on two dates without saver space.
To make matters worse, most sub-500-mile flights are also pricing at the 12,500-mile mark through the end of the flight calendar, even though these short haul awards used to start at a lower price point even during the award chart era. This is especially true on business-heavy routes like Washington, D.C. National (DCA) to Newark (EWR) and Des Moines (DSM) to Chicago (ORD). Over the past few months, I’ve seen the Washington to Newark route price as low as 5,500 United miles one-way.
There are a few short-haul flights pricing at 7,500 miles, though. For example, the 282-mile hop from Los Angeles (LAX) to Las Vegas (LAS) is pricing at 7,500 miles for many dates toward the end of the year. But until recently, we’ve seen this route price as low as 5,000 United miles one-way.
Why the switch?
There’s no doubt that United’s decision to remove the lower-cost domestic award tickets is disappointing. Not only has this removed one of my recent favorite ways to redeem United miles, but it’s effectively devalued United miles for those of us that use our miles for short-haul domestic award tickets.
That’s not to say I don’t get the reasoning behind United’s change – after all, It’s no secret that United, like all airlines, is hemorrhaging money right now. The coronavirus outbreak has brought air travel to a screeching halt, and is forcing United to cut routes, slash flight frequencies and even seek government assistance to keep paying its bills and prevent layoffs.
With this in mind, United needs to reduce its liabilities somewhere, and one easy place for them to try this is to raise the price of award tickets — especially for when flying is set to (hopefully) increase toward the end of the year.
When we asked United about these changes, the airline responded with the following:
“Our award prices are dynamic and we continue to offer domestic awards at a range of different price points.”
These changes likely won’t last forever
Fear not, though: While we don’t have a crystal ball, we don’t think these changes are permanent. The coronavirus-induced travel downturn won’t last forever, and with time, people will start traveling again for work and pleasure. When travelers take back in the sky, United will want to entice passengers to get back on their planes, earn miles and not jump ship (or is it, plane?) to another domestic carrier.
When this happens, I foresee United bringing back low-cost domestic award tickets on most routes during lower demand periods. If they don’t, the airline risks losing loyal flyers, United cobranded credit card holders and credit card points transfers to other airlines — like American and Delta — that do still offer low-cost award tickets.
When will this be? It’s hard to say. Some analysts predict that travel won’t fully recover for years, which may very well be the case when compared to late-2019 levels of demand. Regardless, there’s a good chance we’ll see United’s award prices get more competitive at least once the coronavirus is more contained and revenue flights pick back up.
If this happens by mid-summer, I think we could see flying pick back up by Q4 of 2020 for the winter holidays. At this time, United may start to offer lower domestic award prices again.
Should I book my United award tickets now?
Long story short: It depends on the flights you want to book.
With the above information in mind, I primarily recommend booking international premium-cabin award tickets with your United miles right now. In most cases, these flights are pricing at standard saver-level award prices, and many routes have wide-open award space in business class.
For example, the ever-so-popular Newark to London Heathrow (LHR) route has business-class award space open for almost every day in January 2021 for 60,000 miles. Sure, that’s winter for both cities, but it’s still an excellent deal and one that I’ll likely book for myself, just in case it’s OK for leisure travel by then. I’ve yet to see United drop the price of a business-class award to Europe below this level, and it’s often hard to find Newark to London award space on peak holiday travel dates.
Likewise, international partner bookings are still a safe bet.
These tickets aren’t subject to dynamic award pricing and are unaffected by the changes discussed in this article since they never really priced below the old saver levels. If you want to scoop up a Star Alliance partner award for the end of the year, now’s your chance to book with wide-open award space. Just make sure you’re familiar with the risks and change or cancellation timelines and fees as there’s no guarantee that leisure travel will be deemed safe by the end of the year.
On the other hand, I’d hold off on booking most domestic tickets on short- and mid-haul routes. These are frequently priced below the 12,500-mile price point on low-demand dates, so you may be able to score a better deal if you wait a couple of months to book.
If you need to book United tickets now for essential travel or want to take advantage of available United space, consider booking with Avianca LifeMiles or Turkish Miles & Smiles instead. Domestic United tickets start at just 6,500 miles one-way with LifeMiles and 7,500 miles each way when booked with Turkish Miles & Smiles. You can transfer points to those programs from programs such as American Express Membership Rewards, Citi ThankYou and Marriott Bonvoy, depending on the program.
This makes changing award tickets difficult, too
An important note, given the current travel climate, is that this not only makes booking award tickets for future travel more expensive, but it’s also particularly bad for those changing existing United award tickets to future dates due to the coronavirus.
When you change a United award ticket, you’re still responsible for paying the mileage difference between the two tickets, even if the change fees themselves are waived. If you booked a ticket that cost 7,500 miles at the time of booking, but want to move to a new flight that now costs 12,500 miles, you’ll be responsible for the 5,000-mile difference.
While United has suspended award redeposit and change fees, an elimination of the lower cost award prices can still leave you owing more miles toward your rebooking.
We’re sad to see United eliminate the upside of dynamic pricing in the way of the lower cost domestic awards and hope the move is short-lived. As it stands today, United has effectively made domestic award travel more expensive when using United miles than it was just a week or two ago.
Featured photo by Justin Sullivan/Getty Images.
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