Updates from United on the Award Devaluation

This morning I was one of the first bloggers to write about the significant devaluation of United Miles and their new award charts.

United has also release some clarification on Flyertalk about the new award charts:

Originally Posted by mitchmuView Post
Do these rates apply for tickets purchased after Feb 1 or for travel after Feb 1?
That is, if you purchase a ticket now, to fly Mar 15, will that be new or old pricing?
(United Response): Hi mitchmu, the new award pricing takes effect for bookings made on or after Feb 1, 2014 for all future travel dates. If you purchase a ticket now for travel on March 15, and no changes are made to the itinerary, the current pricing will apply.
This is fairly self-explanatory. ALL travel at the current award charts must be BOOKED before February 1st. The travel date is irrelevant.
Originally Posted by TravelinSperryView Post
Wow, the biggest % jumps are in Star Alliance First class. The miles required for these routes moved significantly. Why would these routes be affected so much more (on a % basis), then the other classes of service?
(United Response): Hi TravelinSperry, you raise a fundamental question. Frankly, the levels at which we currently offer these awards, particularly in the premium cabins, have not kept up with the increased cost from our partners to United. It’s been several years since we’ve adjusted our award pricing, and in many cases what we’ve been charging for awards has gotten highly out of sync with what it costs United to supply partner award seats to our customers. Being able to book premium-cabin award travel across 30+ MileagePlus partners is of course a strong benefit of the program, and we wanted to maintain access to these itineraries instead of restricting them altogether—an approach other programs have taken.
I’m not sure this is a valid explanation, but there might be some logic to it. As far as I know there is no Star Alliance award program that restricts partner redemption. True, Singapore KrisFlyer, ANA Mileage Club, and Asiana all have their own charts valid on their metal only, and a separate Star Alliance chart which is more pricy. US Airways has their own chart and off-peak season awards. There is nothing that is saying that any program have taken or are even allowed to take the approach of not allowing partner awards.
The only part which cold be true is that there is an increased costs for United to ticket partner awards and the money that United has to pay for an award ticket, that has for example, a Lufthansa segment goes up.  But we don’t have access to those rates so we cannot believe that for sure. I highly doubt that United is forced to be paying more for these partner segments and I don’t quite see all the other Star Alliance partners instantly devaluing. Perhaps it’s more accurate to say that UA awards were priced too low relative to the other programs and now they realize the financial pinch and have to raise the award levels to compensate.
Originally Posted by DWFIView Post
Aaron – if I book an award in Jan 2014 and then make changes in Feb or beyond (in routing, airline, origin, destination, etc), will it be repriced according to new mileage reqs. or will I keep the old pricing on that ticket?
(United Response): Hi DWFI, Our existing change process will apply. Changes to awards that require a change in date do not result in a change to the award price. Any other change will require an add/collect in miles and fees for changes or cancellations will still apply as per our existing policies.
That is actually slightly better, but still unfortunate Remember, the award chart change fees are here. At least this means that change could be possible…
Finally, they have a note about mixing star alliance and United metal awards:
Finally, a note about mixed-carrier Saver Awards. Although there will now be two charts, it will be still be possible to combine United/United Express and MileagePlus partner award flights on the same itinerary. However, the MileagePlus partner award cabin level will need to be lower than that of the United-operated segment(s) in order to take advantage of the United Saver Award price. So, for a US to Europe itinerary where the long-haul segment is in United Global First, the intra-Europe connecting segment would need to be in Business or Economy (as they typically already are) to take advantage of the United Saver Award price. Similarly, for a US to Europe itinerary where the long-haul segment is in United BusinessFirst, the intra-Europe connecting segment would need to be in Economy to take advantage of the United Saver Award price.
This is actually fairly reasonable. So that means for example flying from SFO-HKG in Global First is 80k on United metal only. Adding a HKG-TPE segment in EVA Air Business Class (Premium/Royal Laurel) would mean would price it at the higher of the Star Alliance Award Chart in business class or the higher of the United Metal chart. In this example, this means that an SFO-HKG-TPE would price as 80,000 miles rather than 120,000 miles.
This also works with United BusinessFirst to Europe which is 57,500 miles. Adding an economy class intra-Europe segment would price the award at the higher of the Star Alliance Award Chart or the United Metal Award ChartThis means an award such as ORD-FRA-ZRH in United BusinessFirst and Lufthansa Economy intra-Europe would price at 57,500 miles. This is pretty ridiculous but that means that there is a very big incentive to fly the transatlantic and transpacific portions of travel on United.
I’m still working on my analysis but hopefully this is a bit more clear.

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Comments

  1. (United Response): Hi DWFI, Our existing change process will apply. Changes to awards that require a change in date do not result in a change to the award price. Any other change will require an add/collect in miles and fees for changes or cancellations will still apply as per our existing policies.

    So changes in airline, connecting cities will result in repricing at new levels, even if origin and destination cities remain the same? Its confusing because United states that existing change process will apply (which allows changes in airline, connections), yet below they state that only a change in date will not result in change to he award price.

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