Yesterday, I reported that United would make a number of changes to its MileagePlus program in November. I had a chance to speak with Luc Bondar, United’s Vice President of Loyalty and head of the MileagePlus program.
We spoke for 35 minutes and our entire conversation was on the record and covered a wide range of topics. I wish I would have recorded the call and could just post it instead of summarizing it, I’ve detailed below what we spoke about.
Bondar stressed four objectives in the upcoming changes to the MileagePlus program.
- Simplify the program
- Better reflect how our customers travel today
- Engage the wider member base (not just premium members)
- Continue to reward most loyal customers in the most meaningful way
Fully Dynamic United Awards
Simplify is typically a codeword for devaluation. Rather than a fixed award chart, the number of miles required for a United flight will fluctuate based upon demand. Some flights may be cheaper than ever before, as we’ve seen recently with one-way awards as low as 5K miles, while others will “better reflect demand.” Bondar gave the example of flights around Thanksgiving and Christmas which “may” (meaning will) see increased prices.
I asked him about flights to Australia in business class over the holidays. Will we see one-way business class pricing for 400,000 miles like on Delta? Should customers expect massive increases in price?
The answer is likely. Bondar stressed how United still wanted to keep pricing competitive, but again mentioned how pricing would better reflect demand for flights.
To use that Sydney example, look at the difference between United and Delta right now on 12/26/19. United’s 200K one-way to Australia is the current ceiling on one-way awards in business class. Meanwhile, Delta is charging 365K for its nonstop from LA to Sydney.
Pricing on United’s current “Anytime” awards became more dynamic in late 2017, but have remained a great value compared to flexible awards on American and Delta. For clients who require a specific or direct routing, these “Anytime” awards have become a valuable option. But with the ceiling lifted, expect cheaper prices on some days but far more expensive prices on others.
Capacity Controls Continue
Award travel on United will not be tied to any price point. Furthermore, these awards will still be capacity-controlled. Thus, unless you have earned MileagePlus Premier status or hold United co-branded credit cards from Chase, you still will not necessarily have access to last-seat availability no matter what price United is charging.
Booking United Awards Through Partner Miles
I know that many readers have miles with Aeroplan or LifeMiles and are interested in how these changes will impact Star Alliance partner access to United award space. So I asked Bondar how this new dynamic award space would be mapped. Currently, “saver” space is X in economy class on I in business class on United. Anytime awards book into a different fare class: HN in economy class and ZN in business class.
Since the concept of “saver” and “Anytime” awards will disappear, I asked if there will be some sort of cutoff price point for when an award is offered to Star Alliance partners. For example, will any domestic award in the Continental USA pricing at 12,500 miles or less available to partners as X class?
I was only told that partners would still have access to MileagePlus space as before and that X and I classes would still be used. Thus, we’ll have to wait and see.
Bondar also confirmed that additional “discounted” award space would continue for Premier members and credit card holders. Expect this to work like United’s recent Tahiti award sale. For that sale, pricing depended upon your MileagePlus Premier status (prices ranged from 42,000 to 56,000 round-trip) although everything booked into the same “X” fare class.
Bottom line, the price you see is the price you’ll pay.
On Partner Awards
I pushed Bondar hard on the issue of devaluing partner awards. Why remove the chart if the price won’t change? Why not have a separate fixed award chart for partner awards? After all, United already charges a premium for business and first class redemptions on partners. Isn’t United laying the groundwork to increase, or at least greatly fluctuate, the cost of mileage awards?
Bondar told me that is not the objective. He stressed the “simplifying” goal once again and told me that partner awards, at least for the foreseeable future, would remain at a fixed level. Furthermore, he assured me there “no plans” to increase pricing on these awards in November.
Instant Posting Of Miles
Mileage credit for United flights will post much quicker than before, sometimes within minutes of stepping off a plane. Bondar stressed this will allow members to redeem miles and enjoy earned elite status quicker. I’ve found that flights are already posting much quicker than in the past.
I asked about whether this would occur for partner flights as well and was told not yet. That’s not a surprise, but I asked because of the alliance-wide initiative at Star Alliance to post miles much more quickly.
No Close-In Processing Fees
Starting on November 15th, United will no longer charge a close-in processing fee for bookings made less than 21 days prior to travel. Currently, that rate is $75 for general members, $50 for Premier Silvers, and $25 for Premier Golds. The fee is waived for MileagePlus Premier Platinums and above as well as for United credit card holders.
In the short-term, this will be a great value for booking last-minute partner awards.
I asked if Chase was onboard with these changes since it might greatly impact consumers’ use of the co-branded credit cards.
Bondar said that Chase has been made aware of these changes and is onboard with them.
Basic Economy On Economy Award Tickets
United has no plans to book economy class award tickets into Basic Economy.
Married Segment Fare Logic
Married segment fare logic will become even more critical in establishing price. This will not mark a sudden change in the program but a continued evolution of what has already begun. Gone are the days when each flight either had award space or did not. Now availability is often determined by markets and connections. For example, Denver to Sydney might have cheap award space via Los Angeles (LAX-DEN-SYD). But the same LAX-SYD flight might be more expensive if booked alone, since many are willing to pay for the convenience of a non-stop route.
> Read More: A Primer On Married Segments
Singapore Airlines Award Space?
I took the opportunity to ask if United had a fix for the ongoing Singapore Airlines award space issue. Bondar said that the “technical” issue remains and United is working to fix it, but provided no timeline for resolution.
On Monday, I’ll offer my commentary, some positive but mostly negative, on these changes. These changes are hardly a surprise and there’s no need to panic (just yet). Don’t rush out and burn all your United miles this weekend. But do be aware that changes are coming and this news constitutes a devaluation.