For months, United has proudly boasted that it is doing away with the $75 close-in processing fee for awards booked within 21 days of departure. What it did not mention was that that dollar fee for close-in bookings would merely be replaced by a mileage fee for close-in bookings.
I’ve written about the changes already. In this post, I want to focus on the (il)logic behind it.
In short, United has raised the price of flights on its own metal up to 2,500 miles and on partner flights 3,500 miles for travel booked within 30 days of departure.
United defends this change by arguing:
Award pricing is based on a variety of factors, including demand, route, airline, and how far in advance the award ticket is purchased. Generally, booking your award flight further in advance will help you find the lowest price, and booking closer to departure may result in a higher price.
And while United can charge what it wants for close-in award bookings, let’s dispel the myth: close-in bookings do not cost United any more. In fact, they often end up costing United even less.
Let’s start with United’s own flights. All the time, we see last-minute tickets pricing cheaply when United decides to cut prices in hopes of selling more seats. Why isn’t that reflected in award pricing? Generally, the flights that will have saver space at the last-minute are flights that will otherwise go out with open seats. So why penalize mileage customers?
As for partners, United pays the same cost for partner awards whether booked a year in advance or an hour in advance. Charging more for close-in bookings is not correlated to United’s costs. Rather, it is reflects a policy choice that this negative change will primarily target business travelers and takes into account the fact that many partner airlines only release award space at the last minute.
That’s why I’ve long opposed the $75 close-in processing fee for general members and why I also despise the new surcharge for bookings made within 30 days of travel. These increased costs are merely a punitive measure against last-minute travelers. These costs do not reflect United’s costs.
My Favorite Awards Now Costs 40% More
I take advantage of 8K last-minute one-way awards within Europe all the time. For me, it was one of the best features of the MileagePlus program. Now I’ll just stick to Avianca LifeMiles for those redemptions, since United has introduced an onerous 3.5K surcharge whether the award costs 8K miles or 140K miles. Yes, my award cost for my most-redeemed award went up over 40% overnight.
For elite members of the MileagePlus program, the changes are simply bad news. For general members, the $75 in cash or 3,500 miles may be a wash, but don’t fool yourself. When United promised to “eliminate” close-in booking fees, I bet you did not think that United would just collect more miles instead.
Don’t buy the spin that the higher mileage costs for awards booked within 30 days of travel somehow represent increased costs incurred by United. The opposite is true. By raising prices for everyone, United has devalued MileagePlus in an unexpected way. The move is frustrating for its lack of transparency and misleading effort to imply that flights cost more when booked close-in.
Any guesses as to when the next shoe will drop?