Full Summary of United Devaluations & New Developments…plus my personal exposure

Want to see how the changes announced early last Friday morning will personally impact my upcoming redemptions? Just take a look at my Ultimate Rewards and MileagePlus balances. We are talking about 385, 759 MileagePlus miles and 347,653 Ultimate Rewards points. Why are the balances so high when everyone knows you should earn and burn with the current state of travel loyalty programs? Well, for United that’s easy. I had two first class awards to Asia/Australia that were redeposited just two weeks ago. The Ultimate Reward balance is so high as I was lucky enough to have recent successful secondary Chase Ink Bold and Ink Plus applications. In addition, I’ve been doing a ton of international travel for work these last few months and have not redeeming as fast as I used to.

OK, so first some good news before we get into the latest updates from United and the full details of the disastrous devaluation…

As per United’s response on Flyertalk, if you book an award at the current prices but then need to make a change after the new award chart is in place, you will only have to pay the normal change fees and will NOT be re-ticketed at the new prices. 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. 

This is key for me! I’m not saying I’m going to redeem all my miles, but this certainly means I’m going to rebook that canceled trip before the change deadline, even if I’m not 100% sure of the dates. I’d rather deal with some potential charges (that hopefully can be waived due to schedule changes or other factors), then have to pay the new outrageous award prices. As for the UR points, I’ll pre-book some first-class trips that I intended to take at some point next year but wouldn’t normally have booked this early. If my preferred carriers aren’t available (because some don’t release first class award space to partners this far out), I’ll once again chance the change penalties instead of the new prices. A big chunk of these will also be used on our family vacation to the Caribbean later this year, and those prices are NOT increasing.

OK, so for those of you who took the weekend off from points news after Halloween, here are the details of the massive devaluation changes announced last Friday as well as the latest developments. I’ve really been impressed by the BoardingArea and blogger community and think they’ve done an amazing job of summarizing the changes and pressing for additional details. Here are the ones I’ve found most useful:

First off, for all MileagePlus awards booked on February 1, 2014 or later, there will now be two award charts, one for travel on United and one for travel on Star Alliance partners. The United chart increases are tolerable, while the Star Alliance partner chart (those awards that are most valuable to many points collectors) are simply outrageous.

Lucky at One Mile At A Time details the United specific award chart:

So the changes to the United chart represent reasonable devaluations, in my opinion. Business class to Europe goes from 100,000 miles to 115,000 miles. That’s a reasonable devaluation, given that Delta just changed their saver business class redemption rates to Europe to 125,000 miles. Meanwhile 130,000 miles for roundtrip business class travel to Japan isn’t bad either — it’s an increase of just 5,000 miles in each direction. The same goes for South Asia, which in business class is going from 120,000 miles roundtrip to 140,000 miles roundtrip.But what on earth happened with United’s Star Alliance redemption rates? We’re not seeing 15-20% increases in mileage requirements there, but for premium cabin international travel are instead seeing ~50-90% increases. How on earth can they begin to justify that? So United flies to fewer than a third of the destinations that are served by the Star Alliance which is the whole selling point of the Star Alliance. In most cases you don’t have a choice as to whether or not to fly United. This isn’t an issue of wanting to fly the Star Alliance for a better experience(though that’s a good motive as well), but rather just wanting to get to many destinations not served by United, which is the whole selling point of the Star Alliance.

Gary from View from the Wing outlines just how terrible the Star Alliance chart increases are:

Europe/Africa:

• First class between North America and Europe on partner airlines goes from 135,000 miles roundtrip to 220,000 miles roundtrip. That’s a 63% increase.
• First class between North America and the Middle East on partner airlines goes from 150,000 miles roundtrip to 280,000 miles roundtrip. That’s an 87% increase.
• First class between North America and Africa on partner airlines goes from 150,000 miles roundtrip to 260,000 miles roundtrip. That’s a 73% increase.

Asia:

• First class between North America and Japan on partner airlines goes from 135,000 miles roundtrip to 220,000 miles roundtrip. That’s a 63% increase.
• First class between North America and North Asia on partner airlines goes from 140,000 miles roundtrip to 240,000 miles roundtrip. That’s a 71% increase.
• First class between North America and Central Asia on partner airlines goes from 160,000 miles roundtrip to 280,000 miles roundtrip. That’s a 75% increase.
• First class between North American and South Asia on partner airlines goes from 140,000 miles roundtrip to 260,000 miles roundtrip. That’s an 86% increase.

Oceania and Australia/New Zealand:

• First class between North America and Oceania on partner airlines goes from 150,000 miles roundtrip to 220,000 miles roundtrip. That’s a 47% increase.
• First class between North America and Australia/New Zealand on partner airlines goes from 160,000 miles roundtrip to 260,000 miles roundtrip. That’s a 62% increase

Travel Summary has some great charts displaying current pricing, new pricing, and the net change. Check out the link to see them all, here’s one example.

Courtesy Travel Summary

Summer from Mommy Points notes that the changes aren’t horrible for all, especially domestic and international economy travelers:

This is bad, and in some cases really bad, but if you use your miles to primarily fly in the US, Canada, Mexico, Caribbean, or in economy internationally, or primarily on United operated flights in premium cabins internationally it isn’t horrible. Tune out the noise that United miles are now the next Delta SkyPesos, because it simply isn’t true for most of us. I think the majority of family travelers, even though in the miles and points world, aren’t going to be impacted more than maybe 15% max by this devaluation, some less than that.

• There are no changes to award redemptions in the lower 48 or Canada at the economy, business, or first class level.
• Economy flights at 700 miles or less in US/Canada are still 10,000 miles each way.
• Saver economy awards to/from the US or Canada to Alaska are now 17.5k miles each way, up from 12.5k miles each way.
• You can no longer have a stopover on a domestic award ticket for an additional 10,000 miles.
• Economy saver redemptions from the US/Canada to Hawaii increase 2.5k miles each way. Business and first class Hawaii saver redemptions remain the same, though standard redemptions do increase.
• Intra-Hawaii flights on partners increase 1,000 miles from 5k to 6k.
• Saver awards from US/Canada to the Caribbean, Mexico, Central America, and Northern South America all remain the same for all cabins.
• Saver awards from US/Canada to Southern South America remain the same in economy at the saver level, but increase 5k each way for business, and 2.5k each way in first.

Summer also posted United’s responses from Flyertalk in a more reader friendly format:

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?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.

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? 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.

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? 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.

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.

The Wandering Aramean highlights that there are rule changes to upgrades as well:

There are some significant rule changes for upgrades in “regional” international markets, however, which are universally negative. For flights to/from Northern South America (i.e. narrow-body service to the region) and within Asia MileagePlus Premier members will no longer be eligible for complimentary upgrades. This applies to both instant-upgrades for full fare tickets and the regular CPU process the week prior to departure. These routes will also no longer be eligible for upgrades with Regional Premier Upgrade (RPU) instruments. And, while Global Premier Upgrade (GPU) instruments are still valid these routes will have a minimum fare requirement (W or higher) in line with routes typically operated as BusinessFirst or GlobalFirst, despite these regional flights having the lower service levels and cabin configurations in most cases. Finally, bringing these routes in line with other GPU-only markets, Premier members are no longer exempt from the co-pay portion of the upgrades when flying in these markets. The changes to the upgrade rules are effective immediately, not in February 2014. That’s doubly bad news for customers in these markets.

So, what do I plan to do in the next few months? I’ll be booking as much international partner first class travel as possible…and then changing the dates. I rarely book travel this far out as the flights I would most likely want won’t be available until two weeks or even just a few days prior to the flight…but I think it certainly pays to pre-plan (guesstimate) this time. With my dropped status, the changes will cost me, though I feel that it’s certainly worth the $100 fee…perhaps even multiple times (remember any changes other than dates will incur the new award prices). Going forward, I’ll certainly continue applying for new cards that earn Ultimate Rewards, I’ll just value the currency differently. Perhaps I’ll focus on Hyatt transfers (only 22,000 points required for a standard room at the top level properties), Korean Airlines first (80K) and business class flight awards (62.5K), or Southwest domestic flights. Also, redemptions on United operated flights to Europe and Asia in business are still extremely valuable as are flight redemptions to the Caribbean (especially during busy holiday travel periods).  Trying to make the best of an extreme downgrade to one of my favorite programs is tough…

Speaking of, check out Gary’s post from earlier today comparing United’s new charts to Delta and American- How Do United’s New Award Charts Stack Up Against American and Delta?