United Airlines Devaluation for MileagePlus Award Tickets

United Airlines has recently announced a devaluation to its award chart with changes taking place as of February 1, 2014. While previously awards were just priced by region and the airline carrier was irrelevant, this is about to change. United Airlines has broken its awards into a two-tier system. The Star Alliance partners now have their own award chart and flying on partners, especially in first class, can cost far more miles than it did previously.

Current United Airlines Award Chart

New United Airlines Award Chart

The only comforting thing we can say is “it could have been worse.” Given the changes, we did get plenty of notice. We have until January 31, 2014 to book our award tickets at the old rates. Given that many partners release award space as much as 11 months out (though not Lufthansa First Class), it’s still possible to book trips with current rates all the way through the end of 2014. That means that, if we want to fly to Europe in business class next summer, it will still cost the 100,000 miles. The downside, of course, is that we won’t be able to make changes to our tickets in case new seats open up.

In my opinion, the best way to hedge against devaluation is to avoid large balances of illiquid miles. I think of a trip I’d like to take and then I plan to organize the the miles for it. I try not to have idle miles or idle hotel nights that I can’t reasonably use within 6 months. If you don’t have large miles balances, then your miles assets can’t go through a massive devaluation.

Let’s first summarize the changes and then break them down by region. Some are worse than others and I’m going to highlight a few different sections. Since there isn’t anything particularly “good”, I am going to call these: the reasonable changes, the bad changes and the very bad changes.

The reasonable:

• Most Coach class award prices are staying the same or not going up very much. The exception is round-trip economy award tickets to southeast Asia, which are going from 65,000 miles round-trip to 80,000 miles round-trip.
• Most awards within the Americas (North America, Caribbean, South America) have little change.

The bad:

• The award tickets I tend to book most are those to Europe in business class, where I fly the BusinessFirst United two-cabin plane. Previously, these cost 100,000 miles round-trip. They will now cost 115,000 miles round-trip. 15,000 miles more isn’t super drastic so a flat-bed to Europe is still affordable to me.
• For the most part, business class awards outside the Americas are going up, but

The very bad:

• First Class flights on most partner airlines are going up very very significantly. This is affecting every region except the Americas. That means those aspirational Thai Airways first class flight to Asia is now going to cost 260,000 miles round-trip as opposed to the old 140,000 miles round-trip.

The Americas

As we can see, there is little change on the award chart covering the Americas. The big negative is that Alaska is now its own region whereas it was previously lumped together with the continental US. If you’re trying to fly to South America, Caribbean, etc, you’ll see little change in your miles balance.

Europe/Middle East/Africa

The economy awards in these regions aren’t changing at all. Moreover, the United Airlines business class flights are only going up 7,500 miles each way. I tend to favor the United Airlines two-cabin BusinessFirst class on my trips to Europe. As I said, that flat bed, is still affordable to me.

The big negatives come from flying business and first class on partner airlines. For Europe, in particular, we are seeing a 63% increase in the cost of miles.

Asia

Asia is among the regions hit the hardest by the devaluation. South Asia (Thailand, Singapore, etc) was previously a nice sweet spot in the award chart at 65,000 miles round-trip. This will now go up to 80,000 miles.

Moreover, the Asian-based airlnes ANA, Thai Airways, EVA, etc. will have their business class and first class awards cost much more. This is definitely a hit to the value of United miles for these destinations.

Oceania/Australia

My Thoughts

How tough the devaluation is on your miles depends on your travel patterns. If you’re a traveler that sticks to the Americas, you can continue to reap good value from United miles and you’ll see little change. If you’re hoping to visit Europe in business class, you will see a hit to your miles value, but not huge.  Asia is where it really starts to get difficult.

While this change is not good news at all, we should keep in mind that United Airlines miles are fairly easy to earn given they are a transfer partner of Chase Ultimate Rewards. That said, given the changes, if you did have some travel plans for 2014 and wanted to use United miles, it may make sense to intensify your mile earning strategy.

And, if you are planning to redeem your United miles before the devaluation, check out some of the ways we’ve optimized our miles for trips for some ideas:

• Success: Three Cousins in “Miles Training” all Book International Trips with Miles and Free One-Ways!
• Miles to Milan: Non-stop Flights in United BusinessFirst Class on the Boeing 767
• How to Add Free One-Way Trips On United Airlines Awards
• Svetlana flies new United Boeing 757–200 BusinessFirst Premium Service LAX — JFK
• We just planned another trip to Grand Cayman with United miles!
• Singapore, Phuket and Tokyo for 65k United miles: 1 roundtrip, 3 girls, 3 destinations
• Cayman, Panama, Rio, Cancun: Svetlana’s Southern Adventures with United Miles
• Saving $1000 with United Miles: Natalya’s trip to Grand Cayman and Cancun