When “Standard” Award Pricing Isn’t So Standard Anymore

For the longest time, airline award pricing was pretty straightforward.  Looking for a domestic “saver” coach award ticket?  If it’s available, that’ll set you back 25,000 miles.  Need to go last-minute or during high season?  Those awards are affectionately labeled with terms like “AAnytime, Standard or Everyday”.  That’ll cost 50,000 miles.  Things haven’t been that way for a long time, but they seem to be bit more, ahem, pricey than I would have expected.

I was trying to help a friend with an award booking yesterday and was looking at flights on the United app from Orlando (MCO) to Washington-Dulles (IAD).  He had mentioned that one-way award pricing in coach was 32,500 miles.  I kinda, sorta didn’t want to believe him.  But, I’ve been around long enough to know it was certainly possible.

That’s a lot of miles for a short one-way flight that can sometimes be found as cheaply as $30 one-way.  But, it’s spring break.  That would likely mean flight prices were sky-high.  Not as high as I was expecting.

Sure, $1300 is a lot to spend on a one-way flight from Orlando to IAD.  But, $327 looks like a “deal” compared to 32,500 miles.  That’s essentially a penny per point.  It gets a bit worse on some of those connecting flights, which were also priced at 32,500 miles one-way.

The Final Two Pennies

It’s not terribly surprising to me that United would be pushing the award pricing during a high-demand season like spring break.  Orlando is one of the most popular spring break destinations for families.  But, where they seem to be using a scalpel to price paid flights, they seem to be using more of a chainsaw approach on award flights.  Pretty much everything is priced at 32,500 miles regardless of the cash price.

I had been noticing trends recently that seemed to indicate United was dropping saver inventory closer to booking.  This is another data point, though I’m not sure if the results are intentional.  For all I know, someone in yield management set all spring break MCO flights to a level that would discourage award bookings and then moved on to other tasks.  Hope nobody needs a last-minute award flight from Orlando.

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6 Comments

  1. “. . .trends recently that seemed to indicate United was dropping saver inventory closer to booking”

    By “dropping” do you mean removing, or adding inventory. Some words’ dual meanings confuse me. Thanks

  2. I wish that this was more surprising. Regarding frequent flier programs, it’s been an awful long time since there was unmitigated good news. Considering that these programs are all money makers, it seems like corporate greed has just run amok.

    1. Christian, the push for profits by shareholders is a constant force here. Quarterly earnings dictate executive wages. Building long-term customers is generally not a net positive with short-term profit.

      1. Unlikely as it seems, I don’t suppose that you have some way out of this quagmire. Are there any businesses that have even found a way to address this super obvious problem? Maybe deferring bonuses to reflect long term interests? I hold shares in a number of companies, but short term performance can be extremely misleading, so while I don’t completely ignore the short term, I tend to view investments in the long term. Any business that looks primarily at short term results is one that I’d try to avoid investing in.

        1. Christian, I think there are long-term metrics most public companies could use to help determine compensation. There are balance sheet items and other indicators that you could use to balance out quarterly share price.

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