United Increases The Price Of Many Partner Awards…..Again

You’d be forgiven for feeling like this is a dejavu moment.  After all, it was June of last year when United quietly increased the price of many award flights, including both on their own planes and partner flights.  They did it without notice, the standard airline play book.  Fast forward 11 months and there are widespread reports of another increase on United award pricing.  This change seems to focus on partner airline business class award pricing.

As was the case last June, I don’t see the changes quite as widespread as some others report (though the new pricing is quite prevalent).  I do see some patterns, but I don’t know if there’s logic behind them.  Let’s look at a few examples.

Here’s an example showing two different United partners pricing differently for the European segment.  As a general rule, I found Lufthansa had the least amount of increased award pricing.  In this example, Aer Lingus is pricing 20,000 miles higher in business class.  But, I still found a decent handful of dates where “saver” awards were available on partner flights.

Intra-Europe flights saw increases  on many days and many flights.  The top pricing for business class now seems to be as high as 49,500 miles one-way.  This is a shockingly bad value in that most “business class” flights in Europe are a standard coach seat where the middle seat is blocked.  That being said, Lufthansa can serve you a hot meal (that actually tastes good if you like lots of mayo) along with two drink services on a 90-minute flight.

Lufthansa continued to be the airline partner that showed the most “normal” pricing for business class awards, where Austrian showed up defaulting to the highest rates in most searches.

These are both Lufthansa segments versus….

These are either one or both segments on Austrian.

Lastly, I took a quick look at Asia:

I was looking at these awards recently for an upcoming family vacation.  400K business class awards (on United metal) were most certainly not a part of my recent searches.  That’s an absurd amount of miles by any measure.  But, don’t worry, they discount it every once in a while.

Why Do Airlines Increase Award Prices In This Fashion?

As I discussed the last time United increased award pricing, airlines generally institute larger price increases on award flights on a less frequent basis than paid tickets.  There are obviously different market conditions for paid flights.  However, over and over again airlines seem to choose this blunt force method for changing pricing.  Larger price increases almost certainly have a greater chance of being noticed by customers.  If they notice, their behavior may change.  Airlines seem to believe strongly enough that their practices don’t impact customer behavior in a meaningful way.

How Should You React To These Changes?

For many folks, the majority of airline miles they earn are via credit card spending, not actual flying.  If you were to hold a popular United credit card such as the Explorer Card, you’d earn 2 bonus miles per dollars spent on United flights.  That card also 2 bonus miles per dollar on hotel bookings through the United portal and 2 bonus miles per dollar on dining.

If you got the Chase Sapphire Preferred instead, you’d pay the same $95 annual fee and get a much better return on your spending.  You could earn 5 points per dollar booking those flights through the Chase travel portal (and earn 5 points per dollar on other travel booked through the portal as well).  You would earn 2 points per dollar on any other travel you booked directly.  And, you’d earn more points on dining (3 points per dollar) along with 3 points per dollar on online grocery deliveries and streaming services.

United is telling you that they can’t be a reliable source of information about when your miles will be worth less to you.  Their partnership with Chase means you can earn on the Chase Sapphire Preferred and then decide  if United still offers you the best value when it’s time to book your next trip.  If not, you can choose other airlines such as British Airways or Air France.  Heck, you can even transfer to Air Canada and book United flights, sometimes for much less than United offers their own award flights.

Heck, you could also choose the no-annual fee Bilt card (I earn a referral bonus if you use my link) and have similar earning and redeeming benefits as well as some incredible transfer bonuses.

And, if none of those ways appealed to you, you could consider something like the American Express Business Platinum card.  It carries a much higher annual fee but also gives you a 35% rebate on airline bookings when you pay with points (up to 1 million points per year).

The Final Two Pennies

This seems an odd time for United to raise prices on award flights.  Travel seems to be slowing down a bit, though increased business travel demand seems to have mitigated some of the drop in leisure travel.  United is telling us that they don’t believe they need to discount award seats to offer us more value.

The major US airlines have aligned themselves on many key points of their loyalty programs.  Similar earning and redemption options exist across the Big 3, though Delta still has notably higher award pricing on many flights.  As the airlines continue to choose to seemingly raise the bar across the board, we should listen closely.  Credit cards that offer a flexible currency give you the ability to wait and see which airlines cut the most, and which ones offer the best deals.  And, you may just be better off buying your airline tickets and using those points to cover hotel or other costs.

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