United’s Devaluation of Their Point System
If you’re a loyal United Airlines’ customer, you are about to discover that those points you’ve been racking up, booking business and vacation trips through your favorite airline, are going to be devalued. Starting February 1st, 2014, all points will be award and utilized at a much, much lower rate, bringing despair to those who have spent the entire year saving up points for a Valentine’s Day getaway. The new system is long and complicated, and can be viewed fully here, but suffice it to say that whatever points you have earned aren’t going to serve you as well in the coming year.
Just to give you an idea of how bad the devaluation is going to be, what once cost 10,000 miles to book, will now cost at least 40,000 miles to book. Plus, the amount of miles it takes to step up from economy class to business class, has jumped significantly. To fly to India, for example, you might be able to book an economy flight for 5,000 miles, but you’ll have to dole out 40,000 miles to get a business class flight. That’s on top of the 120,000 miles you have to earn before you can use any miles at all.
Most purchase rates have doubled, but some have tripled or even quadrupled, which is astounding. What’s really disturbing about this, however, is that United has the monopoly on many destinations. Dusseldorf, for example, can only be reached directly through a United Airlines connection. To pay for that flight with miles, you have to shell out over 200,000 of them. At the same time, to destinations service plenty of other airlines (like Frankfurt), fliers only have to dole out 160,000 miles. Anyone who is paying attention can see that United is wringing their passengers for extra miles where they can.
While this devaluation is not completely unprecedented, it is surprising, especially to people who are members of United’s loyalty program, who have flown regularly with the airline, it seems more than a little outrageous that they should take away the benefits their loyal customers have been busy earning. Of course, hotel chains and other airlines have been doing the same thing since the beginning of the year, as the number of people traveling continues to rise.
Most experts recommend with any airline’s miles program, to earn them and then immediately use them, instead of holding on to them. They’re not an investment, they’re a quick reward. As more and more travel and hospitality companies jump on the devaluation bandwagon, it seems that the best plan of action is the use rewards as soon as they are credited to your account, instead of waiting to rack up a huge number in the hopes of some additional reward. In the meantime, diversifying your airline holdings (flying with many different airline), can help you start to earn points on airlines that haven’t yet dropped the value of their points.