Yesterday it was announced that Continental and United Airlines are aligning their award charts for flight redemption. Initial reviews were mixed (Lucky didn’t think it was so bad; neither does Gary) and ultimately I think that mixed is the best way to see the changes. There are some good and some bad. But from my view the bad ones are REALLY bad. There are a couple awards that have gotten VERY expensive. Fortunately, however, it seems that there are workarounds in many cases.
First, the background. The changes take effect for awards booked on or after 15 June 2011. Until then the old charts for Continental and United still govern. This means there is still room for arbitrage on certain awards that are higher or lower cost between the two programs thanks to the points being fungible between the two.
The changes will also remove ambiguity in the region assignments for some countries that currently exist in multiple award charts. That will be quite nice, if not necessarily resulting in lower prices in all cases.
And, on the plus side, there are a number of rewards that are actually getting less expensive. Most notably for me is that tickets in business class between the US and Europe will go down in price from 105K to 100K. Actually a lot of regions are seeing business class awards drop in price for travel to/from North America. Given that the best value in awards is often in these premium cabin tickets this is mostly a good thing. And Asia stays very attractive on the award charts.
Coach awards – where more people actually redeem – have gone up in many regions, including the US-Europe and US-South America. US-South Africa seems to be the only area where the prices went down in coach.
And then there are the scenarios that are VERY ugly in the new charts, mostly with respect to upgrades. Upgrade awards have been losing value for a while now. They used to be considered the best value for redemption a decade or so ago. And maybe they still are for some folks who have someone else buying them full fare coach seats. But if you’re buying your own tickets the value of upgrades continues to decrease. This latest award chart adjustment further hammers that point home.
First, there are the actual mileage amounts. Many categories have seen an increase in the number of points required for an upgrade. A few have remained level. I haven’t found any that have decreased in points required. OK, so it is an extra 5-10K miles round trip for an upgrade. Not a tremendous change but still annoying.
Then come the co-pay fees. The airlines basically have decided that the cheapest fares should not be upgradable. Rather than prevent such upgrades, however, they simply charge a "co-pay" to increase the fare paid to balance out the cash side of the ticket. That’s in addition to the miles required. Pegging a point’s value to a penny – the common, conservative rate – and adding in the co-pay it is actually ridiculous in many cases to buy an upgrade.
The cheapest fares between North and South America require 35K points PLUS $600 each way for an upgrade, on top of the coach fare. That’s roughly $1900 in cash + 70K points, along with the $1200-$1500 (plus taxes and fees) of airfare. Or you could just redeem 100K points for the same ticket. Redeeming for an upgrade is a losing proposition in nearly every case, even taking into account the points earned for the travel and any other benefits you’d get.
I never really considered the upgrade award a good idea. It is now probably the worst value option out there. Very bad idea.
As a parting shot, it is also worth noting that the golden goose of the legacy Continental award chart is also disappearing. The "Around the World" or RTW award from Continental is one of the best values out there at 160/220/280K in Y/C/F. The rates on that award are migrating to the legacy United numbers of 200/300/400K. That’s a 25-40% increase on those numbers. Not a surprise, really. Actually the surprise is that it lasted as long as it did. But still sad to see it go.
Things could have been a lot worse. There are definitely some bright spots on the charts. But, like always, understanding the changes and planning for them will help maximize the value of the points.
- Miles now fungible between Continental and United
- United commits to keeping EconomyPlus in the new fleet
- Continental to charge for extra legroom
- Continental and United announce reciprocity – aka The other shoe drops
- Continental/United merger approved by DoJ
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