United Bonus Miles

An exclusive offer, just for you: Fly your way to 50,000 bonus award miles

My travel is way down this year and I received an email from United offering me 50,000 bonus miles if I spend $6,500 on airfare flown before November 30.  I don’t know if others are getting emails like this and what their targets are, but keep your eyes open for an offer to your inbox. This all seems to follow United’s new “what have you spend lately” take on loyalty.

Spending Milestones

Upgrades are more Difficult These Days

Frequent Flyer Program Points / Miles Inflation

Airline Award Price Inflation

Inflation is a great way for governments to take wealth and reduce their debt. It happens continuously, but no one really notices, so it's a low risk political move.  By creating more currency, the government receives the full value of the new money while everyone's existing money is worth slightly less.  It's something everyone endures, but no one enjoys. 

South American Style Currency

Recent Inflation Victim

Airlines also manage a currency and create inflation. Airlines created their own currency with points programs and have been adding more currency than is being redeemed.  This creates an over supply of currency against a static (more or less) supply of awards.  The unbalanced supply and demand creates an opportunity for point inflation. Airlines manage their currency like Venezuela or Argentina.  There is constant inflation by creating more currency with fixed award opportunities.  They also engage in large and sudden devaluations periodically.  Venezuela has inflation every day, but they will also suddenly change exchange rates.  Both destroy currency value, but the gradual devaluation stings less.  Airlines do the same when they change their award charts (British Airways most recently).  Awards that cost 80,000 miles yesterday can cost 100,000 points today when the award chart changes over.  These massive changes are usually, but not always, announced several months in advance.

More Miles Pursuing Same Seats

Hyper Inflation Airlines

Airlines create new currency, point or miles, at no cost to them.  They sell this currency to partners, like credit cards or hotels and receive real money for their proprietary money.  United Airlines sold $2.9 billion of frequent flyer miles in 2013 and has about $4.9 billion of frequent flyer miles outstanding.  They expect 20% these miles to expire, so the mileage expiration policy creates $1 billion in profit.  They did not disclose how they value a frequent flyer mile.   

“Five million and 4.7 million MileagePlus flight awards were used on United in 2013 and 2012, respectively. These awards represented 7.7% and 7.1% of United’s total revenue passenger miles in 2013 and 2012, respectively. Total miles redeemed for flights on United in 2013, including class-of-service upgrades, represented approximately 80% of the total miles redeemed.” (UAL annual report)  20% of mileage redeemed was used for partner flights, merchandise awards, and other ground based awards. That’s a massive amount of miles chasing relatively few awards and creates a great inflation opportunity.

Costs More and More To Sit Up Front

44% Inflation over 9 Years

When I started collecting United miles in earnest, a round trip to Europe in business class was 80,000 miles.  Then it became 100,000.  Now it's 115,000 on United or 140,000 on a partner.  1,000,000 United miles was worth 12.5 round trips, but is now worth 7 trips.  This is a massive currency devaluation of 44% over 9 years.  Frequent flyers should be marching and banging pots in front of United's corporate office, but I doubt many realize their miles are worth so much less.  Most customers measure their balance by the number of miles in it.  This is a poor indicator of value though.  Viewing it as the number of awards you want (business class tickets to Europe in my example) is a better indicator of value. 

Program Changes Can Reduce Award Balance Value

Reducing Inflation Risk

Collecting miles and points creates an inflation risk.  The more you collect, the larger the risk.  Inflation can't be eliminated, but the risk can be managed.  Here are a few tactics to help support an inflation hedge strategy:

• Collect Points in Multiple Programs – All programs have inflation, but at different rates and different times.  Diversification reduces your exposure to a single program's risk.  It also creates more reward opportunities.
• Spend Points Regularly - A smaller point balance lowers the potential loss of value to inflation.  Also, why bother collecting miles if they are never used?
• Be Aware of Pending Award Price Changes - Don't be taken by surprise, read emails from your programs.  If a change is coming, book at the lower prices if able.  I booked a round trip to Europe before British Airways changed their award chart this year.
• Change Programs if Required - Most airlines have partners and one partner may have a more rewarding and stable award structure.  Alaska miles seem more stable than Delta miles and you can earn either on a Delta flight.
• Set Award Based Goals - Don't set a balance number as a goal.  1,000,000 United miles has a nice ring to it, but it isn't an end in itself.  4 round trips to Europe in business class is a better goal because it has a fixed value while the miles could change value.  Redeem when you reach your goals.
• Create A Single View of Your Assets – Take a look at your award balances on one screen.  Copy and paste into Excel or Gmail if needed.  Looking at your assets on the same page will help you understand where your risks are.  It also may help you be more creative with your awards. 80,000 Delta miles and 62,500 American miles is a round trip to Australia in business class.

I'm A Bad United Airlines Customer

I'm the type of flyer who is crushed by United's new revenue based award miles.  Here's my stats from earlier this year:

MileagePlus Stats

United Destroys The Other Half Of MileagePlus

United is completing their destruction of MileagePlus by changing how mileage earning works.  Starting in 2015, miles earned for flights will be based on the fare price (not including tax) rather than the distance flown.  The new earning method, paired with award price inflation last year, removes any hope of earning a decent rate of return on air travel. It should be easier to redeem miles because far fewer will be in circulation.  I suspect I'll earn more miles on the ground now, even if I fly three or more times around the equator each year.  Maximizing credit card bonus and other earning options will be critical to my 2015 earning strategy.

The Sun Is Setting On MileagePlus

My last sliver of loyalty to United will be from their Million Miler program.  I'm almost 70% to lifetime Gold status and Star Alliance Gold status.  United did change the benefits for their Million Miler program before, I just hope I can cross the 1,000,000 lifetime flight mile mark before they  change it again.

My Postcard to Jeff Smisek

Jeff,

The greatest value of a points program is the aspirational aspect of the awards; the unattainable is now in reach.  The new MileagePlus pricing model moves the unattainable out of reach, destroying the value of the program. 

-Andrew Bussa

Protest Postcard

I feel this is an appropriate method to protest the new MileagePlus pricing model.  You too can write to Jeff Smisek, co/United Airlines, PO Box 66100, Chicago, IL, 60666.

Book It While You Can

I was playing around with fares to get to LAX in April (I'm shooting the Grand Prix of Long Beach) and found DEN-IAD-RDU-IAD-LAX for $215, about 4.5c per elite mile. It was an outstanding deal, but I was hesitant to book a 12:30AM arrival.

It Won't Be There Forever

United solved my conundrum today because the fare is gone. I'm kicking myself now for passing on a great deal (only $116 more than the direct).

United MileagePlus Program Changes in 2013

I looked at the MileagePlus benefits chart today and saw that it was "Effective March 3, 2012 through January 31, 2013."  I'm worried about what changes will be coming.  Airlines are especially bad at announcing changes in advance and program changes tend to be drastic.

United 757 at Newark

UPDATE:  Massive inflation!!!  There will be two award charts, one for United and one for partners.  Premium cabins on partners will not be worth while.  Book now while your account still has value.

IDine & Other Miles for Dining Programs

Miles for nothing, that's the goal, right?  Well that doesn't exist, but there are many ways to earn miles for no marginal cost.  Mileage dinning programs are ones way to pick up miles without spending more.  Just sign up for the program(s) of your choice (see links below), register your credit cards and you are set.  When dinning at a participating restaurant, you earn about 3 miles for every dollar spent.  The miles post a few weeks after your visit; no work required on your end after signing up. I use programs for airlines I don't earn miles in frequently to have another way to reset the miles' expiry date.  You might be able to grab 1,000 bonus miles for joining too.

American Express (Earn Amex Gift Cards) Dinning Program

United Airlines Dinning Program

US Airways Dinning Program

American Airlines Dinning Program

Delta Dinning Program

Alaska Airlines Dinning Program

Priority Club Dinning Program

American and United Jets at DEN

Air Canada to Europe - A319 & 767

A friend from high school called me up late last month wondering if we could do a trip overseas in July.  My schedule had some flexibility to it so I started finding trips we could do on United MileagePlus miles.  We were able to settle on Barcelona, Vienna, and a half day in London for 60,000 miles; a very good deal. 

Air Canada A319 at Denver

The first leg of the journey was from Denver to Toronto to Barcelona.  My friend was originating in Chicago and we planned to meet at the international Maple Leaf Lounge in Toronto.  I was flying an A319 to Toronto connecting to a Boeing 767 to Barcelona. 

The Airbus part of my flight was great.  There was plenty of leg room and a FREE video on demand entertainment system.  The system has a great collection of new and classic movies, along with games, a map, and music.  I watched The Good, the Bad, and The Ugly.  It happened to finish just as we were landing and made the flight go very quickly.

Air Canada's Free Video On Demand

The service was friendly too.  The lead flight attendant looked like a jovial lumber jack that could be in tourism commercials.  I also got a kick out of the bilingual announcements, as required by law, not the makeup of the passengers.

After landing it was a quick walk to the transfers desk, stamp in the passport, and a quick walk to the lounge.  To speed the trip, Toronto Pearson Airport has moving walkways that go faster in the middle than at the ends.  It was my first time using them and it was fun to see the clever solution to an engineering puzzle. 

Air Canada Maple Leaf Lounge YYZ Bar

The Maple Leaf Lounge is on the second level (my friend walked right by it and spent a while looking for me on the departures level) of the international terminal.  This is their flagship lounge and it has plenty of seating broken up into different areas so noise doesn’t travel and to give a more private feel.  It also has free wifi, conference rooms, showers, a business center, and of course self-serve bar and hearty snacks.  The drink spread was very good, but the food was superb.  Air Canada’s lounges have some very good soup offerings and this was no different.  There was also some very tasty pasta available that reminded me of grandma's. 

I left briefly to find my friend and check out the duty free prices.  We were able to locate each other and went to the lounge for a pre-departure toast to our trip.  Our flight had a maintenance delay, so we were able to make a few more toasts before departure.  The aircraft for the trip to BCN was a 767 that Air Canada had not converted to the new business class and video on demand in coach.  The seats also were not very comfortable, so before we pushed back, I knew I was in for a long trip.

Leg Room in Coach on 767, Where's the TV?

The meal service started soon after takeoff and I enjoyed a very tasty chicken dish. The brownie was also very good.  Soon after dinner, I tried to sleep.  It didn’t go well.  I went to the back of the plane to see if any sets of 3 seats were open to lay down on, but enough people already had that idea and I was out of luck.  I wound up taking a set of two free seats, built a pillow fort, and tried to fall asleep.  I don’t know why, but nothing worked.  I might have been out for 30 minutes tops.   After a seemingly endless struggle, I spotted land (Spain looks like the American southwest from the air) and we started our approach.  Landing took us over a few sights and we quickly taxied to the gate, so fast that the crew hadn’t finished the French version of the announcement.  I was soon off the plane, not rested at all, but excited to experience Barcelona.

Tasty Chicken Dinner on Air Canada 767