The United Airline miles Devaluation of Feb 1, 2014

The massive United miles devaluation chart of 2014 news reminds me of some realities:

  1. Reward miles and/or points is on a path of devaluation, not appreciation.
  2. Use the reward miles wisely and as fast as we can, because the reward miles/points depreciate much faster than US annual inflation rate (~ 2%).  They do not depreciate every year.  The depreciation announcement comes once in every two or three years.  Each time it is certainly much more than 2%.
  3. Although an unwelcome decision to most, if not all, United frequent flyer program participants, it is a wise business decision for United.  

United might have learned from its redemption statistics that United members like flying its partner flights, and it is relatively difficult to earn enough American Airline miles or American Express membership miles for redeeming above-economy/coach-class international flight tickets.  People who keep on flying United will likely keep on flying.  People who fly United partner flights may continue to earn United miles, depending on which airline partner.  For example, Eva Air requires 100K Eva Air miles to redeem one-roundtrip Economy/Coach flight ticket between Taiwan and US, plus USD $300 surcharge fee.  Eva Air miles also expires every 4 years.  I do not know any way to extend the mile expire dates.  Cathay (partner with American Airline) fares a little better; it requires 60K Asia miles.  It still comes with USD $300 surcharge fee.  In contrast, United (and American Airline) miles never expires with easy participation in its dining program.

And so ?

Instead of stopping to collect United miles, I would recommend to continue to collect United miles when it comes free (United card sign-up bonus, dining bonus, Fidelity bonus, United shopping mall bonus, Ultimate Reward shopping mall bonus).  I would use these miles to redeem for United partner business-class flight tickets.  It is also possible, because of this massive devaluation,  more United/United-partner First-class flight tickets may become available, because its redemption requirement is hefty.  (Eva Air First-class and Singapore First-class have not been available to be redeemed by United miles.)

Although a bit disheartening, the massive devaluation is certainly not the end of free Economy/Coach-class flights, whether of United or its partners.  For example, devaluation early this year was not the end for Hilton HHonors program.  We still had many good times from using Hilton HHonors points after their massive devaluation.  Indeed, we lost the viable option to redeem for premium Hilton hotel rooms.  Decent standard rooms have been well within reach.  Each night stay saves an average $150.  That said, United miles are still useful.  One thing for sure, redeeming United flights are still excellent deals for emergency flights, which I certainly do not look forward.

Do not purchase United miles anymore unless you will use them immediately.

To find out how many United miles are required before Feb 1, 2014, see interactive United award estimation

For after February 1, 2014, check out the United award charts.

I hope, that United would understand devaluation is not an effective way to gain loyal customers. Providing a top-notch United flight quality (service, timeliness) would be the best way and many of us would look forward to.

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