Are United MileagePlus Miles Increasing In Value, For All The Wrong Reasons?

There’s no denying that the miles & points world has changed a lot over the years, and in general, miles have become less valuable and compelling. We’ve seen award pricing devaluations, fewer award seats available, and an increasing number of restrictions on who can book award seats.Going back several years, I had largely written off MileagePlus as a useful program on the redemption front — the airline made the same award space available to partner programs as it did to its own members, all while constantly devaluing miles.However, it sure seems like the tides have turned — not because United has actually made MileagePlus miles better, but because the airline has changed how it releases award space, and I imagine it’s driving the kind of behavior the airline is hoping. I’d like to discuss that in a bit more detail in this post, because it’s a take I’ve also been hearing from plenty of others in the OMAAT community. United’s punitive award changes make MileagePlus miles more valuableHow much are United MileagePlus miles now worth?Bottom line United’s punitive award changes make MileagePlus miles more valuableI’d say the past year or so has been pretty transformative for the value of United MileagePlus miles. Back in the day, United released most of the same saver level long haul business class award space to members of partner frequent flyer programs as it did to MileagePlus members.This of course created lots of arbitrage opportunities for booking United award tickets, since you’d typically find the best award rates by booking through a partner program, rather than through MileagePlus. However, United has made major changes to this system:First, United stopped releasing a vast majority of Polaris business class awards to partner frequent flyer programs, so they’re now limited primarily to MileagePlus membersAt the same time, United award pricing through frequent flyer programs other than MileagePlus increasingly became dynamic, clearly because United is trying to drive business to its own MileagePlus program, and avoid arbitrage opportunities with redemptionsThe airline took it a step further by making most reasonably priced award space available exclusively to those with MileagePlus elite status, and/or those with a co-branded MileagePlus credit card, further encouraging profitable behaviorUnited MileagePlus award availabilityUnited MileagePlus award availabilityThe way I view it, United hasn’t actually directly made MileagePlus miles more valuable. I mean, we’ve seen endless devaluations to partner award redemption rates, and it’s not like awards on United metal are materially cheaper than they used to be. But United has instead made MileagePlus miles more valuable through a combination of being more punitive, and based on general industry trends:While United might not have the world’s best inflight product, the airline is by far the most global of the “big three” US carriers, and actually flies where many people want to go, and where people aspirationally want to redeem their miles toTherefore there’s value in having access to that route network for premium cabin redemptions, and if you want that, you need to go through MileagePlusThe general reductions we’ve seen to award availability and award pricing across programs makes this award space more valuable as well, since pickings are slimmer than in the past; for example, you can’t even redeem partner miles for Lufthansa first class anymoreWhile I absolutely hate this trend as someone who loves to maximize miles and create multi-partner award tickets, there’s no denying that United’s changes actually align with the goals that airlines have for their frequent flyer programs — United doesn’t mind members getting a good deal, as long as they’re “invested” enough in the airline, through elite status and/or a co-branded credit card. I also have to acknowledge that this is a sentiment that’s increasingly reflected by those in the OMAAT community — over and over I hear people say that they find United miles more valuable than in the past, and that just comes down to changes intended to encourage a certain type of behavior.There’s value in having access to Polaris business class awardsHow much are United MileagePlus miles now worth?I publish my valuation of loyalty program points currencies, though I always acknowledge that this is subjective, and that there’s no right or wrong way to go about it. I try to be balanced in my valuation of various currencies, and also try to be conservative, so that people don’t hoard their points too much. I also take a relative rather than absolute approach to valuing these currencies, as I’ll explain in a bit.Back in 2023, United MileagePlus devalued a lot of its partner award redemption rates, and I lowered my valuation of MileagePlus miles from 1.3 cents to 1.1 cents each. As a point of comparison, I value Delta SkyMiles at 1.1 cents each, and American AAdvantage miles at 1.5 cents each.Some might say that was a harsh valuation, but my logic was as follows:There were few redemptions, including for travel on United flights, where MileagePlus actually offered the best redemption values, so that limited situations where earning the currency made a lot of senseWhile we often rag on Delta SkyMiles for the lack of value you get with high end redemptions, SkyMiles also has the highest “floor value” of mileage currencies among the “big three,” given the ability to redeem them toward the revenue cost of a flight at a decent ratePartner award redemptions had largely been devalued to the point that they were 20-50% higher than booking through other programs (with some exceptions, like the good value of redeeming MileagePlus miles to Africa)Anyway, I think it’s probably time to reassess the value of MileagePlus miles, and increase my valuation. Some may say “well wait a second, if the redemption value of the miles hasn’t actually increased, how can you increase the valuation?” This gets at how I value miles on a relative basis, rather than on an absolute basis. You see, I don’t play this BS game people have, where they claim “I redeemed 60K miles for a $9K ticket, so I got 15 cents of value per mile.” There are many issues with that logic. For one, using inflated one-way revenue ticket costs to determine the value of an award is just bad math. Beyond that, though, I like to value miles based on what I would reasonably pay for that ticket, rather than the retail cost (and this is why I say everyone should have their own value of miles, since we all value these things differently). I guess to put it simply, if someone claims they’re getting 15 cents of value per mile, does that mean they’d be willing to buy miles for 10 cents each? Something tells me the answer is “no.” So my valuation of miles comes from a rough analysis on how much I’d be willing to pay to acquire miles, while acknowledging that there are lots of factors.There has always been value in getting access to United’s long haul route network for premium cabin awards. But the reality is that you now need a different mileage currency than in the past to unlock those seats, and that has to be accounted for in the valuation.So I’m curious, how much should we now value United MileagePlus miles? I’m tempted to say they’re worth around 1.3-1.4 cents each (I try to be conservative with my valuation), but I’d love to hear what others think, before officially updating my valuation.I hate to “reward” programs for making what amounts to punitive changes, but I also have to be realistic about the reality of things. I think United is playing this all in a very smart way, given the goal of increasing loyalty program revenue.United’s MileagePlus changes are smart for the company’s bottom lineBottom lineIn absolute terms, we’ve seen the value of MileagePlus miles devalued significantly in recent years, in the sense that the program has increased redemption rates, particularly for travel on partner airlines.But over the past year or so, United has particularly been trying to make the MileagePlus program more valuable and engaging, and that has come in the form of making award space more costly and less available when booking through partner programs.Nowadays MileagePlus really offers value if you have elite status or a co-branded credit card, because that’s what’s needed to unlock premium cabin award seats on the airline at a reasonable cost. It has gotten to the point where if you want to redeem for long haul premium cabin award seats on United, MileagePlus miles are the currency you need.The reality is that you want access to United long haul awards, given the carrier’s massive global route network, plus how much harder it keeps getting to find premium cabin award seats through other programs.So personally I think my valuation of MileagePlus miles has gone from around 1.1 cents each, to around 1.3-1.4 cents each. While I don’t like it, this is one of those cases where a program being punitive toward others has legitimately increased the value of miles… at least as I see it.What do you make of the evolving value of United MileagePlus miles?