United Airlines will introduce a new method to redeem MileagePlus points, but it will take time.
Uniteds new Money + Miles awards
United MileagePlus will launch a new Money + Miles ticketing service on August 25, 2021
Customers can use this combination of miles and money to purchase tickets
To reduce the price of your ticket, customers can redeem as little as 500 miles
The new payment method will be slowly introduced and will only be available in a few domestic markets at first.
I have not yet been able find markets that offer this redemption option, but please let me know if you do. This is a way for customers to redeem miles faster than ever. Customers don't need to store miles for years, United explained in a memo to employees.
United customers now have the option to redeem part miles or part cash towards a ticket
While having more options is a good thing, it can have negative consequences.
Are these new redemption opportunities worth it? Or should we be concerned about their implications? I'm not sure what to think.
For frequent flyers, having more redemption options is a plus. An international business class ticket may seem impossible for those who are not loyal to an airline or don't want to participate in the points game. It might be worth considering using your miles to reduce the price of your ticket. This is an example of the loyalty program Allegiant Air that was just launched. I think it's brilliant, at least for Allegiants customers and business model.
However, there are reasons to be skeptical.
Since this makes it so easy for people to cash out their miles, it is unlikely that the redemption value here will be very high on a per-mile basis.
My concern is that many frequent flyer programs will adopt a revenue-based redemption model. This could lead to lower redemption prices in the future.
United is not the only airline to offer this concept. Delta SkyMiles offers the Pay with Miles option to co-brand credit cardholders. This allows them to reduce their fare by $50 per 5,000 SkyMiles. While United will offer more flexibility (allowing redemptions to be made in smaller increments), it isn't always a good idea for value maximizers to follow Delta's lead on loyalty.
Although I haven't been able find a flight with this option yet, I believe it is a good bet that you won't get more that one cent per mile. I would also speculate that the value might be less (if I had to guess), 0.7-0.8 cents per mile seems about right.
For premium redemptions, this new option won't be very useful.
Bottom line
United Airlines has launched a Money + Miles ticketing option. Members can redeem part of their miles or cash to pay for a ticket. Although this is being slowly introduced in a handful of domestic markets, it should soon be expanded to more.
Although more redemption options seem to be a positive thing, I am always concerned about the larger picture and the potential for programs to become revenue-based and decrease the value of miles.
What do you think of Uniteds Money + Miles award?
(Tip of my hat to @BrianSumers
