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United has raised Award Anytime rates yet again edging ever close to Delta’s nosebleed high pricing, but forgets a few key elements.
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United Raises Anytime Award Rates
As covered by Live And Let’s Fly’s own, Matthew Klint, United has raised the number of United MileagePlus miles required for Anytime Award flights. From my own research, it appears that saver awards in business class and economy awards appear to be intact. It doesn’t seem to matter whether the traveler is redeeming United miles for partner airlines, nor if they have elite status. United Airlines credit card holders may receive a discount of up to 60% off, in essence returning that Anytime Award to its standard award chart pricing.
There are dynamic awards that still exceed the 200,000 Matthew and I found most commonly in last minute business class space. One result came in at 245,000.
Some involve Star Alliance partners and some not. United award travel can be particularly beneficial when using the United Excursionist Perk allowing one to add another destination in the same region for just the taxes and no additional miles.
United personal and United business cards are issued by Chase which also allows transfers to the program from the bank’s Chase Ultimate Rewards program. Recently, sign-up bonuses for Chase’s flexible currency cards like the Ink Preferred have seen elevated levels, in some cases, all-time-highs.
Delta’s Model Mostly Works With High Award Redemption Prices
Delta has been charging rates even higher than this for the last couple of years. The carrier routinely charges 375,000 SkyMiles even when the aircraft is mostly open. Here’s an example on the same day next week with options both on Delta and partners for the same rate in business class. This flight has seven seats on sale in business class and still, the carrier doesn’t want to fill them for less than 375,000 SkyMiles.
Even in economy class, Delta is asking 120,000 miles for the roundtrip on the same relatively open plane, there are plenty of fare buckets with nine (or more) seats available (the airline will only show nine seats and no more.)
What’s crazy about that is travelers earn United miles (and American for that matter) at approximately the same rate as Delta. The same is true for those using credit cards to earn their points. A dollar spent on an American Express Delta credit card earns the same as a Chase United credit card.
But for just 40,000 more points on United, cardholders could being lying flat on United. For even fewer points than coach (often 115,000 return) travelers could be flying business class on American Airlines, or the same partners with Alaska Airlines for about the same.
Yet, the backlash from Delta flyers has been relatively limited over the years, with the only significant disturbance concentrated around still higher status requirements and less access to Delta lounges.
Delta’s Advantages
Hubs
Delta benefits from a few key differences. United and Delta compete heavily for a share of the New York/Newark market. United has a large concentration at LAX but Delta competes there too – so does American and Southwest. Delta shares Atlanta a little bit with Southwest but mostly owns the world’s busiest airport. Salt Lake City and Minneapolis are also fortress hubs for Delta while the carrier mostly owns Detroit too, but Spirit is a significant factor. United owns Houston, well, Houston Bush, but loses plenty of share of the market to Southwest at Hobby. United’s largest presence is at Denver where Southwest and Frontier also call Denver a hub. It splits Chicago with American Airlines at O’Hare and Southwest at Midway. United’s greatest single hub might be San Francisco, but doesn’t route as much connecting traffic through the Bay Area as Delta does in Atlanta. Delta has greater ownership of its markets.
Delta has also crept up the cost of its redemptions over time to the staggering level they are at today. They have become their own punchline but no one seems to care that they earn SkyPesos.
Banks
The airline’s most significant financial advantage is its relationship with American Express. Not only did the bank sign a lucrative exclusive deal, but the card is on-pace to generate $8bn for the carrier in 2024 alone in pursuit of a $10bn goal.
While United hasn’t been as bold about its deal with Chase, it signed its last extension in 2019 just before the pandemic and at that point, the airline was already lagging behind its peers at American and Delta. That extension, which it disclosed adds $400MM annually to the coffers, is thought to be significantly inferior.
Where Delta remains far ahead of United is in the transferable currency space within the American Express Membership Rewards program. American Express cardholders are less likely to use domestic US partners Hawaiian and JetBlue which has a poor exchange rate and limited national utility. In Chase Ultimate Rewards, United and Southwest are both transfer partners, but Southwest is a far larger entity than either of the other two.
Delta Runs A Great Airline
With the exception of Crowdstrike week, Delta runs a better airline than United. It’s more profitable, its planes are more often on-time, and they lead the way in competing on product. Delta was the first US carrier (outside of JetBlue) to offer sliding doors in business class, it gives away internet to Skymiles members without any status at all, at a time when American is removing seatback entertainment, Delta is ensuring every aircraft in its mainline fleet offers it.
Conclusion
United hasn’t completely surpassed Delta for absurdity but it has outpaced all other North American rivals. When looking at transferable currencies, United is more routinely 2x higher than Aeroplan, American, or Alaska on long haul premium awards with just Delta charging more. And while American does charge very high rates on its last available inventory, United is charging 245,000 miles on a flight with eight seats available for sale in business class on short notice. But United doesn’t have a better product in the sky, it doesn’t have a more reliable operation, it doesn’t own its core markets as convincingly and its membership is clearly less engaged than either Delta or American as evidenced by struggle with Chase. If United wants to charge more for Anytime awards it needs to make fewer awards Anytime (like those with eight seats open) and it needs to operate a better airline.
What do you think?
