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How to win with dynamic award pricing, and make the most of your airline miles

More airlines are ditching their fixed award charts, creating uncertainty for travelers with miles to spend

Summary

Dynamic award pricing can yield cheaper award fares on some less sought-after routes outside of peak travel season. But for the most part, it means getting less value for your miles – and less choice in how you use them. Here’s how to get the most value from your miles despite dynamic award pricing.

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In March 2019, United Airlines announced its attention to move away from fixed award charts in favor of dynamic award pricing – an airline loyalty construct where flights no longer cost a fixed number of miles.

To most who follow the airline industry, this wasn’t a huge surprise. After all, Air France/Flying Blue also switched to dynamic award pricing instead of fixed awards in 2018. Hawaiian Airlines followed United in April 2019 when it switched to a more variable form of award pricing.

And, as many people know, the Delta SkyMiles program axed its award chart years ago. In other words, dynamic awards are nothing new.

See related:  5 times you should book travel through your card’s travel portal

The problem with dynamic awards

But that doesn’t mean these new changes are welcome in the airline loyalty world. According to credit card and travel expert Jason Steele, any move toward variable awards is mostly bad news for consumers.

Sure, dynamic award pricing can yield cheaper award fares on some less sought-after routes outside of peak travel season. But for the most part, dynamic award pricing means getting less value for your miles – and less choice in how you use them.

One of the biggest problems with dynamic awards is “travelers have no idea how much an award should cost, so they can’t save toward a goal,” said Steele. Imagine you’re trying to rack up miles for a trip to Italy or a honeymoon in Bora Bora. With dynamic award pricing, you have no idea how many miles you’ll need to save – or if reaching your goal is even possible.

This leaves consumers in a precarious position, since they may be racking up miles for flights they’ll never be able to afford. They can compare award pricing with airlines ahead of time to get an idea, but that doesn’t mean the prices will be the same once they have the miles to book.

Another problem is the potential for premium award cabin fares to spike, as most probably notice is the norm with the Delta SkyMiles program. You can frequently find international flights on Delta that are downright reasonable in economy, whereas a Delta One fare on the same day costs significantly more miles.

Here’s a good example: Searching in October, you can find round-trip flights on Delta from Indianapolis to Paris for 44,000 miles in the main cabin. If you want to fly Delta One, however, the same flight will set you back 640,000 miles!

That’s just an example, but this is exactly what consumers can expect from dynamic pricing, says credit card rewards expert Ariana Arghandewal of Point Chaser.

“Those wishing to save up miles for a business or first-class award will end up paying substantially more under dynamic award pricing versus fixed award charts,” she said.

Worse, they may not even know it until it’s far too late.

How to make the most of dynamic awards

Still, it’s not all doom and gloom, and there are some situations where consumers could come out ahead. For example, travel rewards expert Caroline Lupini says programs with variable award pricing tend to forgo blackout dates.

“If you want to use your miles over Christmas, you’ll pay a lot more to do so, but it will likely be possible,” she said.

And, as previously noted, dynamic award pricing tends to yield some pretty good deals on less popular flights and award fares outside of busy travel season.

There are also some steps consumers can take to ensure they’re getting part of the upside of dynamic award pricing instead of just downsides. Here are some expert tips:

Diversify your stash of airline miles

Money and travel writer Ben Luthi says he continues earning airline miles with a handful of airlines instead of just one. This strategy makes it easy for him to check itineraries with different airlines to see which one offers the best value per mile.

Of course, this tip works best if you have some flexibility in terms of when you fly and on which airline. Luthi said he flies mostly within the U.S. and, since the flight options he has to pick from are abundant, he doesn’t have to be picky.

Earn miles with flexible programs

Lupini recommends earning miles with transferable points programs like Chase Ultimate Rewards, American Express Membership Rewards and Citi ThankYou points.

“If you earn these points, you’ll have a lot more options when it comes time to book your ticket because you can take advantage of multiple transfer partners,” she said.

Take the Chase Ultimate Rewards program, for example. When you earn points with Chase Ultimate Rewards, you have the option to transfer points 1:1 to several airline programs including United MileagePlus, Southwest Rapid Rewards and Air France/Flying Blue.

Since flexible programs also let you book travel directly through a portal with your points, you’ll have even more options available. You can log into the Chase Ultimate Rewards portal and use your points to book flights with any airline on any date, and you can get a percentage of your travel for free with certain Chase credit cards such as the Chase Sapphire Preferred Card (25 percent more travel) and Chase Sapphire Reserve (50 percent more travel).

Focus on partner awards and airlines that offer concrete award charts

Don’t forget that not all major U.S. airlines have switched to dynamic award pricing – at least not yet. American Airlines is the last major holdout so you could focus on earning miles with this program for now.

Also remember that some U.S. programs still offer award charts on partner awards, so you can maximize your miles there if you’re familiar with how to use them. Steele notes United MileagePlus still offers “a lot of value” in its partner awards. Also, “many foreign programs still adhere to award charts,” he said.

To ward off huge award price increases, now may be the perfect time to become familiar with airline partners so you can figure out how to use them to your advantage.

Use an award booking service

Finally, if you truly cannot figure out how to use your miles due to dynamic award pricing, or if you just need help finding the best deal, Lupini suggests using an award booking service like Award Magic or Juicy Miles.

Services that help find award bookings usually do so for a flat fee of $100 to $150, and they are often able to find the best premium cabin seats for the dates you want.

Of course, this only helps if you have enough airline miles to book a premium fare – a feat that may become more and more difficult as dynamic award pricing takes hold.

See related:  Fly off-peak to maximize airline travel points

The bottom line

Airlines are going to do what they want when it comes to their loyalty programs, so there’s no use complaining about the number of miles required for a “free flight.” The best any of us can do is be strategic with our spending and ensure we’re earning as many miles in the right programs as we can.

Still, Arghandewal says there’s one tip everyone who pursues airline miles should follow.

“Earn and burn,” she says.

In other words, earn miles quickly and redeem shortly thereafter to protect against devaluations. If you’re continually building up a stash of miles but never redeeming, you can be certain your rewards will be worth less and less as time goes on.

Finally, don’t forget that it may not be too late to get ahead of dynamic awards. You still have some time with United – the airline doesn’t plan to do away with its award charts until Nov. 15, 2019.

“If a program you’re saving miles with is transitioning to a dynamic award chart, be aware of the date and put your miles to use before that,” says Arghandewal.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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