Dealing with Dynamic Award Pricing on Airlines

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As I mentioned in Friday’s post, United is changing to dynamic award pricing. Delta already went there a few years ago, and American is rumored to be following this trend soon. As miles and points travel hackers, how can we deal with dynamic award pricing on airlines?

Dealing with Dynamic Award Pricing on Airlines

Photo by Gem & Lauris RK on Unsplash

What’s So Bad about Dynamic Award Pricing?

When airlines throw out the standard award chart, it’s very difficult to plan and predict how many miles it will cost to book flights. Domestic one-way flights on legacy airlines used to be 12,500 miles each way. Now, they could be as low as 5000 miles or as high as 30,000 miles or more. For some of us Type-A planners, this is pure torture.

Sure, the price of some flights will go down. Off-peak economy award pricing could become a real bargain. But the most coveted flights will increase in price. Forget about getting a great price on business class for an international flight.

Unlike the award flights on Southwest that are correlated with price, these dynamic awards do not directly follow cash price fluctuations. For example, you could pay double the amount of miles for a flight that is only 20% more in cash than another flight. Ugh.

So in light of this change, what should we do?

Dealing with Dynamic Award Pricing on Airlines

Photo by Asa Rodger on Unsplash

Book AA Awards Now

If you have a stash of AA miles and you have a big trip in mind, I suggest booking that trip very soon. I’d be more surprised than not if AA doesn’t move to dynamic award pricing in the next few weeks or months.

For many of us, we are in the 11-month window to book next year’s spring break flights. I expect spring break dates to have higher pricing in a dynamic model.

Look for Partner Awards

The good news about dynamic award pricing is that so far, partner award pricing is not affected. So in the dynamic pricing model, if you have AA miles and you want to book a flight to Australia, you can potentially use fewer miles if you fly there on Qantas, an AA partner.

This is easier said than done, though. Some partner airlines don’t show up on AA.com (see this cheat sheet). And on United, partner awards may fall to the bottom of the search screen. So, booking these lower-priced partner awards requires more effort on our part.

Dealing with Dynamic Award Pricing on Airlines

Flexibility. Photo by David Hofmann on Unsplash

Embrace Flexibility

As miles and points travel hackers, we’ve always had to be somewhat flexible with booking award flights. Rarely is the exact flight we want on the exact date available for the lowest award price. But now, we have to kick our flexibility up a notch to maximize the value of our miles.

Some of us with older kids who can’t miss school have very limited flexibility. But, we have to work with what we’ve got. For my family, that means being flexible on which day we leave at the start of spring break and which day we fly back. Maybe we can’t do the traditional Saturday to Saturday trip, but we’ll have better luck with lower award prices if we leave on a Monday or Tuesday. During peak holidays, we may have to fly out on Thanksgiving Day rather than the days leading up to the holiday.

For those without such rigid calendar restraints, flexibility might include traveling to destinations during the off-season or changing destinations based on the dynamic pricing. For example, I’m currently in the throes of booking a trip for next year’s spring break. I have two destinations in mind, and I am letting award flight availability be one of the determining factors in our final destination.

Diversify, Diversify, Diversify

Diversifying your miles and points stash is more important now than ever before. Don’t just collect one currency for a big trip, collect as many as possible. This is crucial now that airlines are doing away with award charts.

For my spring break trip next year, I’ve got AA miles, British Airways Avios (mostly transferred from my Amex Gold card) and some Chase Ultimate Rewards. I’ve also got a few points in my Capital One Venture Rewards account. I’m counting on AA miles being useful for one direction, but who knows if AA will start dynamic award pricing before I’ve booked my trip?

Having flexible points is going to be important in the future. Cards like the Barclaycard Arrival Plus, Capital One Venture Rewards and the Terps Visa could help fill in the gaps when airline miles won’t cover the entire journey.

I don’t plan to stop accumulating legacy airline miles, though. If I get another targeted Delta flyer in the mail without the once-in-a-lifetime-bonus restriction, I wouldn’t hesitate to apply. I will likely do another round of AA cards in the future when I am eligible. For families like mine who fly in coach, I’m not convinced the sky is falling with these changes to airline award flights.

How are you dealing with the news of dynamic award pricing from airlines? Has it affected your plans already?

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Author: Nancy

Nancy lives near Dallas, Texas, with her husband and three kids. Her favorite vacations include the beach, cruising and everything Disney.

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4 thoughts on “Dealing with Dynamic Award Pricing on Airlines

  1. If you collect miles to book two first class seats to Asia, this is a disaster. But for me, there may be a silver lining to all of this.

    I’m sure I’ll be in the minority with this opinion. But for those of us who mostly fly with our families for domestic or short international trips and confined to the school schedule, this might work out for the better. Finding saver awards for 5 people (even in economy) that don’t involve a 6:00am flight with two layovers on a Tuesday is difficult. International premium awards? Fuggetaboutit.

    So the choice typically becomes either 25k points RT or 50k. There’s no in between. Compare that to Southwest which is tied directly to the cash price which yes, does fluctuate, but we’re usually flying them because the points needed for a flight are typically a happy medium compared to other airlines. Granted, the others are moving to a system where they can make the points worth whatever they want at any time and I understand the concern there.

    Time will tell I guess.

    • @project my thoughts exactly. I think it may work out better for my family of 4. I’ll just keep collecting points and miles, and hopefully, I can continue to redeem them for economy flights.

  2. I do hope it works out better for families who fly economy. I’m mainly worried about it affecting spring break flight prices. I’m not as worried about summer since it’s more spread out.

    • I understand the concern, but it still wouldn’t surprise me if it works out for the better given the scenario I described. It all depends on how they value the points. I know this… I was looking at flights on Delta over Christmas break to FL destinations and was seeing 2 cents per point, which is extremely higher than the average.

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