United Airlines announced that effective immediately, the reward miles you earn on flights or with partners will no longer expire. Previously, you had to have activity in your account, for example from flying or using a credit card, every 18 months to prevent expiration. United follows Delta Airlines, which has had a no-expiration policy for years. While some travel bloggers are looking for the bad news in this, there really isn’t any for travelers, active or not. Find out why this change on its own is good news, but not all is good in United MileagePlus Land…
United Airlines has stopped the expiration of award miles in its MileagePlus program. It is even returning miles that expired in July and August 2019. This is fantastic news for travelers. Infrequent travelers, who might only fly with United occasionally, no longer have to worry about loosing their miles for inactivity. This is especially helpful for non-US residents who might fly United only once a year and were at risk of loosing their miles in case they didn’t fly them for longer…
While this might be less interesting to frequent travelers on United or credit card holders (the United branded credit cards issues by Chase prevented expiration of mileage already), it is good to know, because things can change in life. You may have kids, a change of jobs or move to a city not well served by United – and all of a sudden it’s a lot more difficult to keep those hard earned miles active.
The miles & points community is used to devaluations presented as “enhancements” – like the huge devaluation earlier this year by United moving to dynamic pricing starting in November, which can increase the number of miles needed for an award flight multiple times, based on the cash price.
So, some bloggers and frequent travelers were looking for the bad news in this announcement. One point made is the issue of miles being a liability on the airlines’ books. Others think this change will be reversed in more difficult economic times because of the accounting issue.
But that is an outdated argument. The US GAAP standards for accounting have changed recently: Airlines no longer have to book the value of miles outstanding as a liability, they can book them as deferred revenue based on the estimated value of the redemption. You can read the Ernst & Young audit paper, if you want to dive into the accounting details.
Because the dynamic pricing of awards allows United to define the value of the redemption at their will (and eliminate the fantastic redemption values we have seen & loved in the past), they don’t really have a book keeping problem with never expiring miles anymore. That makes it easy for them to offer an incentive to less active MileagePlus members to fly them again, even if not all that frequently.
Will that work? I think so! I personally avoid airlines that have miles with a hard expiration. For example, all miles earned with Air France \ KLM FlyingBlue or Cathay Pacific AsiaMiles expire 3 years after earning them, regardless of any activity, making it almost impossible for infrequent users to accumulate enough miles for a useful rewards. I also avoid programs that have programs with short expirations, if I’m not sure I can fly them again soon enough.
While this change might not make any difference to frequent United travelers, it will give the millions of infrequent travelers and members of MileagePlus a reason to fly United. Travelers who typically buy the cheapest ticket (and there are many who do) will now have a reason to buy United, when all else is perceived as equal.
The end of mileage expiration in the United MileagePlus rewards program on its own is good news. Does it make up for the drastic devaluation earlier this year? No, over all 2019 has been a bad year for United MileagePlus members, but you gotta be grateful for the little things and this is one of them.
And while your miles are now safe from expiration, they will continue to loose value every day they are sitting in your account, and at a faster pace then ever. So, you should use them while they are worth something. Check out my Destination Guides below for some inspiration to fly to some new destination with your miles. They are all in Asia, so you can use your miles for partner awards on fantastic airlines like Singapore Airlines or ANA All Nippon – all of which are not subject to dynamic award pricing (yet). Have fun and enjoy your next trip with miles!