From United: more miles for discounts

With award seats in scarce supply and the patience of mileage collectors running low, we’re seeing a scramble among the airlines to provide viable outlets for mileage redemption.

I mentioned United’s dining certificates in a [% 1634862 | | recent post %], as an example of an option for cashing in miles that provided Mileage Plus members with solid value. (Redeeming 1,000 miles for a $25 dining certificate equates to a value of 2.5 cents per mile; or get 5 cents per mile by cashing in 2,000 miles for four $25 certificates.)

United is now offering yet another alternative redemption option: certificates good for discounts on air tickets.

Through June 1, 2007, Mileage Plus members can redeem their miles for certificates for discounts on United, United Express, or Ted tickets purchased on united.com for travel within the 48 contiguous United States. (Travel on discounted tickets must be completed by June 14, 2007.)

There are two options: redeem 1,000 miles for a $25 discount certificate or 5,000 miles for a $75 discount certificate. Only one certificate may be used per ticket.

Here’s how the math works out. When purchasing a $25 certificate, the per-mile value is 2.5 cents; but when purchasing a $75 certificate, the value drops to 1.5 cents. That falloff in value flies in the face of pricing expectations: You’re effectively penalized for redeeming more miles.

Still, even at the lower end of the scale, the discounts represent solid per-mile value—better value, in fact, than redeeming miles for free tickets. Which leaves me wishing that more miles could be used for larger discounts, or even to cover the entire cost of a revenue ticket.

In fact, limiting the number of miles that can be redeemed for discounts may just be United’s way of avoiding such invidious comparisons.