OPPORTUNITIES FOR OUTSIZE VALUE ARE REMOVED
The fixed prices offered by award charts have the potential to create “sweet spots”, redemptions where the mileage requirement is disproportionately low to the cash fare.
For example, one of the best-value KrisFlyer awards is a Business Class ticket from Singapore to Cape Town, a 13-hour flight which costs just 56,500 miles each way. That same flight could cost more than S$4,000 if purchased with cash.
Dynamic pricing eliminates these opportunities because mileage requirements now track cash fares much more closely. It limits the ability of savvy members to obtain outsize value for their miles, and if taken to the extreme, can turn a frequent flyer programme into a glorified cashback scheme, with no real way to come out on top.
While airlines claim that dynamic pricing results in greater award seat availability, the simple truth is that many of these seats are offered at such astronomical prices that they may as well not exist.
For example, with Delta SkyMiles, it’s not uncommon to see one-way Business Class awards between the US and Europe exceeding 300,000 miles, many times what you would pay through alternative programmes with award charts.
With Air France-KLM Flying Blue, Business Class seats between Singapore and Europe can be a reasonable 85,000 miles at times, but are more often in the range of 200,000 to 400,000 miles when dynamic pricing is given free rein.
What’s more, it can feel like airlines with dynamic award pricing are trying to have their cake and eat it. When cash fares rise, so too does the cost of awards. When cash fares fall, preset floor prices limit the upside for members.
