Warning: Frequent Flyer Changes at US Airways

When an airline promises its frequent flyers “more choice and flexibility,” alarm bells should sound. Lots of ’em. And they should sound loudly.

That’s exactly what US Airways touted in yesterday’s press release announcing its new GoAwards. Did I mention alarm bells?

That was just in the headline. The first sentence of the release continues as follows: “US Airways has expanded the choices that Dividend Miles members have with the introduction of its new GoAwards reward program.” Expanded choices! More alarm bells.

Hyperbole aside, what US Airways is trying to say is that, effective for bookings made on or after January 6, 2010, the Dividend Miles award chart will feature a new award tier. Currently, there are off-peak, mileage saver, and standard awards. Under the new scheme, there will be off-peak, low, medium, and high awards.

Essentially, US Airways will take the current standard award and divide it into two, medium and high, according to demand for affected flights. Both will be available without capacity controls, although there are approximately two weeks of blackout dates for every region. In a blow to elite members, they will not be exempted from those award blackout dates.

So yes, with the addition of a fourth tier, technically there will be more award prices and restrictions to choose from. The question is whether, on average, members of US Airways’ program will pay more for their award tickets.

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There are a number of pricing changes to the award chart. Coach seats to Hawaii increase by 5,000 miles, for example. Restricted business-class awards to Europe rise from 80,000 to 100,000 miles. And unrestricted business class seats to South America and Europe will cost as much as 350,000 miles on high-demand days. There may also be changes to the pricing of award travel on Star Alliance carriers, although US Airways so far hasn’t disclosed a new award chart for them.

But the most significant change is likely to take place behind the scenes, with the reapportioning of award availability among the various tiers. How many cheap restricted awards will be reclassified as higher-priced unrestricted awards? And how many of those unrestricted awards will be priced in the high tier?

We’ll never know for sure, because airlines only report frequent flyer program data in the grossest terms. But in US Airways’ FAQ, there’s this: “It’s expected that over half of all awards will be booked at Low or Off-peak, and the remainder at Medium or High.” The norm for an airline program is that the great majority of awards are issued at what US Airways calls Low or Off-peak levels. If the number of unrestricted awards were even close to half, as US Airways suggests, that would amount to a significant increase over the number of pricey unrestricted awards issued currently by US Airways and other airlines.

Based on that and other clues gleaned from what has been revealed thus far, plus US Airways’ proven tendency to use its program as a cash cow, I think it’s safe to predict that with GoAwards, more Dividend Miles members will pay more miles for more awards. Which prompts the obvious suggestion for program members: Redeem your miles before the increases take effect.

GoAwards is a catchy name. Dividend Miles members are more likely to call them OhNoAwards. Ding, ding, ding.