United Copies and Pastes Delta’s New Elite Revenue Hurdle

You guys love your elite status with United, don’t you? When the airline started sending emails about new spending requirements to earn elite status every year, I started to get emails from a lot of you with the news. And I’m not even a miles and points blogger. I can’t imagine how many notes guys like Gary Leff and Lucky got. Nobody should be surprised at what happened. In fact, if you saw what Delta did back in January, this is virtually identical with a couple of minor tweaks.

The basic premise here is that you no longer need to just earn a certain number of miles or fly a certain number of segments to get elite status. You now need to spend a certain amount of money as well. Here’s United’s chart:

United Revenue Qualifying

This new plan begins in 2014 for people earning their 2015 status. Oh, and it’s only for those in the US. Everyone else sees no change. These PQM (Premier Qualifying Miles) and PQS (Premier Qualifying Segments) requirements don’t change at all. It’s just that new PQD (Premier Qualifying Dollar) requirement that gets added. As Delta does with its Amex, if you have the MileagePlus Visa and spend $25,000 in the year, the PQD requirement gets waived. The one tweak on this is for 1K, you can’t waive the spend requirement. You really have to earn it.

And the spend requirement forces you to give your money to United and not to partners, just as Delta has done. Base fares (no taxes) as well as Economy Plus purchases count toward the requirement only if travel is on United or Copa. (Copa is included because MileagePlus is the loyalty program for Copa as well as United.) It will count on other airlines as well but only if issued on a United ticket. So if you fly United to, say, Frankfurt, and then connect on Lufthansa to some small city, that would count as long as the ticket is issued by United (or a travel agent tickets it using United ticket stock).

The spend requirement here has certainly rubbed some of you the wrong way, and I get it. United continues to suffer right now with customer service and IT problems that I experience first hand with Cranky Concierge every day. (Canceled upgrades, incorrect pricing, long lags in mileage deposits, and that’s just what we’ve dealt with in the last week.) So until United can start delivering on a better product, you would think the airline might want to hold off on implementing more restrictive rules that deter loyalty. But then again, who is really impacted here?

If you’re actually earning 25,000 miles from flying and haven’t spent $2,500 on United, then United might not consider you to be worth trying to keep in the program. Either you’re trying to game the system through a really cheap mileage run, or you’re getting incredibly lucky with low fares since those are pretty tough to find these days. Or maybe you’re just flying a lot on partner airlines. I do think it’s odd that joint venture revenue on Lufthansa/Air Canada over the Atlantic or ANA over the Pacific doesn’t count, because United should view that to be the same as revenue on its airplanes. But my guess is that it’s simply a tracking problem. Either way, if you’re really flying that much on joint venture partners and not on United, then you should probably join the other airline frequent flier programs anyway.

On the whole, I don’t have a problem with this move. In fact, I applaud United as I did Delta for trying to tweak these programs to reward the kind of behavior United wants to encourage (spending money and flying a lot instead of just flying a lot). But unlike Delta, which is in a position of strength right now, United’s timing leaves something to be desired.

41 Responses to United Copies and Pastes Delta’s New Elite Revenue Hurdle

  1. Jared says:

    I get that DL and UA want you to fly them, but doesn’t this kind of undermine the oversll goals of the alliance? And like you said, joint ventures should be included.

    Hopefully AA doesn’t follow suit. Glad that AAdvantage is my program of choice.

    • MeanMeosh says:

      I wouldn’t count on USAA standing pat. We might not see anything immediately with the merger going on, but I’m willing to bet that within a year, you will see them implement something similar with the combined AAdvantage.

  2. David says:

    AA has bigger issues to deal with – like a merger of 2 companies. Once they’re done with that, you can be certain they’ll be taking a look at killing off mileage runs as well.
    Based on Oneworld earning tables, I’m guessing that AA might follow a slightly different approach – namely if you fly 10,000 miles in business you earn 15,000 miles but in deeply discounted economy you earn just 2,500 miles. Again, this would also kill off the mileage runs and focus loyalty recognition on the customers who are genuinely profitable for the airline

  3. Lou says:

    The United page says

    “The following spending counts toward the PQD requirement: [...] Flights operated by a Star Alliance® or a MileagePlus partner airline and issued on a United ticket (ticket number starting with 016)”

    I read this as ((*A) OR (Partner AND UA ticket)) vs ((*A OR Partner) AND UA Ticket)

    which seems more ‘reasonable’ to me as partners tend to rank lower than alliance members.

    • CF says:

      Lou – I’m afraid that’s not reading it right. Spending will only count toward the goal if it’s on a United flight or if it’s on another airline on a United ticket.

    • ogi says:

      it’s not ambiguous at all actually. the ticket has to be bought via united (starts with 016). that’s pretty clear. same as with delta.

  4. How much does it really cost the airlines to have a few more elites? Especially with credit card benefits…

    Elite status creates loyalty and gets people to pay a premium to fy “their” airline. Sure as a DL Medallion, I do wish that there were less people to compete with for an upgrade, but from the airline perspective, it’s hard to see the big benefit. Lost mileage run revenue, less likely to be customer’s preference, all for a marginally small higher cost of handling those pax.

    I agree that the $ levels are very reasonable for most fliers. Which makes me wonder how many people are going to really be affected? All this hubub for a few thousand people?

    I’m suprised revenue isn’t an alternative way to gain status (rather than a requirement qualifier). Segments imply the airlines importance to me, miles are really a legacy of old programs when price actually correlated to stage length, and dollars should imply how important I am to the airline.

    I also wish they counted all spend (including taxes and fees) and just made the requirement thresholds higher. Simplicity would have been appreciated.

    Also ironic this comes the day Jetblue says their points won’t expire.

    • David says:

      Noah – giving out loyalty recognition costs an airline in a few ways.

      1) There is a cost to providing the extra comfort or customer service – a business class seat uses more space than an econo
      2) If everyone gets recognised, then it loses its value. You have to be seen to differentiate by a fair set of criteria for a badge to be perceived by the masses to have value.
      3) If everyone thinks they deserve the seat upgrade, then nobody is willing to pay for it – just buy a seat in economy and rely on the system to automatically upgrade you.

      Yes, it would be nice if airlines improve comfort and customer service for everyone like the good old days (with rose-tinted spectacles), but the masses have shown they are not willing to pay for it – that’s worthy of a completely separate discussion.

    • MeanMeosh says:

      The fliers most affected by this change are your rabid mileage runners and those that routinely exploit mistake fares (and by “rabid mileage runner”, I don’t mean someone who just spots a cheap transcon and does a same-day turnaround; I’m talking about those crazy routings like DFW-SFO-JFK-IST-FRA-ORD-PHX-LAX-DFW). They may be relatively few in number, but they also tend to be the most vocal, so if they’re unhappy about the changes, you’re going to be hearing about them more than you might otherwise expect.

    • CF says:

      Noah – I have no idea how many people are affected, but my assumption is that it’s not many. I would assume that United, like Delta before it, decided to institute a low bar so that it didn’t push anyone out immediately. But it sets the precedent that spend will be required. So then I assume that we’ll see the hurdles climb over time. This is just starting the process.

  5. Lou says:

    Well it turns out to be about 10 cents per mile which seems higher than what a typical mileage run would be. Also, US Airways currently allows you to buy top tier status for only $4K.

  6. Aren’t the airlines money issues their own fault for doing upgrades in the first place? As Cranky pointed out with his KE trip, carriers outside the USA don’t just upgrade people like is done here. Why would people pay to sit in a higher cabin if they have a chance of upgrading to it? Maybe if the airlines stopped upgrading, people may start paying for First or Business, and if they don’t, then the airlines know they don’t need those cabins or to spend money updating them.

    Doesn’t it make travelers mad if they can’t get that upgrade because other mileage members beat them to it? The airlines want the high $$$$ of business travelers, but how many of those business traverls sitting in First/Business really paid those fares or were upgraded? Airlines should stop upgrading and if they see people are not paying to sit in First/Business then shrink those cabins and add more PremEcono seats that I’m sure a lot of last minute business travelers pay for and make that section a more comformable seating are.

    • Sanjeev M says:

      I like the Europe model of a meal, some legroom, and LOUNGE ACCESS. In my mind, a premium cabin means a premium lounge and I’ll gladly accept 3-3 EuroBiz in return for some lounge access, esp a nice one like BA Galleries. In terms of loyalty, its much harder in Europe to gain status. But benefits are good. LH gives their first tier “Frequent Travelers” lounge access at hub airports only for just 40k miles flown! That’s unheard of in the USA.

      Ultimately, the cost of anything on the ground is cheaper than in the air. Feed me well in the lounge, and leave me alone on the plane. Lufthansa has newspapers and drinks available to everyone at FRA, so that they don’t need to carry as much of these things on board.

    • Well like anything in the airline business it depends who goes for it first. Since the airlines in the US all do the same thing the first one to do it is going to take a revenue hit. Although perhaps they’ll peel off free upgrades for the lower tiers.

      That being said, they might still end up having to upgrade people since they’re running the system so close to capacity they might need the coach seats..

  7. MonteK says:

    I think these moves were long overdue.
    Loyalty programs should always have had a revenue component.
    Anyhow many other US carriers have formed their entire FF programs around revenue component already – JetBlue, Southwest, Virgin American, so the majors are just catching up.
    And yes AA will follow. Maybe not for another year, but as they digest their merger AAdvantage changes will certainly follow.

  8. S*A*A*D says:

    I like Noah’s suggestion that revenue alone be considered as an option for elite status. During high-demand periods, airfares from Texas to California can average $500. Five trips = $2500 in spend but not even 17,000 in miles (IAH-SFO) and only 10 nonstop segments, neither of which comes close to earning Silver on United or whatever American might come up with.

    As Cranky points out, cheap fares can be a crap shoot and mileage runs may not do it anymore but I’m thinking something like this:

    Silver = 25,000 miles or 30 segments PLUS $2500 – OR – $25,000 net spend on UA.

    Why so much? At $10,000 that’s one C-class ticket to Europe or Asia. Does that make sense to compete for upgrades with someone who buys one international ticket per year? It also recognizes those who buy last minute but are not necessarily the road-warriors others tend to be. More revenue bang for the buck and the true travel titans will look at that requirement and most likely still say “Easy!”

    Thoughts?

    • gobluetwo says:

      I agree with your idea in theory, although the numbers are out of line. Nobody in their right mind would spend $25k on UA and 1) only get enough miles for Silver and 2) just to get Silver. I’m thinking $25k in total spend is more like 1K territory.

  9. Matt says:

    Reading elsewhere about the number of people who will set up fake residency overseas to skirt the money requirements, I wonder how much of a case of “easier said than done” that is. I assume airlines have auditing tools at their disposal and that consequences would be fairly severe for anyone caught defrauding the system (cancelled Mileage Plus accounts?).

  10. Tom says:

    Now for global services, your UA tattoo better be a globe and not a tulip or Jeff will slap that tulip right off.
    Seriously though, those that love this likely have other people paying for their own tickets. Those that pay for their own tickets will be less enthused. I am almost relieved at the thought of moving on….I’ve kind of had it with United and this merger. Putting all of this in dollars and cents language in a cumulative basis has led me to the conclusion that I’m likely spending way too much on UA and that it’s time for me to make a ‘business decision’ and shop around more … what UA offers isn’t worth what UA wants.

    • Bobber says:

      Sadly, Tom, I think I’m with you. I’m flying more and more with UA, will probably go Platinum for the first time this year, having been Gold for the last two, and I see less and less benefits than I did as Silver.

      I may, grudgingly, have to become more patriotic and even consider (the horror) of flying BA to the US and Far East.

    • CF says:

      Tom – So have you actually achieved one of these status levels without spending that much money already? I’d be surprised since the bar is pretty low.

  11. CP says:

    AA has long had an item within the program that recognizes spend for elite status–the “points” they have in addition to miles and segments. That’s different than mandating spend–it allows people who fly less but spend more to still get status–but it does recognize revenue to an extent the old UA and DL programs didn’t.

  12. JayB says:

    Wondering how long these big ‘ol loyalty programs will survive. Cost of administering them. Do they still have any value to the airlines? Do their customers really care?

    If UA discontinued MileagePlus, would they be hurt? Would everyone switch to USAAAA, DL, WN, and JetBlue? Or, would things shake out just as they are now? I live next to IAD. Think I’m ever going to switch all my travel to someone other than UA, or its alliance members?

    When you fly, how much weight do you give to a FF program vis-a-vis price and service? Sure, upgrades are nice, but couldn’t an airline handle that without a FF program?

    Once you assign me a customer number, you’ve figure out just about everything you need to know about my travel, or lack thereof. And, like you don’t already know my habits re: every other airline in the world?

    OK, in one week, I’m questioning the survival of hubs, and now the FF programs. Next week?

  13. I loved the GS addition, very funny and very true. I agree, that very few people will be negatively impacted, in fact, the loss of the mileage runners, even with small revenue, might hurt UA/DL more. It is for that reason that I think the spend numbers will be gradually increased to slowly wean us off of the status part of the program, and leave the lucrative miles-for-flights part of the program and let them sell the miles to credit card companies.

  14. Bobber says:

    @Brett,

    “Oh, and it?s only for those in the US. Everyone else sees no change.”

    So me, as a Limey, based in the UK, ISN’T affected by this??? Please tell me this is true!

  15. RICH says:

    Loved the Global Services Level costs; Know one Global Services member
    and you are Hand Picked by U.A… He is on a plane at least 100 K a month.
    I think he knows every pacific crew by first name.
    The days of Ice Cream Sundays and Linen tray covers are long gone.
    In the Golden days we each bought 5 k worth of 250.00 air passes from
    U.A. & A.A., pre 9-11 only one 250.00 pass was needed for a rd trip Domestic … Those of us that flew to Australia or Asia on a regular bases it was only 3 to 5 passes. Thus we ended up every yr with 1 K status
    on only 5 k in tickets. Easy to get Gold status now but, I agree..the benefits are far and few. Now-a-days you can buy the select United card at 95.00 a year get free 1 bag… and board with Group # 3. You can buy
    premium Plus for 500.00 a year starting in 2014. For those of you that have 20 more years of flying lot s of Luck.

  16. Hajime Sano says:

    Hi Brett, any word as to how million milers will be affected? There is only a slight chance I’ll make it this year. Most likely, I won’t hit one million miles until next year. I wonder if there are plans to make the million milers spend a minimum amount of money to maintain their lifetime Gold/Platinum/1K status.

    Haj

    • CF says:

      Haj – I haven’t heard anything about changes to the million miler program.

    • USBT says:

      Your status through MM isn’t affected. I’m one MM and received an email from United telling me my lifetime Gold status remains. Of course to earn higher status than Gold (I’m currently 1K) I’ll have to meet the new minimum spend requirement.

      • I wonder if that means to hit 2 million and earn lifetime Platinum, you could conceivably earn 50K miles/year for the next 20 years, not spend enough to earn Gold each year, but still hit 2 million and suddenly be lifetime Platinum.

        Or the miles don’t count towards your next million threshold unless you meet the minimum yearly spend threshold.

  17. Jonathan Reed says:

    Several years ago United had a program. You could pay $20,000 in advance for United fares to be used within a year for 1K, $10,000 for gold, or $5,000 for silver. I wonder why that option went away.

  18. This is another indication that airlines are being run like businesses, not hobbies.

  19. mharris127 says:

    I have read the write-up on the United website and noticed something that you all seem to have missed. They are instituting a four paid flights a year (I am assuming single flights so a round-trip would count as two flights) requirement to even have a chance at qualifying for status. The flights have to be on United/United Express or Copa. That could eliminate some people that fly international and only do so once a year, especially those that fly first-class (with the 50% mileage bonus for those customers).

    • gobluetwo says:

      The 4 segments on United/Copa metal thing has been in place since 2012 for 2013 qualification. It negatively affected a few people (e.g., those living overseas and crediting to UA, but spending the majority of their time on *A partners), but it’s also relatively old news.

  20. Sunny says:

    What is annoying to me as a frequent flier and way too many nights in hotel rooms is the status of credit card holders. I am in the crappy seat in coach and every week in a hotel room for 1-2 nights and yet those with credit cards get earlier boarding. The hotel points have really been affected. Now my points for Actually Staying in the Hotel are dwarfed by the credit card rewards points. It has altered my reservations with hotels. And, yes I’m on the road every week.

  21. Jeff says:

    I’ve got no problem using revenue as a measure. British Airways have done it for many years with “tier points” for seniority but you earn “tier points” on some partner airlines too like AA or Iberia.

    I do have a big problem the way United count it and am glad it is only in the US. I usually fly Lufthansa/United on a combined Lufthansa ticket, for technical reasons, for example TLV-FRA-SFO-EWR-TLV, and in spite of the special United/Lufthansa joint deal resulting in joint LH/UA with shared revenue on FRA-US flights… I wouldn’t get any $ recognition but would get the same bonus miles as if I’d flown UA under this new scheme. That sucks… And why I can see big pushback from everyone outside the US if this became a requirement.

    Having said that, the numbers aren’t too high, if you are able to take UA most of the time. My typical international tickets are between $1000 and $3000 in economy so the numbers aren’t that restrictive to me.

    If they did increase the numbers significantly and applied it out of the US, then even as a Million Miler, I’d jump ship. Quickly.

Leave a Reply

Please use your real name or nickname instead of your company name or keyword spam.