Matthewonlive and let's fly

Minimum Spend Requirements for Elite Status Coming to United in 2014

United Airlines has announced minimum spend requirements in order to achieve elite status starting in the 2014 program year. Similar to Delta, there will be a waiver from this requirement for those who place at least $25,000 on a MileagePlus co-branded credit card issued by Chase, but 1Ks will not be exempted from the minimum spend requirement.

Here's the scoop straight from the source--

Starting in January 2014, Premier qualification for members living in the United States will include a minimum annual spending level. We will track this new requirement with Premier qualifying dollars (PQD) – dollars spent on most United tickets, including partner flights, and Economy Plus purchases. The changes will not affect Premier qualifying miles (PQM) or Premier qualifying segments (PQS). The new criteria will look like this:

  • Premier Silver: [25,000 PQM or 30 PQS] and $2,500 PQD
  • Premier Gold: [50,000 PQM or 60 PQS] and $5,000 PQD
  • Premier Platinum: [75,000 PQM or 90 PQS] and $7,500 PQD
  • Premier 1K: [100,000 PQM or 120 PQS] and $10,000 PQD

A minimum of at least four paid flights operated by United, United Express, or Copa Airlines will be needed to qualify for any Premier status. 

For 2014, the PQD requirement is waived for Premier Silver, Premier Gold, and Premier Platinum qualification for members whose address with MileagePlus is within the 50 United States or the District of Columbia and who spend at least $25,000 in Net Purchases in 2014 on a MileagePlus co-branded credit card issued by Chase Bank USA, N.A. There is no PQD waiver for Premier 1K qualification.

united-elite-status-2014-requirements

The following spending will count toward meeting your PQD requirement:

  • Flights operated by United, United Express, or Copa Airlines
  • Flights operated by a Star Alliance® or a MileagePlus partner airline and issued on a United ticket (ticket number starting with 016)
  • Economy Plus purchases

Below is some fine print. Note in particular that only Star Alliance partner flights booked on United 016 stock will count toward meeting minimum spend requirements. Issuing all Star Alliance tickets via United is frankly unfeasible, so this is a big hit to the spirit of alliance partnerships. Second, while base fares and fuel surcharges will count toward your minimum spend requirement, government taxes will not count, which will add another 1-2CPM (or between $1-2K for 1Ks) to the minimum spending requirement. Addresses outside the USA will be exempt from the minimum spend requirement.

  1. The Premier qualifying dollar (PQD) requirement only applies to members whose primary MileagePlus account address is in the 50 United States or the District of Columbia. Those who use military or diplomatic addresses (APO, DPO or FPO) are exempt from the PQD requirement.
     
  2. Members must fly at least four paid flights operated by United, United Express, or Copa Airlines during a calendar year to qualify for any Premier status. For 2014, members who hold a United MileagePlus Presidential Plus or Club Credit Card are exempt from the four segment minimum as long as they are the primary Cardmember and their Credit Card account is open and not in default at the time of qualification.
     
  3. For 2014, the Premier qualifying dollars (PQD) requirement is waived for existing Presidential Plus Cardmembers for Premier Silver, Premier Gold, and Premier Platinum qualification. There is no PQD waiver for Premier 1K qualification. The Presidential Plus Card is no longer available to new applicants.
     
  4. 2014 Premier qualification dollar (PQD) waiver: For 2014, the PQD requirement is waived for Premier Silver, Premier Gold, and Premier Platinum qualification for members (i) whose address with MileagePlus is within the 50 United States or the District of Columbia and (ii) who in 2014 have spent at least $25,000 in Net Purchases, on a MileagePlus co-branded credit card issued by Chase Bank USA, N.A. at the time in 2014 they qualify for Premier status. There is no PQD waiver for Premier 1K qualification. Only the primary Cardmember is eligible for the PQD waiver. (“Net Purchases” are purchases of goods and services made by you or any authorized user on your account minus any returns or refunds, and do not include balance transfers, cash advances, cash-like charges such as travelers checks, foreign currency, and money orders, any checks that are used to access your account, overdraft advances, interest, unauthorized or fraudulent charges, or fees of any kind, including an annual fee, if applicable). Purchases made by authorized users will qualify toward the primary Cardmember’s Net Purchases total but authorized users are not eligible for the PQD waiver. If the primary Cardmember has multiple MileagePlus Chase Credit Cards, Net Purchases on those cards will be combined to calculate the $25,000 spend for the PQD waiver. For MileagePlus Chase Credit Cardmembers that open an account in 2014, “Calendar Year” means the period beginning with the day the Cardmember’s Credit Card account is approved through December 31, 2014. Therefore, the Cardmember may have less than twelve months in 2014 to qualify for the PQD waiver.

This move is not totally unexpected--after all, a revenue requirement was part of the leaked plan two years ago--but still surprising that it came this soon. I had predicted it would happen in 2015.

Later today, I'll address why this move may not affect many, but does not make sense from a incremental revenue perspective and an alliance perspective.

Fozz is "ecstatic about these changes as it means the long needed thinning of elite ranks may finally come to fruition, which in turn means better upgrades and more benefits for the elite ranks" but I take a different view.

I average about 6cpm on United so this policy change means that I'd have to pay 40% more for my fares or fly 40% more in order to achieve top-tier status. I doubt either will happen. I did spend about $10K last year (flying 150K miles), but a chunk of that was booked with Alliance partners, meaning it would not count under UA's new rubric for status qualification. So where does that leave discretionary flyers like me? In a quandary to be sure, but likely traveling less. In 40 segments, I have not had one bump opportunity this year and cannot a recall a single flight that has not been able to accommodate several standby customers. The majority of my flights have gone out with several open seats.

Why does that matter? It means United loses customers at the margin like me, who go out of their way to fly United but now might temper that behavior (assuming the programs changes take place as described above). Flying is a cost/benefit analysis for me and based on my planned travel next year (with no more frequent trips between Philadelphia and Los Angeles), it simply may not make sense considering I will have MMer Premier Gold status for life. My $6K in revenue may not be much and I by no means consider myself "valuable" to United from a revenue perspective, but I just cannot understand why United (and Delta) seems anxious to sever ties with leisure and budget-conscious flyers who still pour in a decent revenue stream to the carrier each year.

I am not about to jump ship over this change--Delta's frequent flyer program is a joke and it is only a matter of time before the new American Airlines does the same thing--but I likely will cut back on travel, resulting in the same outcome for United.

Many have expressed support of this change on Flyertalk and MilePoint, but these are the people whose business pays for their travel, i.e. the people who will fly anyway. Why reward them when doing so will presumably not result in any increased travel?

Anyway, more on the Star Alliance aspect of this later today.

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Comments

#1
Mike June 18, 2013 at 04:27 pm

"...but I just cannot understand why United (and Delta) seems anxious to sever ties with leisure and budget-conscious flyers who still pour in a decent revenue stream to the carrier each year."

Exactly! I'm crushed by this news. I got the travel bug in the mid-90s when traveling as a consultant. I haven't had any work travel since 2004.

Yet I've maintained status almost every year since then...all leisure travel...and all on my own dime. This year was the first year where I've actively sought out true mileage runs (i.e., $.05 cpm or less).

I absolutely understand that business travelers should get more perks than me by flying week-in, week-out. But this new revenue requirement isn't going to hurt them at all - the company pays for their flying!

Requiring us to buy tickets at an average minimum cpm of $.10 is pretty much going to eliminate most leisure travelers' ability to attain status.

I understand the industry has changed drastically over the last decade, but with all the service degradation at my (formerly beloved) United over the last 1.5 years, this seems to be the final nail in the coffin. I'm only at 650K lifetime, so now I have to seriously think about whether I'm going to make a concerted effort to go from MM status.

'Tis a sad day...

#2
UnitedEF June 18, 2013 at 04:29 pm

UA cares more about yield not revenue. I was talking about it with my friend who works at UA. It makes sense but sucks for people who cannot spend more on tickets. You could just switch your address to Afghanistan to get around the PQD requirement :-) Lucky for me we have offices and residence in China.

#3
andy June 18, 2013 at 06:57 pm

I've been around 10-11k a year with taxes so it's not such a big change to me. But that might change in the future and my family does have a house in France. Do you have any insight into the risks/downsides of changing my address to France?

"but I likely will cut back on travel, resulting in the same outcome for United."

This is EXACTLY what I have done. This year I have only flown 24K on AA, 17K on DL and 2K on UA. Last year by this time I had banked well over 100K miles on the three different airline alliances. Yet, due to the changes at DL, I drastically cut back my travel on them and moved it to AA, however due to AA's small intl' route structure to Europe/Asia I've not been able to fly AA and their partners (AirBerlin does not earn EQM only EQP & CX fare class requirement is to high to earn EQM) to where I've wanted to go for a reasonable price. This has resulted in me churning more cards, and using CC points to book award tickets instead of paying out of pocket.

#5
Ruben June 18, 2013 at 09:55 pm

Hi Matthew,

I enjoy reading your blog, but your sense of entitlement does seem a but skewed, especially in light of your constant reference to "kettles." This move my UA just highlights that you and others who use mistake fares, mileage runs to IST an other tricks are being acknowledged for what you are: semi-frequent travelers, who don't generate the revenue they consume in their FF entitlements, complimentary lounge access, etc.

"I average about 6cpm on United...I did spend about $10K last year...but a chunk of that was booked with Alliance partners...."

Then you are not (repeat: not) a highly valued customer.

"

#6
Ruben June 18, 2013 at 10:12 pm

Got cut off there, also:

"My $6K in revenue may not be much"

It is worth much! It's worth Gold status, which if consistent is what you've really been all along. This is nothing to shake a stick at (priority boarding, e+ at checkin, higher upgrade status and int'l lounge/*G status), especially flying on *A carriers.

Consider the past few years of 1K as a gift for your game-playing, and your lifetime of *G/Premier Gold as a recognition as the loyal mid-tier revenue generator for the airline that you have always been.

Ruben,

I can only recall using "Kettle" once in at least the last year, so I don't understand where you get "constant" from...

Second, I haven't been on a single "pure" mileage run this year. Don't like my cheap Istanbul fare? Don't like my cheap trips between Philadelphia and San Diego? Don't accuse me of trickery for taking advantage of them.

And don't try to tell me that I am only a "semi-frequent" traveler, as if 150K miles per year is commonplace.

Guess what? I admitted in my post that I am not a valuable customer to United from a revenue persecutive, but your dismissal of leisure/self-funded travelers is evidence of a failure to understand a fundamental aspect of airline loyalty--winning customers like me on the margin, for which flying is discretionary spending.

The fact is that I help United fill seats that would otherwise go empty and United is hurting itself and damaging Star Alliance through this shortsighted policy change. And if I choose to fly next year on United, I'll just use my German address, so the $10K doesn't even come into play for me.

#8
NoWhereMan June 18, 2013 at 10:52 pm

I'm getting several points from this article - Revenue and more revenue for United --

  1. It will weed out non-serious players by upping the ante to get in/stay in the game and probably earn United more money in their Star Alliance formula by issuing on 016 stock versus other Star Alliance carrier ticket stock whereby respective carriers get a larger piece of the (revenue) pie versus a smaller piece.
  2. It may "thin out" the (automatic) upgraded herd but I foresee United just offering more TOD buy-up seats at the kiosks for infrequent/leisure travelers or hoping those no longer with Premier status will pay for the buy up as well.
  3. Just maybe??? we airline employees can get a little more chance at non-rev First class domestically ?
#9
Ruben June 19, 2013 at 01:34 am

I don't have a problem with your routings and your Turkey turnarounds; I couldn't care less, outside of reading your trip reviews. United, however, does care, and sees little business sense in rewarding a $250 weekend turnaround with the same "benefits" as a mid-priced longhaul flight. Many of the forgin partners use this measurement and level of restriction, so it really shouldn't impact the Alliance. No other major/serious alliance member offers champagne at beer prices, American carriers are just following suit.

Instead if getting defensive, you could read what I wrote: In UA's eyes, under this policy, you are semi-frequent, or to use better verbiage, "semi-elite" - you are a Gold, and for the purposes of rewarding revenue generation (which is what these programs have always been about), you should be proud of that recognition. The company owes you little for those non-UA miles flown, so I am not sure why that matters here.

As to "filling seats that would be empty," and the policy being short-sighted, this remains to be seen. What the company may lose in revenue from mileage runners it could well earn back in returning business travelers who now have a shot at that complimentary upgrade. Seeing as Neither UA's nor Delta's changes have come into effect, the answer is: we don't know.

#10
UAL 1K Brooklyn June 19, 2013 at 05:46 pm

I just wish they upped the $$$ requirement. Semi-elites need to go. You cannot reward on distance alone. Crazy policy to begin with...

@UAL 1K Brooklyn: $$$ is for Global Services

#12
UAL 1K Brooklyn June 19, 2013 at 06:19 pm

Sorry mate, the whole premise of distance not dollars is flawed. $$$ should be the determination across the board. $$$ makes the world go round.

#13
John June 26, 2013 at 07:51 pm

Why bother trying to earn United Silver status? Most of the benefits are available through Chase/United credit cards. Sitting in First/Business is no big deal anymore except on long hauls. Presently, the really rich/famous people don't fly commercial First/Business very much. They fly on private aircraft. It was nice being upgraded from time to time on domestic short hauls. But in the last 10 years of Silver status (or its prior equivalent), I was upgraded for free to Business only once on an international flight--one that had a very large number of empty Business seats. The other time I was upgraded on an international long haul I paid an extra $400 or so for it. I will still fly United but--like United--I will now value money (i.e. price) over loyalty.

#14
Patrick Doyle July 22, 2013 at 03:17 am

If enough people leave they'll modify it. I'm 1K and this year probably 50% more, I did the math...I will cut down on the number of trips, buy up front and then status becomes meaningless. But it won't be with the fossil from the 70's. Delta has, for where I go, a superior route plan and I have 800k in lifetime with them. Not even sure why I switched but I know why I'm switching back with a status match...late next year after I milk my UA status for what it's worth. The only real perk for me was being able to pull upgrades for my child when he was with me in busy travel periods, which out of NY, is every day. And getting away from the three worst airports in the world EWR, IAD and SFO, suits me just fine. I've sat out way too many equipment breakdowns on United. At the end of the day, flying is simply a faster greyhound bus, sadly.

#15
holly September 3, 2013 at 08:04 pm

Is there a way we can organize our voice together and let it to be heard by the decision makers at United? PQD doesn't make sense to lots of people. The only party benefit from it is Chase United credit card. United shouldn't sacrifice its loyal frequent flyers to benefit Chase.

#16
Nick October 13, 2013 at 09:21 pm

Miles should go out the door, it should be pure $$$ spend.

#17
Houston Captive December 26, 2013 at 11:59 am

My one pass goes back to when I first signed up with Eastern in 87, taken over by Continental which I enjoyed my one pass platinum lot and was able to get upgraded on domestic flights and couple of times on international. I was also able to use my Amex Platinum to access lounges flights, such perks is gone once United took over. I also fly not more than 50K and opt to use Lufthansa for my flights ti Europe, I get better service than on united. and decided to fly others such as BA. As for the comments from someone that defending united approach , I say the price we pay for each mile flown, covers our the cost to get us safely from point A to B plus SERVICE , from booking, luggage handling, service on board and if we run a compassion between United and others, we see that United PQD is way overpriced..I downgraded my status to Gold, just to get the priority boarding and I do not anticipate to fly more than 50K on united. Unfortunately, my base hub is Houston and we are captive audience to united and their monopoly.

#18
Robert January 19, 2014 at 08:06 pm

Base fare PQD hurts - I spent $3K in January and gor $890 in PQD

Here is an example to Frankfurt on Economy Q - got upgraded using a systemwide

Keeping my fingers crossed on FRA-BLR (Lufthansa flight). The ticket shows a number beginning with 016

Still trying to deconstruct this chart for 016 ticket spend on *A (LH)

http://www.united.com/web/en-US/content/mileageplus/premier/qualify.aspx

1/15/2014 United 907-ZQ class Chicago (ORD)-Frankfurt 4,342 0 4,342 8,684 4,342 1 (PQD) $320

#19
United is my bus May 3, 2014 at 10:03 pm

Revenue is everything. I'm glad they did this. I would go a step further and think they should reward segments. I have been 1k for the last 8 years and I make it by flying over 140 segments. It's easy to fly 100k miles while you sleep on international and long haul flights but try doing it 5 to 8 times a week never flying over 1000 miles. It becomes a huge drag. Most of the time I'm limited to regional jets which makes it 10 times worse. If this is a way to make my 1k a little more rare I'm for it.

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