United Airlines has declared that miles no longer matter at all – a strange position for MileagePlus to take. Distance flown no longer matters for earning miles. Redeeming miles is more revenue-based with the elimination of award charts. And now even qualifying for elite status will be based on spending starting next year.
You can earn status by spending more than before and counting up the number of flights you take, or just based on spending alone:
|Premier Qualifying Points (PQP) +|
|Level||Premier Qualifying Flights (PQF)||Premier Qualifying Points Only|
|Silver||4000 PQP + 12 PQF||5000 PQP|
|Gold||8000 PQP + 24 PQF||10,000 PQP|
|Platinum||12,000 PQP + 36 PQF||15,000 PQP|
|1K||18,000 PQP + 54 PQF||24,000 PQP|
Here are 11 takeaways from this historic change:
- United is asking for more money but won’t give you anything more in exchange. It’s a one way street.
- They say this will mean more elites, so status will be worth even less. Upgrades are hard enough to get already.
- United has an interesting definition of ‘most loyal’. They say this change will help the most loyal members get the most benefits, but that there will be more elites competing for those benefits. The only way to square that circle is that United believes the ‘most loyal’ members are those who spend a lot of money but don’t fly very much – who will see higher status under this new structure.
- Loyalty programs used to be about getting customers to spend more time on an airline, taking less convenient flights, and treating customers better who spend their year with you. This is about giving rewards not to people that have been influenced to choose United by the program but who happened to buy just a couple expensive roundtrips a year (with the rest going to another airline). In other words, it’s less about influencing consumer behavior at the margin.
- United brings back the mileage run. They say they’re ending gaming and mileage runs, but by introducing qualifying dollars on partner flights they’re actually reducing the cost of earning status – as with American and Delta the new mileage run is discounted business class tickets on partner airlines.
- Refusing to count credit card spend towards 1K status is petty. The maximum earn is $1000 out of $18,000 spend, would it kill them to keep them simple the way they say they want?
- Speaking of 1K, it should really renamed 18K. 1K was short for 100,000 but the old computer systems only had two digits they could use for the name so it was ‘1K’ instead of ‘100K’. But the status no longer has anything to do with flying 100,000 miles. Instead it requires at least $18,000 in spend or ’18K’. Presumably United’s computer systems are (a little?) bit more sophisticated than they were 30 years ago.
- Capping credit card contribution to 1/4th of spend for silver is picayune. This seems squarely aimed at Chase, from which United is trying to squeeze more revenue.
- This is still too complicated. Why not just call it “qualifying spend” and “flights.” There’d be no need for PQP and PQF acronyms if all flights counted. What’s the point in excluding basic economy segments when you have to spend $18,000 for 1K? And since United’s Luc Bondar tells me they took inspiration from hotel programs with their new qualifying rules, why not count award flight segments towards the minimum?
- United manages to make delta look good. $15,000 spend and 125,000 qualifying miles for top status can be earned mostly via credit card with SkyMiles.
- Why would you choose to earn United status if you don’t live in an uncontested United hub? This sure makes Alaska look good in the Bay Area, Delta in New York.. The point is that customers still have choices. Customers United is firing (or demoting) should look elsewhere.
There are people who will benefit from this move, of course. Someone flying San Francisco – Amsterdam roundtrip in business class twice a year may make top tier status through spend alone (while meeting the minimum 4 flights on United). Indeed, once 1K they might even choose United for some of their other flights domestically rather than sticking with Alaska. Well played, Andrew Nocella!
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