United copied Delta in adopting minimum spend requirements for elite status, and raising those requirements when Delta did.
They chose the exact same spending thresholds, even though they have a different business than Delta does. Delta earns profits, maintains operating margins, and attracts a revenue premium that United does not.
United Boeing 757
(Incidentally when I wrote a year ago that American would adopt minimum spend for elite status, I predicted wrongly that they’d pick thresholds that differed from Delta. They just aped Delta’s numbers, too, despite running a different business than Delta does.)
Although United declared two years ago that its problem was too many customers, it hasn’t managed its elite pool as well and has shedded too many elites.
United CEO Oscar Munoz Wants His Customers Back
Last month United handed out one-level status upgrades to many elites, and free economy plus to many members without status (but who held status in the past).
Now there are reports that United is sending out targeted offers to let members buy elite qualifying miles and segments.
The offer seems to be 15,000 miles and 15 segments for varying amounts — such as $1650, $1800, $2400 and even $2500.
It’s common to offer buy ups to the next level of status at the end of the year. That’s something American does each year. And United has long offered the ability to buy extra qualifying miles in conjunction with tickets (Premier Accelerator will be a better deal for many). But this is notable:
- Encouraging members to boost their status mid-year, suggesting United is behind in the number of elites they’d have projected.
- In the past an airline would offer double qualifying miles, but in this era of monetization they’re trying to sell the extra qualifying miles.
- They’re doing it midyear, rather than at the end of the year.
- The big money involved doesn’t even count towards United’s minimum spend requirement for status.
Here’s how United’s status names have evolved over 20 years.
What does United status names have to do with buying status miles?
You say:
(Incidentally when I wrote a year ago that American would adopt minimum spend for elite status, I predicted wrongly that they’d pick thresholds that differed from Delta. They just aped Delta’s numbers, too, despite running a different business than Delta does.)
But AA’s min spend is different than DLs. At top level, AA is 12k and DL is 15k min spend.
@john it’s 12 cents per mile
United Status Names.
Status Miles.
Status.
Fin
AA will be doing this in 18-24 months, or something similar. They have a basic misunderstanding of why elites have been choosing AA, and a misunderstanding of what their strengths and weaknesses are.
After all the nasty changes in their devaluation of the program for Elites and adding that 4th level betw. 50K mi.s and 100K mi.s flown, many Elites probably switched to someone else; they were totally disgusted with their changes, so now they’re desperate for Elites (who fly more often & usually pay higher fares due to close in reservations).
Good post. I’m starting to wonder if UA, DL and AA will end up being heavy with elites from their own respective hubs. Well maybe not “heavy” but will end up with most of the elites they have left in those specific hub cities (mostly). If that happens they could have a hard time growing other focus cities or profitable routes because those of us that aren’t hub captive will be booking with the cheapest and/or best routes instead of a preferred airline. This in turn this will limit expansion and open the door to discount carriers or new carriers in profitable secondary markets long term.
Or, as many commenters have stated, lots of flyers became free agents. The airlines have made their beds let ’em sleep in them. Because of American’s changes they will have a big drop off next year as well. Delta and United have had their drops, American comes next. Very easy to predict.
A lot of this is really less meets the eye, in my estimation. I value GPUs, but you have to have PQDs of $12K to get those, and these purchases don’t count for PQD. If you flew a lot of domestic coach flying, lower levels can be useful to get E+, and Star Gold could be useful for lounge access on international coach. But I suspect many people flying international have lounge access by other means. I also don’t think it is worth it for the CPUs, since those are practically nonexistent anyway.
I am not surprised people are leaving United ….I flew over thirty flights with United last year as a 1K member … tried to use the upgrade 1k award coupons on every flight and was successful only two times. United would rather sell an upgrade for $25 to a total stranger at the kiosk up front rather than reward a loyal customer. AA on the other hand, has upgraded me 99% of the time … and they have replaced United as my airline of choice … I recommend you try AA … their employees try harder and they treat elites like they appreciate their loyalty