United pushes economy-class travelers away with new frequent flyer program
Tuesday, October 22, 2019
United Airlines recently revealed massive changes to its MileagePlus Program. How much a traveler spends on tickets is the only thing that matters in the airline’s new frequent flyer program.
Not long ago, United quietly switched from a distance-based rewards program to a fare-based frequent flyer program. Since 2015, customers have earned mileage based on how much they spend on the tickets instead of how far they fly.
For example, I typically earn about 4,000 reward miles for a round-trip ticket between Los Angeles and Asia, even though the distance of the trip usually ranges from 10,000 to 12,000 miles. Nevertheless, the distance I fly still matters because it will be counted towards the “qualified miles” for elite status.
Now, the airline wants to take a big step further to (only) reward those top-spending travelers as their elite customers.
The terms used in the current MileagePlus Program
There are four elite statuses in the United Airlines MileagePlus Program, including Premier Silver, Premier Gold, Premier Platinum, and Premier 1K. There are two factors that contribute to elite status qualification:
- Premier qualifying miles (PQM) that a traveler flies in a calendar year, or premier qualifying segments (PQS) that a traveler flies in a calendar year.
- Premier qualifying dollars (PQD) that a traveler spends on the tickets in a calendar year. However, travelers spending $25,000 a year on MileagePlus Chase credit cards can waive this requirement, except for the Premier 1K qualification.
To reach Premier Silver status, a traveler must (a) complete either 25,000-plus PQM (i.e., flying 25,000-plus miles in distance on United or United partners’ flights) or 30-plus PQS (i.e., taking 30-plus flights operated by United or a United partner) and (b) spend either $3,000 PQD on air tickets of United or its partners, or $25,000 on MileagePlus Chase credit cards.
For Premier Gold status, a traveler must (a) complete either 50,000-plus PQM or 60-plus PQS and (b) spend either $6,000 PQD on air tickets or $25,000 on credit cards.
For Premier Platinum status, a traveler must (a) complete either 75,000-plus PQM or 90-plus PQS and (b) spend either $9,000 PSD on air tickets or $25,000 on credit cards.
For Premier 1K status, a traveler must (a) complete either 100,000-plus PQM or 120-plus PQS and (b) spend $15,000 on air tickets.
Frequent travelers with elite status can enjoy different levels of benefits offered by the airline, such as free bag check-ins and upgrades. The benefits associated with the elite status make a frequent traveler feel valued.
The terms used in the new MileagePlus Program
Effective on Jan. 1, 2020, the new MileagePlus Program qualifies a traveler’s elite status based on two factors:
- Premier qualifying flights (PQF), or how many paid, non-basic-economy flights a traveler takes in a calendar year.
- Premier qualifying points (PQP), or how many dollars a traveler spends on the tickets issued by United in a calendar year. Additionally, there are two formulas to convert the mileages earns from preferred partners and MileagePlus partners into PQP.
To achieve Premier Silver status, a traveler must complete 12 PQF and spend 4,000 PQP, or 5,000 PQP alone if 12 PQF is not met.
Premier Gold status requires 24 PQF plus 8,000 PQP, or 10,000 PQP alone if 24 PQF is not met.
Premier Platinum status requires 36 PQF plus 12,000 PQP, or 15,000 PQP alone.
Premier 1K status requires 54 PQF plus 18,000 PQP, or 24,000 PQP alone.
Starting in the fall of this year, United has also made changes to the requirements for premier upgrades for its elite customers.
The reasons behind the changes
The airline industry has been doing really well for years. United Airlines reported $1.02 billion in profit in the third quarter, about a 23% jump from last year’s third-quarter profit of $833 million. Consumer demand for travel remains high. It makes good business sense that United wants to reinvent its frequent traveler program.
Meanwhile, when more people can afford to travel, many airlines face challenges of accommodating increasing consumer demands for airport lounges. Many airport lounges have become too busy to enjoy a real VIP experience.
As the new MileagePlus Program tends to qualify those top-spending travelers for elite status, those who do not spend “enough” money on air tickets can be weeded out, reducing the number of travelers who access airport lounges.
The impact of the new MileagePlus Program
The new MileagePlus Program makes it much more challenging for most economy-class frequent travelers to achieve any elite status. Using myself as an example, I will become a Premier Platinum member by the end of 2019 by flying economy class only, according to the current term used by the airline.
Nevertheless, under the newly introduced criteria, I could barely qualify for the Premier Silver status in 2021, which doesn’t give me much value.
Unless I begin flying business or first class at the cost of $4,000 or over $10,000, respectively, for a round-trip ticket between Los Angeles and Asia, I will not spend $10,000 a year on economy tickets. It becomes very discouraging for those like me who usually only fly economy class even to try to reach an elite status.
But, wait a minute! If I can afford flying business or first class, why would I care for any of the perks that come with the elite status? On the flip side, why would those who spend over $18,000 or $24,000 a year on air tickets bother to stay with United to get the perks as a Premier 1K member?
I hear another voice, proposing to add a frequent flyer tax as a means to lower carbon emissions. Through the massive changes in the airline’s frequent flyer program, maybe United is also trying to encourage its loyal customers to reconsider the real purpose of joining the MileagePlus Program.
What do you think of the changes in the United Airlines MileagePlus Program? Are those changes necessary and helpful in keeping the airlines’ loyal customers happy? Why or why not?
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