United Worried about Shrinking Elite Numbers?

I don’t normally think of United Airlines as being generous about offering elite status matches, trials, or challenges — at least not in recent years. Almost anyone can request a status challenge, but that’s no guarantee you’ll get one, nor is it the same as publicly reaching out to customers and trying to encourage them with a specific offer.

Earning status in the first place is sometimes the hardest part, but once obtained it can be more comfortable (upgrades and shorter lines) as well as lucrative (fee waivers and bonus miles).

A couple weeks ago American Airlines targeted some customers for Gold and Platinum status trials: get some status up front along with 500-mile upgrades and keep it for the year if you earn a certain number of miles in a couple of months. The idea is that if these customers get status once, they may learn to love it and do what it takes to keep it. It is a useful tool for improving the loyalty of one’s own customers as well as poaching from a competitor.

United has just this week started two efforts to encourage such loyalty, and the fact that it has done this at all with no recent history (to my recollection) leads me speculate they may be worried about losing business to competitors.

20,000 Bonus PQMs and 4 Regional Upgrades

First, edsh shared on FlyerTalk that he was sent a targeted offer from United Airlines telling him they would provide 20,000 Premier Qualifying Miles and 4 Regional Premier Upgrades just for kicks. Really?! I’ve never heard of such generosity from United. I can’t even get a proactive apology email when my flight is delayed 3+ hours, yet here they’re giving away miles and upgrades.

My guess is that these people are high value customers. Some bonus PQMs won’t help much for earning elite status this year without also earning sufficient Premier Qualifying Dollars. But for some, the PQMs are a bigger issue than the amount spent.

If a business traveler is paying on average 20 cents per mile flown, that means he or she might reach the $10,000 PQD requirement for Premier 1K status but earn only ~55,000 PQMs (remember, some taxes and fees aren’t included in PQD calculations). Additional bonus PQMs in this case would vault the customer from mere Premier Gold status to at least Premier Platinum.

The RPUs are also helpful as they place a customer at the top of the upgrade queue before any complimentary upgrades. Sometimes last-minute customers have difficulty obtaining an upgrade even though they buy expensive tickets because the upgrade window opens as early as five days before departure.

Premier 1K Status Trial

Second, I’ve seen some tweets reporting that United is targeting Premier 1K status trials to some customers. I don’t know the details so I can only assume it’s a trial (which means you still have to fly some to keep it), but the fact they are proactively contacting customers at all is interesting.

American Airlines offered outright matches to Executive Platinum status two years ago — no requirement that those people fly at all to obtain the status for the rest of the year — but since then has been dialing down the frequency of such offers while also requiring a little more commitment. I recently obtained a trial that involves earning 25,000 elite-qualifying points (equivalent to 50,000 miles using deep-discount fares) and had to request it myself.

Conclusion

Before now, United’s new PQD requirements and occasional dilution of lower tier benefits pointed toward a renewed focus on high-value customers. These two offers reinforce that message. Is that a good or bad thing? Airlines need to make money, so I don’t begrudge them keeping an eye on the bottom line. But I do wonder about the future of those who will still be stuck in the middle tiers of MileagePlus.

Honeymoon Trip Report: Thai Airways Business Class (HKT-HKG)
Review: Hyatt Place Seattle

Scott created Travel Codex after learning how to travel better on a budget during grad school. He now flies over 150,000 miles every year.
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  • Darth Chocolate

    OK, a disclosure: I absolutely HATE, HATE, HATE United for the so-called service it supposedly provides. In my 25+ years of travelling on business, I do not believe I have had either a United or Continental flight that had no issues. Never again, unless it’s the only option, and even so, I’ll look for alternatives.

    Now that I have that out of the way. The absolute worst thing about status on United is suffering through the pain and indignity of obtaining status on United. I mean, only a masochist would willingly subject themselves to the continuing joy of surly ground staff, delayed/cancelled flights, damaged/delayed/lost luggage, and the general happiness that is O’Hare. Then there are the pilots who decide that they simply do not want to fly, resulting in a cancelled flight. And then don’t have the guts to walk past the passengers who had waited through an 8-hour delay while the gate staff calls the cops in before they make the cancellation announcement.

    But what does one expect from a company that has significant Union ownership?

    However, if this is what you think it will take to boost revenues, more power to you United. If you actually focused on CUSTOMERS as part of the whole “Customer Service” thing, you may have better luck. Your actions remind me of why Willie Sutton robbed banks: “That’s where they keep the money”. So too with HVCs.

    • Dimitri

      Agreed…not very friendly at all

  • rick b

    I haven’t had bad service on flights, but their First Class product is junk, barely better than Business, which itself isn’t that great. Why would anyone want to be loyal to them?

  • Andrew

    United service left when Continental bought/merged with them. If you look at the senior management of the new airline – it’s 99% CO. If people hate the new United – blame CO. United had great service prior to the merger – yeah…”You’re gonna like it” is BS from Smisek. Also…look at all the things they decided to get rid of after the merger – only to bring them back after complaints from customers……

  • jay

    United’s main problem for high revenue customers is their lack in soft and hard product in their premium cabin. We all know their service is awfully bad. As already pointed out, their international *first* class is worse than most asian/middle eastern carriers’ *business* class in every aspect. Now business class is a joke; come on, is it a dorm bed or what? Their newest business class cabin has 4 seats together in the middle. I cannot remember any airline that has similar seat structure on biz.

    Now United is trying to have high end customers fly their fleet and/or pay for them. For example, UA reduced the premium cabin bonus from partner airlines (150% to 100%). Next, UA started PQD, which means the ticket has be first paid to United. These all point out to one thing: they want the money from premium cabin. But the problem is their having all these requirements without improving their premium cabin experiment. Of course, the high end customers will go away because of devaluation of the mileage program. Until last year, I was on the united FFP simply because I could burn my miles on partners. Now I cannot because it is too expensive. The entire program is not really attractive anymore, which was the only thing that United attracted me over the past years. I think United first should think about how to attract high end customers from service and fleet point of view. Then they can start requiring things. I see this from AA. Their new 777-300ER is really nice and I started flying AA instead of its partners. Now they can require whatever they want, I would still be on AA.

  • Pizzainmotion

    I’m one of those folks who will hit PQDs with ease but miss PQMs. I’m already at $1500 on 6800 PQMs. That being said, I’m not sure why I’m chasing status with UA’s significant drop in service levels. If it wasn’t for the fact that I fly hub-to-hub (and would be screwed without some kind of status) I’d likely take a pass this year.

    • Scottrick

      Well it’s all about lifetime status isn’t it? ;)

      • Pizzainmotion

        Funny guy. :)

        On United? Not for quite some time for me.

  • Unhappy UA1K

    I recently made the switch to Alaska
    (thanks to their status match) after flying over 238K miles on United last
    year. Frankly United is being run as business and all their
    recent investor meetings only prove that additional changes will come that will
    make us all unhappy.

    My experience over the past year
    have shown that on flights over 2.5-3 hours, if you want an upgrade, you’d
    better be a Global Service member or use one of your RPUs/GPUs or miles
    otherwise you will be in the back. One
    flight in July, I was the only 1K in domestic first because I used miles
    (interestingly, the FA was not happy with all the general mileage plus members
    that were upfront versus the large number of loyal customers in the back including
    a large number of 1Ks).

    Consider they are a business, it
    makes sense why some upgrades are so hard to get since once you buy a ticket,
    United will try multiple times to sell you the immediate upgrade. Apparently is it working, as people are doing
    just that (or buying First outright).
    Just take a look at the number of First seats in the cabin versus the
    number of upgrades. My experience has
    been around 40-60% are paid (at least on the flights I’m taking).

    Last point on lifetime miles, I’m at
    ~700k lifetime miles, I’ve got no confidence that United will keep the million
    mile program or impose some nonsense like lifetime PQDs plus PQMs for
    status. Plus I’ve met too many 1MM, 2MM
    and one 4MM that frankly aren’t happy at all with the program. Not to mention that unless you are flying
    Star Alliance, you might as well get the United credit card as you will have
    almost as many perks as getting Gold for life.
    Fact is, as long as they continue to focus on money and less on customer
    service, I think we will continue to see a slide in all the things we complain
    about on these blogs.

    Ok – off to call United for the third
    time to pester them about an $1100 refund for the option to upgrade from
    Business to Global First (which did not occur) from a 5 December flight. The only good thing is I will wait less than
    2 minutes to talk to a human only to hear that it has been ‘refunded’ (I think
    they are now trained to tell you what you want to hear…) and it has not!

  • Chuck

    Smisek hates 1K’s. The fact I wasted so much of my life flying United to see all real benefits disappearing Mar 2012. I virtually never get upgraded anymore on flights longer than an hour, PS upgrades don’t clear. He devalued all the miles because of their transformation into a credit card company. Worst CEO in history folks.