I’ve been reflecting quite a bit on travel loyalty and the whole miles game since this information first surfaced over at One Mile at a Time. To be sure, until United actually makes an announcement, everything is just a rumor. That said, I’d bet money it’s not that far off from what we ultimately wind up with. Recognizing the gist of this has already been covered by Lucky and Gary, let’s review the high points for conversation purposes.
In summary, the rumored changes include a plus up to class of service bonuses ranging from 125 percent for your basic Y, B, and M fares all the way up to 250 percent for F and A fares. As far as status levels go, the new MileagePlus would offer 4 status levels, Premier Silver, Premier Gold, Premier Platinum, and Premier Diamond. Now, this is where things get tricky. If the rumors turn out to be true, United will add a minimum spend component to the usual miles/segments requirements. For example, the base status of Premier Silver would be granted to fliers who a) fly 25,000 elite qualifying miles (EQMs) or fly 30 segments, spend $2,000 dollars in revenue, and fly at least 4 segments on United. But there’s yet another way to earn Premier Silver, spend $5,000 dollars and fly 4 United segments. I won’t review the rumored qualification requirements for each status level here, but I think you can see where this is headed. United is going to attempt to closely tie elite status to revenue, and not just mileage flown.
In my case, I spend considerably more than $2,000 dollars per year on air travel, some for personal reasons, more for business. Trouble is, I can’t absolutely direct all of that to just one airline. Would a requirement like this spur me to try and be more loyal? Not likely. If anything, I’d move to an airline and program where things are a little less convoluted. It doesn’t get a lot of press, but American AAdvantage made a tweak to its program years ago that effectively rewards higher revenue travelers. At American you qualify for status via segments, miles, or points. With elite qualifying points (EQPs), American awards more or less based on fare type. So with a full Y fare, you earn 1.5 EQPs and 1 EQM. If you are a traveler who typically buys higher fares, you will be rewarded accordingly by attaining elite status or higher status faster than a traveler who only buys the lowest fare which earns 0.5 EQPs (but still earns full EQMs).
If the rumors about the new MileagePlus come true, color me unimpressed. I don’t think customers that book the lowest fare are necessarily unprofitable. Yes, they search for reasonable fares, but might they not also carry a MileagePlus Visa and charge every penny they spend to it? That same customer probably also eats only at restaurants that participate in the Rewards Network program, and does all of their online shopping via the MileagePlus shopping portal. In all of these cases, miles are being sold and revenue is being earned by MileagePlus and United.
I suppose my point in all this is that I get the idea of rewarding high spenders. It’s just that I think there is a way to reward higher spend travelers without penalizing others. American gets it right in my book. This rumor about MileagePlus, which may have been a trial balloon for all I know, is less than stellar. It’s going to be interesting watching the new MileagePlus unfold this fall.