Anyone who reads this blog, knows I’m a United guy. I fly just enough each year to earn United Premier Gold Status (50,000 paid miles flown in the calendar year). Last year, United announced they’d be adding a revenue component to the qualification as well for the 2015 status (miles flown and dollars spent in 2014 earn you status for 2015). In order to keep Premier Gold Status for 2015 I would need to not only fly 50,000 miles, but I’d also have to spend at least $5,000 in airfare.
It isn’t surprising that United (and Delta) have done this. The economy is doing well, airlines are making money and more people are flying. The airlines want to reward their flyers who are their best customers – not just the most flights, but the people who contribute to their bottom line. Before this revenue requirement was implemented, it was possible for a flyer to buy cheap long-haul airfare and earn status without really contributing to the bottom line of the company. For example, last year I found a flight to Shanghai (PVG) from Chicago (ORD) for less than $700. That’s 14,112 miles round trip or $0.049/mile. At that rate, I could have earned Gold status for just $2,480 – which would have granted me free checked backs, free upgrades, access to various lounges when traveling internationally and immediate complimentary access at time of booking to their premium Economy Plus seating. Following the same logic, I could earn Premier 1K status (the highest status that doesn’t require an invitation) for only $4,960). With United earning that amount of money on their elite flyers, they wouldn’t stay in business very long.
Fast forward to last year, when United adds in a revenue component – they want reward the flyers that make them money. Basically, United wants you to spend $0.10/mile on average with them to get status. When this was announced last year, I took a quick look at my United spend and found that this wouldn’t be a hard threshold to pass. I’m fortunate enough that about half of my annual travel is work related – going to some markets that have very limited air traffic, which drives up the cost per ticket.
A couple weeks ago, United announced a change in their United MileagePlus program. To keep my Premier Gold status through 2016, I’ll need to fly 50,000 paid flight miles (award miles don’t count in this total) and spend $6,000 on those flights. That’s a 20% increase in spend year over year.
20% increase in spend – that’s a big jump. I have no concern that I’ll fly 50,000 miles next year. I do have a concern that I won’t pay $6,000 for those miles though. Every other tier has increased 20% in revenue as well – so it is a good possibility that I am going to fly 50,000+ miles and only hit Premier Silver status because of spend. Then again, that sounds like a problem for 2016-Tim. Current Tim (and by extension 2015-Tim) only has 1,800 more un-booked at this time – I was golden, then two of my work trips got cancelled! — miles to go (already hit my spend requirement) to ensure my Premier Gold status remains intact for 2015.
How do these changes to the MileagePlus treat you? Are you afraid you’ll be relegated to Silver – or god forbid, a General Member? What is your strategy in meeting these new thresholds in 2015?