United's Change to Revenue Based RDM Earning

[tmount]

This has been hammered by the blogsphere, but I thought I'd offer the link and discussion up here.

The link is: http://mileageplusupdates.com/

As for my thoughts: After having been a 1K for a few years with United, when they introduced the "Premier Qualifying Dollars (PQD)" requirement last year, I sought out a status challenge from America. Concurrently with that, they had the little mistake where they released especially low requirements to make Executive Platinum (EXP), and my wife was able to make EXP too. Of course it required a 72-hour (on the ground) trip to India, but such is life.

So back to the latest step. Consensus is that it was in kind with Delta. But the real question remains: Will American follow? Is this a fait accompli? Will it inadvertently lead to business travelers losing their miles (e.g. companies attempt to exert control over business travel frequent flier miles to dissuade employees from booking higher fairs)?

I think in the end, the "system" will be equalized, but at what cost to those of us "gamers" of the system.

 

[United1K]

This has been hammered by the blogsphere, but I thought I'd offer the link and discussion up here.

The link is: http://mileageplusupdates.com/

As for my thoughts: After having been a 1K for a few years with United, when they introduced the "Premier Qualifying Dollars (PQD)" requirement last year, I sought out a status challenge from America. Concurrently with that, they had the little mistake where they released especially low requirements to make Executive Platinum (EXP), and my wife was able to make EXP too. Of course it required a 72-hour (on the ground) trip to India, but such is life.

So back to the latest step. Consensus is that it was in kind with Delta. But the real question remains: Will American follow? Is this a fait accompli? Will it inadvertently lead to business travelers losing their miles (e.g. companies attempt to exert control over business travel frequent flier miles to dissuade employees from booking higher fairs)?

I think in the end, the "system" will be equalized, but at what cost to those of us "gamers" of the system.

When you look at it from a business perspective, the change is actually good. It is designed to influence low spenders to increase their spend to a more moderate level (between .10-.20+ cpm). The change will also effectively "kill" mileage runners who earn top-tier elite status; but, generate little revenue for the airline. GS & 1K flyers have complained for years about watered down elite benefits and reduced upgrades due to saturation of elite mileage runners. The PQD requirement combined with the 2015 RDM change will further reduce the number of people in the upper tier elite levels. For GS & 1K flyers who already buy higher than discount Y tickets, this recent change practically has no effect.

Those that say they are status matching to DL or AA or simple not going to fly UA anymore because of the change are in theory solidifying UA's point. The airline has a better chance of increasing their revenue by weeding out those that are not truly loyal to the airline. The amount of people that switch or won't fly the airline will make an insignificant impact on operations.

Those that do leave, will eventually notice that the grass isn't necessarily greener on the other side. UA (DL and AA after the merger is complete) is not looking for "Fair Weather" travelers. Post-merger, AA will implement some sort of revenue based program.

Those that do stick with UA and maintain/achieve elite status will notice no change to the way they reach elite status (PQD/PQM); however, in 2015 they should notice a change in upgrade availability and other benefits.

 

[tmount]

When you look at it from a business perspective, the change is actually good. It is designed to influence low spenders to increase their spend to a more moderate level (between .10-.20+ cpm). The change will also effectively "kill" mileage runners who earn top-tier elite status; but, generate little revenue for the airline. GS & 1K flyers have complained for years about watered down elite benefits and reduced upgrades due to saturation of elite mileage runners. The PQD requirement combined with the 2015 RDM change will further reduce the number of people in the upper tier elite levels. For GS & 1K flyers who already buy higher than discount Y tickets, this recent change practically has no effect.

I think if you look at it from a status standpoint, the math doesn't particularly change much; yes you get fewer miles, but those that MR for status were dissuaded with the PQD requirement, not earning fewer miles. I think the status herd was culled significantly with the introduction of the PQD.

Those that say they are status matching to DL or AA or simple not going to fly UA anymore because of the change are in theory solidifying UA's point. The airline has a better chance of increasing their revenue by weeding out those that are not truly loyal to the airline. The amount of people that switch or won't fly the airline will make an insignificant impact on operations.

The old rule still is in effect - once an airline covers its costs for a flight, filling every last seat just adds profitability. I'd argue there's a marginal risk there. Right now load factors are high, but I think the real question is - will they continue to be post - this change's implementation.

Those that do leave, will eventually notice that the grass isn't necessarily greener on the other side. UA (DL and AA after the merger is complete) is not looking for "Fair Weather" travelers. Post-merger, AA will implement some sort of revenue based program.

Those that do stick with UA and maintain/achieve elite status will notice no change to the way they reach elite status (PQD/PQM); however, in 2015 they should notice a change in upgrade availability and other benefits.

As far as those that do change - I did change, and I have seen a significant improvement in #paxex. Yes, things will change, but this game is not an "eventually" game, its a "now" game. The math changes every 6-12 months, if you don't adapt, then you just get lost in the wake.

For me - the reason to leave was because I saw no reason in waiting 2 years for domestic upgrades to be like they had been; I think I'm 10 for 11 domestic flights this year so far on American for upgrades.

 

[United1K]

I think if you look at it from a status standpoint, the math doesn't particularly change much; yes you get fewer miles, but those that MR for status were dissuaded with the PQD requirement, not earning fewer miles. I think the status herd was culled significantly with the introduction of the PQD.



The old rule still is in effect - once an airline covers its costs for a flight, filling every last seat just adds profitability. I'd argue there's a marginal risk there. Right now load factors are high, but I think the real question is - will they continue to be post - this change's implementation.



As far as those that do change - I did change, and I have seen a significant improvement in #paxex. Yes, things will change, but this game is not an "eventually" game, its a "now" game. The math changes every 6-12 months, if you don't adapt, then you just get lost in the wake.

For me - the reason to leave was because I saw no reason in waiting 2 years for domestic upgrades to be like they had been; I think I'm 10 for 11 domestic flights this year so far on American for upgrades.

The PQD requirement will reduce the number of elites, especially 1Ks. Since it went into effect this year, the thinning of the "herd" will be more prevalent in 2015. Also, the earning of fewer miles will be a "turn-off" for some, consequentially reducing numbers, not just elites.

Filling every seat does equate to profitability; however, airlines make very dollars, if that off of the lowest Y class ticket. At the end of day when the dust settles, people have places to be that require the use of air transportation, which is the primary catalyst; earning miles is secondary or even tertiary for some.

I agree everyone has their reasons for switching, whether it's for a better #paxex, financial situation, etc., and it is a "now" game. I choose to stay with UA because overall I have far more good/#paxex encounters with them than bad. My home airport is IAD, I don't want to have miles spread across multiple programs, I'm already a MM and average between 150K-200K a year, so getting to my goal of 3-4M is doable, and I have a very high success rate on upgrades whether it's domestic or international. So, I guess you can say I'm "married" to UA.

 

[tmount]

The PQD requirement will reduce the number of elites, especially 1Ks. Since it went into effect this year, the thinning of the "herd" will be more prevalent in 2015. Also, the earning of fewer miles will be a "turn-off" for some, consequentially reducing numbers, not just elites.

Filling every seat does equate to profitability; however, airlines make very dollars, if that off of the lowest Y class ticket. At the end of day when the dust settles, people have places to be that require the use of air transportation, which is the primary catalyst; earning miles is secondary or even tertiary for some.

I agree everyone has their reasons for switching, whether it's for a better #paxex, financial situation, etc., and it is a "now" game. I choose to stay with UA because overall I have far more good/#paxex encounters with them than bad. My home airport is IAD, I don't want to have miles spread across multiple programs, I'm already a MM and average between 150K-200K a year, so getting to my goal of 3-4M is doable, and I have a very high success rate on upgrades whether it's domestic or international. So, I guess you can say I'm "married" to UA.

Hah -- We're neighbors! (I joke), my home airport is BWI, but when I flew UA a lot, I probably did about 50% out of IAD (and I do enjoy that airport -- was there earlier this week for the Air China celebration). If you have a high success rate (especially at IAD) for upgrades, then you really have it as good as it gets. Flying out of BWI, my success rate, even using instruments was below 50% the last year I was a 1K... Its definitely a YMMV scenario.

If anything though, you are right - the key point of air transport is to get from point A to B; the rest of the factors that influence those of us "in the game" are secondary.

 

[WalletSlot]

As the elites thin out, my fingers are crossed that my lifetime status increases in value. It would be nice on occasion to get an upgrade.

 

[noreservations]

I'm nowhere near meaningful MM status and while I've been loyal to United since 1991 I think that is coming to an end. I feel like after the merger it was just Continental anyway (and I had always had poor experiences flying them before). It kinda stinks since I'm DC-based, but it's a mixed bag. IAD is great for the international stuff but I find that DCA being a US-focus (and soon AA) hub that actually serves me better anyway. Hopefully I'll get up to EXP fast for UDU but at least the 500 mile sticker program is pretty easy to get the seats when I know I'll want them.

The revenue-based change wasn't really even the last nail in the coffin. It was the slow decline of everything else (customer service, award redemption, moving to a government city with a ton of Y/B flyers) that really did it in for me. If I was still California-based I would probably look more at AS or VX for status.

 

[nsx]

I think if you look at it from a status standpoint, the math doesn't particularly change much

"Can we review our status, Sy? Let's look at this thing from a standpoint of status. What have we got on the spacecraft that's good?"