United Airlines (UA) announced what I have said before was coming… they have added a minimum spend component to qualify for UA elite status. Very similar to the Delta program I wrote about earlier this year, it will also take effect at the beginning of next year. Details about the changes to the UA program can be found here.
Like Delta’s Medallion Qualification Dollars (MQD), United’s Premier Qualification Dollars (PQD) are earned on either United flights or flights operated by Star Alliance partners that are marketed by United. Delta’s flights, for example, must be ’006′ tickets while United’s qualifying flights will be ’016′ ticket stock.
Whereas Delta’s Diamonds need to meet a $12,500 minimum spend, this is still comparable to United’s requirement of $10,000 for 1k. The reason for the similarity is both must achieve .10/mile – Delta requires 125,000 miles while United is only 100,000. However, a huge difference is that Diamond Medallions can meet the waiver qualification with $25,000 in qualifying credit card spend on a Delta-branded American Express card. There is no waiver allowed for United 1k’s.
Another noticeable difference between the programs is that United says purchasing Economy Plus seats will count toward the PQD. Delta has not announced if any seating or onboard purchases will be credited to MQD. Lastly, you will need at least four United segments a year for elite status which, under the new rules, should not be a concern except for those who fly only international on partners. Delta has no comparable requirement.
So what does this mean? First, it only applies to those who have elite status with one or more of the legacy airlines. It certainly makes it more difficult to maintain mid-level status with two or more legacies because of the minimum spend component. However, frequent fliers who meet the spend waiver requirement through credit cards may be able to allocate the charges in such a way to continue status with both airlines.
UA’s Silver, Gold, and Platinum elites can meet the minimum spending requirements by waiver using a Chase Mileage Plus credit card with at least $25,000 in qualifying annual charges. Presidential Plus cardholders are exempt, with no minimum spend. Well, up to the Platinum elite level anyway.
The lack of a “back door” credit card waiver for UA 1k’s to offset the minimum spend requirement means a certain reduction in numbers for this status level. This won’t affect most business travelers who easily meet the .10/mile net cost for flying but it will have a significant impact on mileage runners who enjoy top tier status while flying on much lower fares. Others who book Star Alliance tickets directly with partners but credit mileage to United will suffer as well since these tickets may not earn any PQD’s.
The next shoe to drop? Watch for United to limit the amount of PQM’s earned from Star Alliance partners.
Will the least expensive fare buckets earn even fewer PQM’s? Probably in the future but this may be a year away. However, I do expect United will increase the miles required for award redemptions, maybe not as high as Delta but nevertheless above present levels.
With both Delta and United onboard with a minimum spend requirement, will US/American join them? Absolutely, though this will take longer because of the merger. My guess, they will follow about a year later. As I said before, we are maybe in the middle of downward changes to the frequent flier programs before benefits turn up again. Hold your breath for a couple more years.
A couple reminders… these new rules only apply to those with a U.S. address. Also, the qualification begins in 2014 for the 2015 calendar year. That means it is business as usual next year for those who qualify this year.