When United Airlines first decided to crack down on travelers who were achieving high status simply by using heavily discounted fares and mileage runs, they did so with relatively little fanfare.
And now, before travelers have really figured out the first major changes, which United sent in an email to Mileage Plus members earlier this year, the airline has announced they will change things again in March, 2015, in a revenue-based award system that will devalue the program for all but the biggest spenders.
But first there’s getting through 2014. (Stay tuned for “United to Frugal Frequent Fliers – Go Away – The Sequel.”) And status earned in 2014 will still partially determine how many miles travelers earn in 2015.
Starting in 2015 status will be based both on 2014 miles with United and partner carriers, but also on “Premier Qualifying Dollars (PQDs),” and there will be minimum spending requirements for each tier.
United is not the first airline to base its loyalty program on revenue. And the minimums sound straightforward — 25,000 and $2500, for the lowest Silver elite status, 50,000 and $5000 for Gold, 75,000 and $7500 for Platinums, up to 100,000 miles and $10,000 for 1k status.
Just as an example, a passenger flying one round trip a month between New York and San Francisco, but using sale fares regularly that average out to $400 a trip, would have over 62,000 miles, but only $4800. So that passenger would no longer qualify for Gold status, which brings valuable perks like economy plus seats at time of booking, double miles, and free entrance to United Clubs for international flights.
But United revenue management doesn’t really care about such bargain hunters. They want the high-yield travelers — the ones who spend money.
And for many premium travelers, the PQDs seem like a non-issue, as a business class ticket or two overseas will fill the requirements. If it is booked according to the rules. And that’s where the devil is really in the details.
In fact, some United elites, even those who regularly pay business class fares and travel internationally may be shocked to discover at the end of 2014 that they have not re-qualified.
Here’s some of the fine print that I think even seasoned travelers are missing on PQDs.
1. PQDs do not include taxes. Now, “tax” doesn’t include the insidious fuel surcharges which are not, of course, taxes but a straight airline revenue grab. But nonetheless, taxes can be significant, especially on international tickets and especially when every dollar counts.
And with all the extras at the end of the ticket, it’s hard to figure what is a surcharge and what is a tax.
2. Special fares like group fares and bulk fares don’t count at all, and while many people haven’t paid much attention to that detail, it will start mattering. Although many travelers may think of such fares as deeply discounted economy fares, bulk fares also include tour operator fares to places like Hawaii, which are often over $1000 roundtrip, and business class contracted international airfares that could be several thousand dollars. (These fares will still get mileage credit, but will not count towards the PQD totals.)
One client this year actually booked a Hawaii package through United Vacations, partly because she needed the miles, and only discovered in a casual conversation over seat assignments that she would get zero PQDs. (Fortunately, she was able to cancel and rebook at a published fare, which was almost the same as the “bulk” fare, and which did count.)
3. Ticket validation, a term that only travel agents and a handful of travel geeks have known, will become a very big deal. What is it? In plain (or plane?) English terms, it refers to what airline gets the money directly. And when Mileage Plus partner carriers are involved ONLY tickets now validated on United earn PQDs.
For many simple trips validation is a non-issue, but when two airlines or code-shares are involved, it’s a big deal. For a personal example, I recently flew to Europe on Swiss Air and back on United. The logical validation would have been to validate on Swiss, the first airline, but travel agents are allowed to validate on either over-water carrier, so I used United. Otherwise, instead of over 1000 PQDs, I’d have earned half that.
And if a traveler goes all the way to Nairobi via Zurich on Swiss, booked as Swiss, they get zero PQDs. If the flights are booked as United code-shares, they get PQD’s without flying United at all.
After a flight has been flown, United, to its credit, provides you with a running update of your PQDs on its website so that careful travelers can keep track,, possibly avoiding unhappy surprises at year’s end.
On the other hand, many travelers may be used to keeping track on their own. Or they may be paying some attention to the PQD issue but still be counting on a Mileage Plus partner flight or an unknowingly ineligible fare, to reach their required spending target..
And the system is a long way from perfect. One of my 1K elite travelers has a situation where miles were not credited on a Lufthansa flight that was booked as United, and upgraded at the airport. To make a long story short, a human at United eventually semi-fixed the problem, by accidentally crediting him as if he was booked in business class, but with zero PQDs. (Confused yet? Yeah, it’s that kind of system.)
In his case, he needs the frequent flier miles more than dollars, so he’s leaving the mistake alone for now. And who knows how many other mistakes are out there.
But if you’re a United Mileage Plus elite member or trying to become one, fasten your seat belts. And then stand by for an even bumpier ride.
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