United announced on Friday afternoon that they would increase the spending requirement for their 1K (100,000-mile elite) members from $12,000 per year to $15,000. This is an effort to thin the herd as they have too many top-tier elite flyers. If United wants fewer 1K customers, I will be the first to start them off.
Delta Did It, United Follows
In 2014 Delta moved their elite requires for top-tier elites (Delta Diamond) from $12,000/year and 100,000 elite-qualifying miles to $15,000 and 125,000 miles flown. American and United didn’t feel obliged to follow though American did add a revenue requirement as the only carrier without one to that point. Playing copycat to Delta is nothing new as United and American continue to outsource their management decisions to Delta.
Is Any US Carrier Going to Differentiate?
Before the merger mania that swept the US Airline industry, programs differed widely. During a short period of time (relative to the history of the carriers), Delta and Northwest, United and Continental, and American US Airways, Southwest and Airtran and most recently, Alaska Airlines and Virgin America consolidated in the airline industry. Prior to this round, in the early 2000s US Airways and America West merged as did American and TWA which created the world’s largest carrier at the time.
The fear of those who challenged the mergers was that too few carriers would reduce competition and increase prices for consumers. That fear has yet to be realized as airfare is the cheapest it has ever been right now. However, for frequent flyers, an unintended consequence of the merger madness has been the general amalgamation of the loyalty programs.
As a business person, I want to differentiate my product as often as possible. If my competition sells Coca-Cola, I am… bad example, no one should ever choose Pepsi. If the competition releases 6% of their seats for awards, I’d release 7%. If Delta decides to reduce the number of upgrades they give their elites, why follow?
If one of the major carriers decided to enrich their program rather than “enhance” and deteriorate, I would imagine it would actually drive the marginal business everyone is chasing and bring in new business from those that are disenfranchised at the other carriers.
It’s an Unreasonable Amount
It’s important to note that if you spend exactly $15,000 on your tickets and fly at least 100,000 miles you will not qualify for 1K status. How so? Taxes and fees, my friend. Unfortunately, taxes and fees count when they hit your credit card, but not toward your Premier-qualifying dollars. If you fly internationally you’re hit the hardest. Premium fare fees and taxes in and out of the UK can be nearly a thousand dollars for example (Air Passenger Duty) but even flights back and forth to Mexico can see more than $100 of your ticket cost ineligible for elite qualification.
If a 1K flies purely domestic flights, they’d likely spend at least $16,000 out-of-pocket. If they fly internationally, however, flight costs would probably exceed $18,000 and maybe more depending on what those flights were. In my case, personally, I have spent more than $11,000 on business and personal flights so far in 2018 but have just $9,645 PQDs. By the time the year has ended my $12,000 in PQDs will likely mean more than $14,000 spent on tickets, taxes, and fees with United.
There are some power users in between 1K status and Global Services that will cheer United’s decision on clearing more upgrades for them over barely 1K fliers like me. But that group is really, really small and this change isn’t going to get them into a club they weren’t already in.
More than anything else, my experience as a 1K hasn’t really been that great. Every carrier has service issues including weird ones like this, but the biggest issues are experience and ease of use. The Polaris lounges are great, but the opportunity to use them remains fairly rare. United is still flying a 2-4-2 business class configuration as long as 14-hour flights and they charge more to use Systemwide Upgrades with a minimum (expensive economy) fare class.
On the other side, American lets you use SWUs in theory on any fare, but in reality they rarely open space in advance. They have a better hard product, but an inferior soft product. I clear upgrades on both carriers domestically at a near identical rate. I also prefer American’s elite earning on partners (based on class of service and distance) rather than simply ineligible.
Delta is out (same MQD requirement, higher mileage requirement) based both on the ability to earn/retain status with the carrier and my complete distrust for the brand. Early in 2019, I will credit long-haul Korean business class flights to Alaska which will help me achieve Mileage Plan status.
What do you think? Has United gone too far with their “$15,000 PQD” requirement? Am I just sour grapes because I know I probably can’t make it next year? Am I naive to think that American and Doug Parker won’t follow right behind and do the same?