When I logged into my United account this week, I found a familiar pitch – buying premier qualifying miles for status re-qualification. Are these purchases a good idea or crazy?
Every year United Mileage Plus members must re-qualify for status. At the 1k level, the top status available with published prices, members must spend $15,000 on net airfare (taxes and fees excluded) and fly 100,000 Premier Qualifying Miles (PQMs) or 120 segments.
I wrote earlier this year that I will likely achieve the spend target but fail to secure the miles or segments. I remain on target to finish at $20k in spend and just shy of 75,000 PQMs making me Gold, two levels down from 1k.
I intended, at that time, to utilize United’s excellent premium economy offering on flights to Zhongshan Kong and hopefully use an instrument to upgrade to Polaris.
While each offer is personalized and presumably targeted, my offer was between 19-22¢/PQM and for every 1,000, each qualifies as a segment. The amount spent on purchased PQMs also count toward Premier Qualifying Dollars so those who are short on PQDs may consider this if they are borderline.
These rates are unbelievably expensive.
Is United Crazy?
Not necessarily. Life is a constant balance between time, money and preference. For those already flying on United flights an awful lot, the thought of spending even more time away from family for an optional trip to make domestic upgrades more likely can seem idiotic – especially those based in United hubs that already see 1K travelers among them in steerage.
However, some are close to the next tier and for them, it might make sense. For example, I had a previous employer who finished every year at about $25k in EQMs on American and 90-95,000 miles. He was loathed to travel any more than he had to aa he was constantly on the road. For him, buying the extra 5,000 EQMs could have made a massive difference, especially since he was based in a hub but often flew to smaller cities where he would stand a better chance of an upgrade.
There’s also a case to be made for those at the entry-level tier who may be able to dramatically improve their redeemable mileage earning and benefits. But the value line is probably less than 3,000 PQMs for those who would just miss Silver.
Valuing 1K Benefits
Looking at the benefits received at just the 1K level and assigning a value is probably the best way to examine this as any other level would make it unconscionably expensive.
Global Premier Upgrades and Regional Premier Upgrades
Each 1K is given (6) GPUs annually that can be applied to any United or codeshare flight if booked at least at the W fare class or higher. These are more expensive than Basic Economy and many regular Economy fares. Sometimes the difference is in the hundreds of dollars. On some routes, these could be worth thousands if comparing the price difference between W fares and discount Business Class, however, United would sell the same space at $350 + 25,000 miles United miles are worth about 1.4¢/per or $350. In essence, – GPU should be thusly valued at $700.
Regional Premier Upgrades are more restrictive, applying to mostly domestic US flights and some North’s American regional flights. I most often see upgrades in this category sold for under $200.
Total value from RPU = $400
Total value from GPU = $4,200
Domestic US Upgrades
Technically, all status levels receive unlimited Complimentary Premier Upgrades (CPUs) but in reality, it’s very hard to clear below 1K or Global Services I track my upgrades and clear about 65% of the time from my home airport, Pittsburgh. I would assume (since I don’t always clear) that Platinums clearing behind me have an even lower percentage, but still clear about half the time.
Valuing domestic upgrades is harder than the instruments. I mentioned before that I can usually upgrade for just less than $200/segment on flights about 2.5-3 hours but that doesn’t mean that I would value the upgrade at that amount. Out of pocket, I might pay $50-100 depending on the day, but as most of those are work trips I don’t know that I would even spend that. Further, I also wouldn’t upgrade all of my flights if there was a cost component to it. For example, some upgrades are on very short flights where the flight only lasts an hour or so, I wouldn’t pay anything for those.
For my own purposes (you can apply your own if different) I would value the domestic upgrades at $70/each and the difference in likely upgrades (based on 75 segments/year) from Platinum to 1K would be 11 or a value of $770 at maximum.
Incremental Value of CPUs = $770
Increased Redeemable Mile Earning
As a 1K, members also receive two more redeemable miles per dollar spent on airfare than Platinum members. Assuming the member spends the full $15,000 the following year, that adds up to 30,000 miles at the aforementioned valuation of 1.4¢/mile.
Additional RDM Earning = $420
Why Is It Such A Bad Deal?
On the surface, if you add up the benefits, from Platinum to 1K, members would gain an extra $5,300 in benefits at a cost of half as much. That sounds like a great deal, right?
Not in my book.
Buying an R-class ticket roundtrip to Hong Kong from Newark in true Economy Plus seats still prices at around $1400 but earns 24,000 PQMs, about $1300 in PQDs and another 11-14,000 RDMs which buying PQMs would not do. In terms of value, status running adds almost twice the value (you’d still get the same perks plus the additional redeemable miles.)
In addition to all of those benefits, if you have a minimum of three days to do the run, you’d also have the trip to Hong Kong to enjoy. That should be valued at some level as well.
Even if a member were just 2,000 miles from any status, the chances that they could find a 2,000-mile roundtrip in standard economy for less than $440 is good, plus the member would have both the actual trip and the miles earned from their spending and flying the route.
Status running is alive and well. While for some, the offer to buy a way out of a trip may make sense, the use case is fairly narrow. I’m surprised that United doesn’t attempt to make this a more tempting offer whereby I might prefer to spend the money than actual fly the route. That would give the carrier back the seat to sell to another guest as well, increasing their overall take without adding any more inventory.
What do you think? Have you bought PQMs before (or equivalent for your carrier of choice?) Have I missed a good reason to go this route instead?