United/Continental elite program changes coming

Well, United and Continental have announced some changes to their mileage program for next year to further align the programs. Based on this thread on FlyerTalk, you would think the world is coming to an end.

Before I provide my thoughts, check out the changes on the United side here. To summarize:

  • Elite qualifying miles from Continental and United will be merged at the end of 2011 to count towards elite status with the combined airline. In other words, if you earn 50,000 elite qualifying miles next year on Continental and 50,000 elite qualifying miles on United, you’ll earn the top tier status.
  • In the past, 1Ks earned two confirmed regional upgrades for every quarter in which they fly at least 10,000 miles on United, for a maximum of eight per year. Now members earn two confirmed regional upgrades for passing 75,000 elite qualifying miles, and another two for every 25,000 elite qualifying miles earned beyond that, with no maximum.
  • 1K will still require 100,000 elite qualifying miles, though they have upped the segments required from 100 to 120.
  • Nothing changes with systemwide upgrades on the United front, though Continental systemwide upgrades now have the same fare class requirement that United has.
  • United is creating a quasi-elite tier for those that earn 75,000 elite qualifying miles, giving them upgrade priority over other Premier Executive members.
  • Continental’s Presidential Platinum program will be merged into United’s Global Services program.

People seem to be really ticked off by these changes, and to a certain extent I can understand. But there are added benefits with these changes for some. In my case, actually, I’ll be better off with these changes than I was before. There will (theoretically) be fewer 1Ks since United raised the segment required to reach 1K, and as a 1K that logs about 250,000 elite qualifying miles per year, I’ll be earning an extra eight confirmed regional upgrades. So that’s a huge win for me. The only reason I mention this is because some people are saying there’s no upside to this for anyone.

Anyway, let me briefly tackle these issues one by one. United raising the segment qualification requirement for 1K is downright stupid. On a per mile basis, I’d be willing to bet that passengers qualifying for 1K on segments are much more profitable than passengers qualifying on miles. 100 segments is tougher to fly than 100,000 miles, so to raise that requirement doesn’t seem like a smart move. That being said, as a numbers guy I’ve always been annoyed by the fact that it took 30 segments to qualify for Premier, 60 segments to qualify for Premier Executive, and 100 segments to qualify for 1K. Where’s the logic in that? Now, I think it would make more sense to change the requirement to 25, 50, and 100 respectively, but at least they’re consistent now. Still, that’s not a smart move, in my opinion.

On the confirmed regional upgrade front, there’s no doubt it’s a huge loss for most. Someone that earns around 100,000 elite qualifying miles per year is losing four confirmed regional upgrades per year. On the other hand, those Premier Executives flying over 75,000 miles per year are gaining two confirmed regional upgrades. And finally United is offering an incentive for flying over 100,000 miles per year beyond the two systemwide upgrades for every 50,000 miles flown. Ideally it wouldn’t come at the cost of a current benefit, but I can see where they’re coming from. I have a feeling United is very much going to adopt the Continental pricing model of instant upgrades on full fare tickets, and eliminating advance upgrades as much as possible will help them in meeting their goals with that.

I think it’s very smart for United to differentiate Premier Executive members that fly 50,000 miles vs. 90,000 miles, so the quasi-elite tier at 75,000 miles makes a lot of sense to me.

So while I personally benefit from these changes, I’m trying to be objective here — with the exception of raising the segment requirement to 120 in order to achieve 1K, these changes are reasonable. Positive? For the most part, no, but reasonable given the size of the merger. Now, are these the changes in the months ahead that Jeff Smisek thinks we’ll like? I hope not. 😉

Comments

  1. Personally, I’m disappointed with these changes. The only thing that I was somewhat happy was no mention of changing the MM or 2MM requirements or benefits. Based on your recent post, I was worried those would be brought up, but they weren’t. *whew* Dodged that bullet (at least for now).

    But losing 4 regional upgrades a year, in my opinion, is huge. These upgrades are great in that I can *attempt* to upgrade my friends and family. My grandmother is 93 years old and lives across the country. Being upgraded on a transcon flight really makes the flight manageable for her. Am I now going to have to use miles and co-pay? Or use a SWU for a Region 1 flight?

    So now I have to fly 150,000 miles to maintain what I used to get, and all of the upgrades will come at the end of the calendar year. Meaning I’ll have none to use early in the year, plenty to use at the end of the year? And if I don’t fly more than 100,000, I’ll have to wait possibly another 6-7 months just to get another two the following year?

    Now I have to fly 75,000 (which if I fly an average rate throughout the year), means 3/4 of a year before I even get 2?

    They are also great for those 319 Monday morning (or Friday redeye) flights where getting a UDU is risky and you really want to be up front.

    What about PS flights? *sigh*

    I fly quite a bit for business so I don’t need a lot of MRs, but for those who MR just to maintain 1k status, there’s no real need to fly more than 100,000 miles in a year. Meaning they’ve just lost 4 upgrades.

  2. To me, this is just short of declaring the new program will be 4 tiers. The special sub group of 1P just aligns perfectly with what would be the new tier, and the 1K segment increase also supports this

  3. It isn’t a “quasi-elite” level at 75K. That won’t really go into effect until the 2012 program year and this is simply a signaling from the companies that the new program will have 4 published levels – 25/50/75/100K – plus the GS unpublished level.

    As for segment grunts being more profitable, I disagree. When folks start turning simple transcons into 4 or 5 segment epic journeys they’re destroying the yield that the company can realize. Combine with the fact that average stage length suggests that the 25K:30Seg ratio is probably more reflective of the reality of what’s flying and it makes a lot of sense. The fact that basically everyone else does it that way, too, should seal the deal IMO.

    At the end of the day some folks win and some lose. It isn’t an outright pillaging of benefits against any one group and overall the changes are not nearly as bad as they could have been.

    http://boardingarea.com/thewanderingaramean/2010/11/details-of-the-2011-unitedcontinental-elite-programs-announced/

  4. Irrelevant of the changes being good or bad, the Facebook group for United continues to be hilarious. It is a great example of a mob forming! Everyone threatens to leave over every announcement – do they really feel the grass is that greener elsewhere!

    As a 1k with 101,000 in 2009 with the dEQM, about 150,000 in 2010 without a dEQM and somewhere between 100,000 and 160,000 in 2011 then overall this isn’t so bad for me.

    The regionals coming at the end of year suck, but I wouldn;t complain if they traded it for mileage tickets being eligible for unlimited upgrades for instance.

    But thats just my 1.3p

    (it’s like ‘My 2c’ but I am an expat Brit 😉 )

  5. At least you admit that this benefits you before go about pouring Jeff’s Kool-Aide. For perhaps the first time ever, I think Gray might have a more accurate take on the subject.

    Don’t worry Ben, we’ll welcome you back into the ‘CO sucks’ club as soon as Jeff announces that E+ is going bye-bye, that SWU’s are no longer transferable, and that skykits will now be redeemable for an on-board beer. Don’t laugh, I expect 2 of those 3 within the coming year.

  6. @Nate, I called MP this morning regarding MM benefits, because the website was silent on whether or not we would keep *G and whether or not we would receive our 2 CR1s on 1/1 of each year. The CSR said there was no information that it was going to change and there was no information if it were going to remain the same.

    Additionally, adding in the additional 75K tier pushes the MMs down further in the pack. Instead of being in 3rd place they drop down to 4th.

    The CSR I spoke with also didn’t quite understand how I was losing CR1s until I explained it to her. She said they only received the information last night around 6:30. They have not had a chance to comment on it, but would be forwarding my comments on the matter because, in her words, things could change with feedback.

    I reminded her that I needed to make my decision regarding whether or not to fly with UA shortly and would have to base that decision on what they announce are the changes now, not at some uncertain date in the future.

  7. @Pat – thanks for posting. That is interesting – there could simply be a communication issue here, in that there is no intended negative change on the regionals, but just simply worded wrong. Would seem odd to announce it the way they did if indeed it is as negative as it sounds.

  8. Biggest thing you’ve missed is that SWU now deposit when you cross 100k rather than the start of the year. Not good.

  9. I am not happy with the loss of half of our CR1s for a flyer earning 100K EQMs will now only earn 4 CR1s instead of 8: this is a reduction of benefits. The inability to earn CR1s in each quarter an having to wait until 75K EQMs is quite a disadvantage.

  10. @TonySCV

    +1

    Remember a while back when United switched to UDU and toyed with the idea of getting rid of Regional upgrades altogether? And then, I’m assuming, hundreds of irate loyal United MP members either called or wrote in and then a few months later the regional upgrades suddenly came back?

    Does anyone think this might happen again? And if so, who should I call or write?

  11. I’d argue that automatic updates for full fare is already happening. I fly full fare for business and whatever is cheapest for personal. I’ve been immediately upgraded on the full fare trips even when it is 5+ days out.

  12. Lucky, I understand you think the changes are “reasonable,” but frankly it’s hard for me view this judgment apart from the fact that they will benefit you personally.

    This new scheme creates a benefits “donut hole” which significantly penalizes people in the middle while improving the lot of those on either side of the hole.

    For EQM qualifiers, those who fly between 75,000-99,999 EQM are winners in two ways: (1) they get 2 CR-1s they wouldn’t have gotten before and (2) they now have a new level of priority over 1Ps. On the other side, those who fly 150,000 EQM or more either stay the same or are winners: at this threshold they will have earned 8 CR-1s just as previously, and at 175K the begin to earn CR-1s beyond what they would have had before. But those who fly between 100,000-149,999 EQM — not an insubstantial number of 1Ks mind you — are losers. They simply get less than they did before. Why you think it is reasonable to reward pax who fly, say, 80K EQM, but penalize pax who fly, say, 110 EQM is beyond me.

    The hole is even bigger, of course, for EQS qualifiers. Under the new scheme, those who fly 90-99 EQS win, as do those who fly 180 or more EQS. But between 100-179 EQS, everyone loses CR-1s over what they get now, and particularly those who fly between 100-119 EQS who won’t even make 1K. How is this reasonable?

    In the end, if what they wanted to do is cut benefits, then just cut them. But to GIVE benefits to those who fly LESS in the form of a new elite level and CR-1s, while at the same time TAKING benefits from a big chunk of the people who fly MORE in the form of fewer CR-1s, is a slap in the face.

    100,000-149,000 EQM/91-

  13. @as219: Well said. It’s insane that ANY 1K should ever be considered to be part of the ‘middle class’ squeeze, but that’s exactly what is happening. I really like your explanation — it’s classic ‘redistribution of wealth’ theory. And naturally, those who benefit, are in favor of it!

    Don’t worry, once SkyKits go the way of International First Class, Ben will be back on our side. 😉

  14. I am curious about the upgrade priority order on CO vs UA metal. It appears that the new 75K level will make it easier to blend the two elite tierings in the upgrade priority order, putting the Plats and 75K UA flyers into the same pool and allowing them to code consistently between the systems.

  15. As a frequent DEN to PEK traveler, I can back up your point that gaining 1K on miles is a lot easier. For me, it only takes 8 trips from DEN to PEK to gain 1K, with a total of 32 segments.

  16. Well, looks like UA at least relented for 2011. And for Mr. Lucky this means 24 CR1s next year (assuming 250k EQM).

  17. Well, next year I’ll hit that magic 1,000,000 EQM on United and have been a 1K for the last 5 years, but honestly its been a lot of work. I fly between Denver and the Pacific coast line, amassing miles runs roughly the same as segments, so when I’m hitting 100K miles i’ve hit 100 segments and I’m literally bushed. Think about it, 100 segments means you’re doing a round trip 50 weeks a year. If I had to do 120 segments then I’m flying more than 2x a week for ten weeks out of my year. The last place I want to be is on a plane even more… sorry, but there’s got to be more to life than waiting to be patted down by TSA or sitting next to that fat guy that forgot to bath this month. After I hit the 1,000,000 i’m taking my business else where figuring that I’ll earn a better deal focusing on an airline that wants my business. BTW, I added up my flight expenses, and I spent over $35K on United last year. Maybe they should look at it a different way, and calculate the total spend for their 1K status.

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