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?
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Status Re-qualification
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.
The Offer
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.
Conclusion
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?
FYI – RPUs do apply to premium transcontinental routes as well as all US Long Haul routes to Hawaii.
@WHS – I forgot that they are supposed to technically work on those routes, though success is limited. Nonetheless, I edited the post to this end.
I would not, unless I just needed a few to get to the next level. I have been 1K for several years. I mainly care about getting into business class on international flights at a reasonable price, and my dates are relatively fixed, give or take a day. I will not waitlist. This year, I’ve only been able to use 2 GPUs for TATL. Other times I’ve bought the cheapest J. That used to often be UA- which is how I became 1K- but this year, the UA TATL prices have been among the highest, and there has been no PZ when I needed it. Consequently, I’ve bought BA Club World three times this year for $2.3-3K when the UA Polaris price has been $6-9K. I’ll wind up at gold or plat. (I’m also Plat Pro on AA, so get free seat selection on BA, which is worth 300 or so per trip.)
I’ll miss boarding before Group 1, bu t I’ll live. And a consolation is that the BA soft product is better, while UA’s has gotten worse.
I have flown 41 segments on United as a 1K.
I am 2 Upgrade, 39 times in coach.. all on high last minute fares. Mostly FLL-IAH to wherever. I hate SkyMiles but whatever Delta is doing to monetize first class, I can say they still left me plenty of uprgades when I was Diamond. I was 60/40 on DL… 5% on UA. Also.. how can anyone deal with UA wifi? Who would go for status on this airline?
@Ryan – Definitely not a good deal for you, then. Two thoughts come to mind when I read your comment. One, buying high dollar last minute tickets may not afford you some of the upgrade percentages I have experienced because some of those upgrades for other passengers clear as far out as four days prior. Second, what is your departure airport?
Interestingly, because RPUs and GPUs can be sold, we do have data on their relative value. The sell on eBay for $200 (RPU) and $500 (GPU), not far from your valuations.
@JBM – I would imagine that was a violation of the terms of the program. I know at American it was. Nevertheless, we have to establish a value at some point to know whether or not we are getting a good deal. I’m glad to hear the market has validated my figures, though I would also put some caution on the GPU price as sometimes they do not clear, and therefore lose value.
I have bought PQMs on United a few times in the past to push me over the 1K threshold. Like you I always had enough PQDs but was short on PQMs.
However, I only bought PQMs when they were offered for around 10 cents per PQM. I did it maybe two or three years. I don’t think I would ever pay 20 cents unless I only had to buy a few.
nov 3-4 DFW-PEK (booked on Canada Air) until Dec 12 $810 or less.
Destroy a couple of weekends.
Dropped my 1K/status chasing after a decade. I buy whatever nonstop is available for where I need to go, biz class upgrade when I want to, and a $1200 United Economy Plus global +8 subscription for when I travel with family and friends. Me +3 in E+ next month to Asia, me+8 in E+ to GCM in Feb. Usually pays for itself in a trip. I have flown 3000 miles to date on United after being 1K for years and Delta Diamond for years. Wouldn’t go back for anything.
Back when UA elite status was worth something (1K and debatably plat) ….. aka before revenue based earn not to mention the impending spend—and arguably before PQD…. buy PQM was pretty much like lighting cash on fire in the vast majority of cases, IMO. YMMV
If you need only a few pqms why not phone um up, and explain that you have given them your loyalty, and specifically your spending, having more than requalified by spending, but you are short a few miles and would like THEIR loyalty and the bump in status comped? This was worked on both American and with spg for me.
If they come back and offer to sell you pqms, ask them if they really think that a loyal customer who more than requilified via spending should have to pay money to NOT fly. If they still don’t go for it, ask to escalate to a manager and eventually politely suggest you might have to reconsider your loyalty if they don’t relent. Tell them about the status challenges being offered by Delta or aa.
If it doesn’t work, hang up and call in to try again. Maybe a few times.
I love this!
International seats are just so cheap right now, The 1k spend requirement is totally disconnected from the market, after 10 years I have abandoned 1k and gone kayak, with gold *A
The targeted PQM buy-up offers I receive always state that these purchases do NOT count towards PDQs. I’m only a platinum. Maybe they only offer that deal to existing 1Ks? OR, they bump up the $/PQM since they also count towards your spend?
Maybe it’s because I travel for business and am less price-sensitive than most (when I have to travel, I travel…) but I don’t mind the spend requirements because I am always way above, e.g. I’m already at 10K PQDs for the year and only have 54,000 PQMs.