Wednesday, October 23, 2013

United Award Accelerator

Now that we're getting closer to the end of the year, it's my family's time to think about what to get me for Christmas see how we're progressing towards our 2014 Elite Status qualifications.

As far as hotels go, my parents are in pretty good position after our epic year where we will have stayed 136 nights at hotels and having various hotel co-branded credit cards. Most of the status is held by my father, but that's OK since the entire family can benefit from his complimentary suite upgrades, wifi and  breakfast perks when staying at a hotel.

However, our airline status is another story. Each individual must have their own status. But based on the flights we have booked for the rest of 2013, my mother was going to miss United Silver status by just 1,749 miles (coincidentally, about the same number of miles a round trip flight would be from New York to Orlando) Hint hint, Mom & Dad.

I know what you're thinking, "But didn't you guys fly all over the world this year? How could she not have hit 25,000 miles?"
  1. First, we flew a lot of our long distance flights as awards using our miles (Thailand, Germany/France and Israel) which don't earn any frequent flyer credit for the total 28,676 miles flown.
  2. Second, my mother credited many of the Q1 2013 flights to Aegean Airlines so that she could earn "lifetime" Star Alliance Gold status with them (by flying 20,000 A3 miles in a 12 month period).
The Problem
So after March 31, 2013, it was all about crediting her flights to United Airlines. Unfortunately, our long return flight on TAM Airlines from Argentina was mistakenly credited to Aegean (instead of United) even though we had her United frequent flyer number on the boarding pass. That was it - the reason my mother was going to miss her United Silver status for 2014.

So after we saw the wrong frequent flyer account credited, we tried calling TAM to remedy their mistake, but we were told that the transaction was irreversible.  So now, my mother had extra Aegean miles (24,656 A3 miles vs. the 20,000 she needed for Aegean/Star Alliance Gold), but would fall short on United miles (on track to 23,251 UA miles vs. the 25,000 she needs for United Silver).

The Solution
Over the past few weeks, my father has been thinking creatively for ways my mother could fly that extra 1,749 miles before December 31st.

  • Remaining Christmas Trip? We did have our Christmas trip still unbooked. However, we were planning on using our British Airways Avios miles to fly on American Airlines and avoid the high holiday ticket prices. So if we wanted my mother to earn miles, her ticket would have to be on United and paid for in cash. She wasn't too keen on flying on a different flight by herself while my father and I were on a separate flight.
  • Extra Trip? We didn't have any plans for November, so in theory we could have booked a new trip to go somewhere like Florida, New Orleans, etc. and made a long weekend out of it. However, we were already going to Phoenix in late October and somewhere in mid-December, so forcing another vacation in November would sort of been a waste of money and time. Additionally, I would be over 2 years old and would require a paid 3rd seat.
  • Mileage Run? Some frequent flying enthusiasts book exceptionally cheap tickets to far away airports just to immediately turn around and come back on the next flight. Most of the time, they don't even leave the secure area of the destination airport. For example, back in June there was a deal where a Philadelphia-Las Vegas round trip was being sold for $178. That would earn you about 4,000 Premier Qualifying Miles (PQM) towards elite status and 4,000 redeemable miles (RDM) to use for awards. While this approach may at first seem crazy to many of you, it's can actually be a pretty sound investment, especially since the people who do this maneuver are usually already elites earning up to 100% bonuses on the miles flown. So on this deal, they're paying $178 for 4,000 PQM and 8,000 total RDM that are worth $160-240 assuming you can redeem for 2-3 cents per mile. However, my mother was definitely not the type who would enjoy 10 hours on a plane by herself!
Award Accelerator
So we were running low on options if we wanted to maintain her United Silver status through next year. But thankfully, United will sell extra miles (both redeemable and elite qualifying) as an add-on to your existing itineraries. If you click on Award Accelerator on any of your booked reservations, you will see an option to buy extra miles (both redeemable base miles as well as the elite qualifying miles).

Now, in this case, my mother only wanted the Premier Qualifying Miles (PQM) that would help her earn United Silver status. However, to be able to buy the Premier miles, you also had to buy the redeemable base miles (RDM) at a price of around 3 cents/RDM. Then and only then was she given the option to buy the Premier Accelerator for an additional cost of 7 cents/PQM. Depending on how many miles you're offered, it can get quite expensive quickly.

The bad news is that United understands the value and consumer demand of these miles, so they're priced accordingly. In fact, United's computer algorithms actually calculate how close you are to the next elite tier, how many more miles you'll earn on booked reservations and how close it is to the end of the year. Then the computer offers you a price that reflects how likely you are to buy your way to the next elite tier. 

Meaning, if it's December and you're just 2,000 miles away from the next tier, the per mile price will be MORE expensive (10-14 cents/PQM) than if it were April and you were a long 15,000 miles away from the next tier (7-8 cents/PQM).  

They will also offer you larger blocks of miles that are often in excess of what you would need. So even when you're just 1,749 miles away, you're offered 14,000 miles (based somewhat on the actual distance of your upcoming flight) as an all-or-nothing option. United knows you only need 1,749, but obviously wants you to buy in bulk.

However, the good part is that the miles that you purchase do transfer immediately - even if you cancel the actual flight later. Some frequent flyer enthusiasts will even buy a long distance ticket online just to purchase via the Award Accelerator and then cancel the ticket within the first 24 hours for a 100% refund of the flight cost (not the Award Accelerator). The purchased miles stay intact. 

My Mother's Situation
As I mentioned, we were only 1,749 miles away. The only United flight we had for the rest of 2013 was our free one way to Phoenix later this week. 

Even though it was an award flight, after logging into my father's United account to view the reservation, they still offered the add-on option of Award Accelerator for both him and my mother. Oddly enough, they offered each passenger 2,133 miles for $62 but asked you to input your United MileagePlus account number. Usually, they offer a rounded up amount of miles based on the 2x actual distance of the flight (such as 4,000 miles), but this time, they seemed to be offering just the exact mileage of the flight. When we clicked on Premier Accelerator, it offered 2,133 PQM for $150 more. So we input my mother's United MileagePlus number and when the amounts stayed the same, we made the purchase of 2,133 RDM and 2,133 PQM for a total of $212.

Interestingly enough, if we input my father's United MileagePlus number under his name, United offered him either (a) 9,000 RDM for $261 or (b) 11,000 RDM for $319. Then if you clicked on Premier Accelerator, it offered him 9,000 PQM for an additional $1,080 or 11,000 PQM for an additional $1,340. There's that United computer algorithm up to its usual tricks again!

The Math
Since I'm half Asian/half Jewish, you know I love to break down the $ of the deal.

My mother paid $212 total for (a) 2,133 RDM that she can redeem for future award flights and (b) 2,133 PQM that can only be used to help her achieve elite status this year. While $212 is a lot of coin to pay, it's actually a pretty sound investment for someone in my mother's situation. Here's why.
  1. The 2,133 RDM alone are worth around $42-63 to her, assuming she can redeem them for 2-3 cents/mile in a future award booking. 
  2. Elites earn bonuses on their mileage flown. Silvers get an additional 25% RDM on their United flights. These purchased 2,133 PQM are the difference between having Silver status or no status for early 2014. Next year, we plan on flying around 50,000 miles on paid United flights and credit all the flights to United. After reaching 25,000 miles next year (estimated mid-May), she will earn Silver status and her 25% bonus for the remainder of 2014. But those first 25,000 miles in 2014 will be earned as a non-elite with 0% bonus. But by having Silver status as of January 1, she will earn the 25% bonus on her first 25,000 miles. Those bonus 6,250 RDM next year are worth between $125-187 to my mother.
  3. Having Silver status will allow her to be eligible for complimentary domestic first class upgrades as well as free checked bags. Selfishly, this point is my father's biggest concern since her inability to get upgraded essentially means HE will not get an upgrade, because he would never leave her behind in coach while he sat upfront.
  4. Using our Chase United Select credit card, we earned 3x for all spend on So the $212 earned us another 636 United miles ($12-18).
  5. Hours spent on a plane = Zero!
  6. Cost of getting to/from the airport = $0.
So between all those RDM, that's $179-268 of RDM value which just about covers the $212 cost. Then add in the possibility for upgrades (higher since my father will have United Gold status which gives him companion upgrades as well) and free checked bags, Award Accelerator and Premier Accelerator in this situation was definitely worth the cost.

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