So the buzz all last week was about United following Delta’s lead in requiring a minimum amount of spending commensurate with the status level you want to achieve.  For both airlines, you must spend an average of 10 cents-per-mile(CPM).  Readers of this and other blogs know that a good fare for mileage runs is 4 CPM.  That is a pretty significant gap.  Obviously, this requirement will stop the folks who achieve status solely through gaming the system with cheap fares.  Ironically, I know of almost no one who gets their status solely from mileage running.  With a couple of exceptions, everyone has a mix of work and leisure flights that determines where they end up with status and only do mileage runs to get to that next rung of the ladder.

So I did a little analysis of how hard it will be starting in 2014 to earn your status.  Using GSA City Pairs and the set fares for FY13, I pick a range of short haul, mid-haul, and long haul flights that I think are typical of the military or government traveler.  They are listed below with the flight, contract airline, cost, miles earned, and the CPM.  I did assume everyone flying would get the 500 mile minimum although that is not always the case.

GSA City Pair CPM Analysis
City Pair Airline Cost Miles CPM
DCA-FAY US $ 199 500 40
COS-DFW UA $ 165 592 28
PHL-ORD US $ 209 678 31
ATL-TPA DL $ 174 500 35
SAN-DCA DL $ 244 2276 11
LAX-IAD UA $ 308 2288 13
EWR-SEA AS $ 279 2402 12
MCI-SFO UA $ 229 1499 15
SEA-HNL AS $ 339 2677 13
PDX-ANC AS $ 439 1542 28
MIA-PTY UA $ 497 1152 43
IAD-KWI UA $1,516 6575 23
HNL-MNL UA $ 557 5302 11
ORD-FRA UA $ 792 4343 18
TYO-SEA UA $ 642 4797 13
TOTALS/ Avg. CPM $6,589 37,123 18

As you can see, the short haul flights generate a high CPM.  The trouble is they also generate very few miles and we need both to qualify.  In genreal though it is still not bad.  You can see the wide variation in CPM for flights.  My conclusion is that you are just going to have to start monitoring in two stats through the year, both cost and miles.  One good bit of news is that since the USG requires us all to fly U.S. carriers we don’t have to worry about flights on foreign carriers not counting towards the total.  Watch this on your personal travel though.  For personal travel, you also need to watch the miles earned, as most notably Delta, have reduced the amount of miles earned on several carriers.  United even stopped crediting miles earned on those cheap Turkish fares from earlier in the year.

I worked up a formula for qualifying (there’s the engineer in me again) to figure out ahead of time what your chances of making a given level are on UA or DL.

(% business travel x avg. CPM) + (% personal travel x avg. CPM) >= 10 CPM

Looks like most people will be OK if at least a third of their travel is at the higher CPM associated with business travel and the rest at a lower CPM for liesure travel.  Remember mileage runs are considered good at 4 CPM, so they can get you the miles, but too many of them will make you fall short of the monetary requirement.  I guess that was the point of this “enhancement” anyway.  Hard to believe the airlines went to all this trouble just for us few savvy travelers out there!

Posted by glenn | 3 Comments

3 responses to “How do the New Spend Minimums Affect the Govt Traveler?”

  1. Jason says:

    I would hope Govt travelers are more focused on their job than aggregating miles. They are using public funds and should be responsible. Every flight should be questioned and challenged if needed.

    Enough waste happens in the public sector.

    • glenn says:

      @Jason – I don’t think Government travelers make up trips to get more miles. We all have supervisors that have to approve trips. Getting miles and status is just a fair side benefit for all the hard travel that we do. After all, we MUST travel in coach unlike many in the business world, so status means an occassional lucky upgrade. The point of the post was just that we need to start counting dollars as well as miles to gain that precious status on UA or DL. There is already a system in place so that a government traveler cannot simply select a more expensive flight or with an out of the way connection.

      Glenn

  2. […] My wife and I are among many FF that find it worth spending the money to “fly nowhere” although we often turn it into a weekend vacation.  Two of the major airlines are actually taking steps to end this practice. Delta started a requirement for this year to also require a minimal spending amount just as they had also required a minimal EQM amount for each status level.  United followed and they both started that practice this year.  They did leave a major out from the spending requirement.  Spending $25,000 on Delta’s CC negated the spending requirement for any level.  United almost did the same, except the did not exempt their highest level, 1K.  I was frankly OK with this requirement as business flights often were above the minimum spend so the cheaper Mileage Run tickets kind of balanced that out.  Making it harder was the fact that they only counted the actual fare dollars and not the taxes or fees.  I did a pretty through analysis of how this affected flyers who used GSA fares here. […]

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