FlyerTalk Forums - View Single Post - UA's PQD's - I'm paying too much for my tickets!
Old Nov 16, 2014 | 10:51 pm
  #29  
JohnMacWW
 
Join Date: Dec 2010
Location: Sacramento, CA
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Originally Posted by johnden
The secret to PQD is not thinning the least valuable elites, although it's a benefit. The most important part is to stop US elites from booking *A tickets with other airlines and earning UA status without UA seeing any money. ....
I think both are a sought after reason to do it. From UA's perspective, PQD gives them both: they thin the ranks of elites based on spend and they encourage more spend that they benefit more from. UA was faced with a decision of whether or not to add PQD like DL had and these were two reasons why it made sense. The toughest question was where were the best places to set the bars/ spend levels at. Too high and the drive off more business they get in added value. Too low and they miss a chance to maximize value. I think the quick bump up in PQD for 2015/2016 is a sign that the early feedback from the 2014/2015 cycle was they the could set it higher without turning away too many miles. So they set it higher.

From a economic perspective, they should keep raising the bar until they see a drop off in elite qualification rates. They are, in effect, testing the actual elasticity of demand for elite benefits until the find the price point where demand drops off more than its worth to them.
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