Earlier in the pandemic British Airways extended member elite status by a year. Unlike U.S. programs where everyone’s status expires at the same time, each Executive Club member has their own 12-month rolling calendar year for status, so some member statuses expire each month.
BA has just announced that members whose status year ends between July 1 and December 31, 2021, have their status extended by 12 more months. Some members, then, get their status extended out to December 2022.
And while BA’s system differs from that of U.S. airlines, the move points to,
- The pandemic is lasting longer than many had hoped, even though vaccinations create much hope
- Airlines weren’t initially aggressive enough in extending status, or reducing requirements for earning status this year.
Travel may pick up as 2021 progresses. People are getting vaccinated, and CDC guidance notwithstanding that means more people who ‘jab and go’. But that isn’t enough to forestall the need for status extensions.
- Business travel won’t return to 2019 levels this year. Even as it comes back, it’ll be slowly – in waves – rather than all at once. Some trips will remain displaced by zoon, client visits have to wait until offices are fully reopened.
- To the extent business travel returns to a meaningful level, it will be later in the year (perhaps September onward). Companies won’t require travel right away, many companies have committed to remote work until later in the year making trips to headquarters unnecessary, and conventions and meetings come back last (large indoor gatherings in poorly ventilated spaces).
- International travel will remain significantly more restricted than domestic travel. That means much of the distance, and heavy spend for long haul business class, just isn’t an option.
Filling planes with once a year leisure travelers doesn’t change the need for status extensions. And 20% reductions in earning requirements won’t account for international restrictions and reduced business travel.
To the extent that airlines want to keep customers who have been most lucrative in the past – to the extent they’re betting that high yield business travel will return – they need to keep customers rather than kicking them to the curb.
Telling a top tier elite who doesn’t re-earn status in 2021, because their business travel doesn’t start back up in earnest until the fall, that they’re no longer valuable is a recipe for turning a once-loyal customer into a free agent and sending them to a competitor.
However airlines will view it as too early in the year to make this sort of move. They still want to use status as a carrot to encourage flying, and to encourage customers to choose them. So they’re more likely to run status-accelerating promotions.
American AAdvantage is already cold-calling members to sell them progress towards elite status. Promotions and sales like this make it harder to straight-up extend status later. Would they refund the purchased qualifying miles and dollars? Certainly not, but those who ‘fell for it’ will be bitter.
So it seems more likely we’ll see a program like AAdvantage offering promotions later in the year, and buy backs, or even potentially targeted extensions at the end of the year rather than a general extension for everybody.
It would be a mistake though to leave members behind for lack of flying in 2021, if an airline believes past valuable customers are likely to be future valuable customers with the pandemic as the reason for the discontinuity.
Hotels are a bit of a different story though with status made so easy to earn this year, and Marriott even effectively extending most status for anyone who also has a personal and small business credit card. They went aggressive up front reducing qualification requirements, even to the extent they made mattress running for status attractive, rather than ‘holding the line’ with only slightly-reduced requirements like we’ve seen from airlines.