It’s Time For Airlines To Award Elite Status Based On Non-Flight Activity

Earning and burning a million Qantas points a year could soon come with first class lounge access and other perks. Already Qantas rewards status-like benefits for activity other than flying.

Possible benefits of the new non-flying Qantas status include business lounge membership; four invites per year to first class lounges; status credit rollover; Qantas experiences and more.

Already Qantas awards status at 150,000 points and 350,000 points in a year. A new level could come at 800,000 or 900,000 miles of earning, or 1 million miles of earn and burn “as long as you tick off at least four channels for earning points and three channels for spending points (the latter includes Qantas flights, hotels, wine, insurance, car hire and the points-based Qantas Rewards Store).”


Qantas First Class Lounge Sydney

The new Air Canada program lets you earn elite status without ever flying, by engaging in points-earning with their partners. It’s expected that this program will expand, allowing members to earn higher levels of status through non-flight activity, or on a promotional basis counting earn like credit card initial bonuses towards the required thresholds for non-flight status earning.

Worldwide there’s a recognition that an airline’s best customers aren’t just those who spend a lot on airline tickets. Mileage programs are engines of profitability for large carriers, underlined with a huge exclamation point by United, Delta, and American each mortgaging their programs for between $6.5 billion and $9 billion with room to borrow more.

Arguably frequent flyer programs are the only thing that kept American and United out of bankruptcy and in normal times American was losing money flying and earning all of its profits selling miles.

It’s a long time in coming recognizing the value of an airline’s best non-flying customers. In fact in recent years U.S. airlines have reduced the value of their credit cards for earning elite status. United’s new revenue-based status program limited the contribution of its credit cards to 1000 qualifying dollars. American reduced how many qualifying dollars could be earned via spend on its Barclays co-brand cards. Delta massively increased the spend requirement to buy out of the qualifying dollars requirement for top tier elite status.

Yet for 2021 American decided to waive the qualifying dollars requirement for earning status up to Platinum Pro with $30,000 in cobrand card spend (in addition to lowering the qualifying dollars requirement for all status levels).

American, run by legacy US Airways top leaders, should be well familiar with the idea of granting status based on partner activity. In the last quarter of 2006 US Airways ran an ‘everything counts’ promotion where earning miles with partners counted towards status. That raised cash for the airline, without the need to provide immediate transportation in return.

The margin on things other than airline tickets is generally much higher than that of air transportation. Selling miles is a high margin business. Selling preferred seats is too. A customer with a co-brand credit card who uses it on the airline’s shopping portal and buys upgrades is a high margin customer, and a customer worth fighting over – and treating well.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Comments

  1. Gary, you are correct. Airlines should do this, now more than ever. When it comes to loyalty, everything should count.

  2. First order of business give all BIPOC lifetime top status and guaranteed upgrades. It’s time the F cabin looks like America.

  3. Granted there’s a noteworthy opportunity cost, but the AmEx Delta Platinum Skymiles and AmEx Delta Reserve cards has some pretty significant ability to rack up MQMs via spend. I’m looking at more than 25K bonus MQMs this year despite not getting on a plane in all of 2020 and I’m not a big card spender compared to most folks here.

  4. I agree with you, Gary. Naturally, that means airlines will do the opposite and Delta will lead the way.

  5. Agreed, though I would also add that they should follow Virgin Atlantic’s lead and count flights booked with miles towards status.

  6. I’m curious to see how SWA will handle people that earned the companion pass for 2020-2021. 2020 was nearly a total loss, and at least a few months of 2021 will be the same, if not more. I suspect they’ll extend through June 2022 or even the full year, but this is one where something needs to be done.

  7. Airlines should count miles redemption flying the same as paid flying for status accrual. The airline was paid in advance for most of the miles and points redeemed, and the airline recognizes that revenue on its income sheet when you fly. Why make a distinction for earning status? .

  8. I certainly wouldn’t mind this to become the case, but I would think that the rate of diminishing returns for elite benefits would make this impractical if it were too widely adopted. There are only so many preferred seats available, only so many people can board first (e.g., if everyone boards first, then there’s no such thing except for the first in line), access to lounges for more people dilutes the benefit (leading to tragedy of the commons issues, more noise, etc.), and so on. It just seems to me that there are probably more sustainable ways to reward non-flying activity.

  9. Great idea. Balance it off with awarding elite miles/points to the entity that actually pays for the ticket.

    All the OPM suckers will be sad tho.

  10. Hotel program were awarding qualification nights and stays for awards. It would be fine for airlines to do the same – award qualifying segments and qualification miles for the award travel. Of course, doing that should also eliminate EQD as a requirement. Similar to hotels, a program could have EQD as one of the ways to qualify. For example, one would be able to qualify for a particular tier by:
    1) Number of segments (regardless whether paid or award)
    2) Number of miles (regardless whether paid or award)
    3) EQD
    4) Keep the very top tier (like CK with AA) qualification coupled to a known EQD in addition to the minimum miles flown.

  11. They should extend status for one more year and allow for an upgrade of membership level for a charge. Im sure they would make money….

Leave a Reply

Your email address will not be published.