Airlines are about to downgrade the elite status of 25 million frequent flyers, according to Mark Ross-Smith of StatusMatch.com and former head of a oneworld frequent flyer program.
At the start of the pandemic loyalty programs extended elite status. Customers who earned their status in 2019 weren’t flying. Borders were closed, businesses weren’t sending people on the road. So programs largely had two reasons to let them keep their status.
- They weren’t getting to use the benefits they’d just earned, so letting them ‘use those benefits later’ was the right thing to do. Anything else would have bred resentment as well.
- They were likely going to be great customers again once the pandemic passed, so why reset their status and make them free agents? Keep them attached to the brand.
Remember “two weeks to flatten the curve?” Some programs took a wait and see approach to status extensions, they didn’t want to extend right away in case travel disruptions were brief. They wanted their elite programs to still work to incentive travel choices. But the pandemic dragged on, as was almost inevitable in hindsight. And loyalty programs generally extended status again so that the status held at the end of 2019 would still be valid thoughout 2022.
We’ve seen two years of status extensions. In some cases much more liberal status-earning criteria. American Airlines totally revamped how status is earned so that ‘most activity counts’ not just flying. Delta made award travel count towards status, following in Virgin Atlantic’s footsteps.
There’s been something of a travel renaissance and in some cases elite ranks have grown, not just from status extensions but from those re-earning status and new customers earning status for the first time.
However there are many former elites who aren’t on track to requalify for status.
- Some business travel has returned, but much of it has not.
- Take offices in New York City, which are still below 50% occupancy. Consultants aren’t doing their traditional Monday – Thursday fly out to client site weekly trips. When people aren’t in-office, it’s tough to visit people in their offices too.
Southwest is running a promotion where award travel segments count, and where paid travel dollars count double. That says they’re either behind in status numbers, or recognize a big customer cohort that may lose their status.
However what programs need to do is wait and offer win-back promotions. They should target customers who (1) used to be valuable but (2) haven’t re-earned their status, recognizing that 2022 started out without much travel as Omicron surged and that the business travel that used to drive value may not be back for some customers.
Some of these members may be hugely valuable again. Maybe they did regular business class trips to Asia and Asia is only just re-opening, or they were part of the consultant class and will do work from client sites again. Many of these members won’t be valuable to an airline again, either because their work has fundamentally changed or because they’ve become more senior and their current and future roles won’t require it.
But giving up on these members seems like a mistake – it makes sense to look at the cost of servicing an incremental elite member and apply some bet as to the future value of that member. Then figure out what kind of activity might signify continued engagement, interest, and potential future value. Encourage members to keep their status with modest activity – flights, a co-pay, or miles redemption.
Walking away from what could be “approximately 15% of total global travel spending” that these customers represent would seem to be a mistake.
I don’t buy Ross-Smith’s numbers. Focusing on the case of Delta, rollover has created so many *brand new* or *upgraded* elites at the Silver, Gold and Platinum level. There may be some attrition at Diamond, but there are also new Diamond members too. The big fall off, if it occurs at all, will be the Diamond level. From what I can tell, UA has allowed some promotions for some people to retain status, while AA has debuted totally new way to gain status. Hotels may be different, but now Hilton and Marriott allow people to buy status via credit card.
While business travel is down (15-20% depending on who you ask in volume), air traffic is only down 5%, and upgrade lists are longer than ever in many cases. People are traveling, even if the composition is different
EDIT – I meant to say the big fall of in Delta Diamond will have in *2024* if it happens, not next year…
Bottom line, there are too many people traveling today for these elite fall-off numbers to make sense
Gary, with all due respect I have to disagree. In my option, airlines like American have made it easier than ever to earn status. If a business traveler isn’t regaining status then they can simply start from scratch just like everyone else. To be honest, I don’t think business travel will ever come back. I work for one of the large health insurance companies and the pandemic proved that meetings that were previously in person can be just as effective as held remotely. Leadership has seen the cost savings and travel budgets have already been slashes across the board. If status keeps getting extended for people who used to travel, it becomes extremely unfair for those if us who travel for leisure and are actively engaged in frequent flyer programs.
I wonder what he bases his estimate on.
Could be a nice opportunity for statusmatch.com . Hopefully , they will have more “live” matches soon . Most of their matches are listed as “waitlist” .
Gary, you may be missing an element. Airfares are much higher now than when the elite status levels were established. Since spend is now the bedrock for qualifying and spend per seat mile, to me at least, is at an all-time high, I suspect more people will hit status even flying less than they used to.
I hit Diamond re-qualification in June. I’ve never hit it before October or November before and we’re talking 10+ years at highest level. I’m doing roughly same domestic travel as pre-pandemic. They may RAISE the levels.
What a poorly thought through article. It has never been easier to earn elite status. If you haven’t earned it this year, then you are not an elite flyer so why kid yourself.
‘Playing Devils Advocate here. What about those of us who earned 1K the hard way? Will we be fighting with the “easy matches” for upgrades, etc? Seems unfair.
My business travel has not resumed but I expect it to in 2024. Maybe a little in 2023.
I expect to be cattle level elite. When that happens, I will be a free agent. I will have zero loyalty. Offering elite status may bring loyalty. It’s up to the airlines what they want to do. I have enough miles in all the major airlines to redeem some awards but I do have more in the airlines where I’m elite or used to be.
It would be nice if I got a “get out of jail free card” which would be an option to resume elite status anytime in 2023-2026. I wouldn’t use it in 2023 because of the uncertainty whether I could maintain elite status.
@Brian makes a great point about spend. I agree. Airlines will likely boost the spend threshold by 15 to 20%
New job, no more business travel. My silver Delta and Silver Hilton go away in January. I already became a free agent. Hub-ing from ATL, I never got upgraded anyway. I loved checking a bag for free as a silver, but will go back to gate checking it for free. Many times The price swing between the less expensive free agent ticket has been enough to cover a nice dinner or a hotel room.
Less flyers being driven by status
More flyers being driven by one thing. Best price
Airlines that don’t offer best prices best extend status
My clients simply don’t want vendors traipsing around through their offices anymore – I’ve had a single request for on site work since the pandemic started, when I’d been on the road 3 out of every 4 weeks before the pandemic.
My Hyatt Globalist status will be lapsing at the end of this year, although I actually did enough leisure travel on Delta to legitimately earn Platinum there.
Any corporate drone who flies to do their bossman’s bidding twice a year is elite nowadays.
Time to say goodbye to all those freeloader OPM flyers.
A lot of different dynamics for travel companies. The result of mergers over the years, we had four main offices across the country when the pandemic hit. With the successful transition to remote work, we’ve closed two of those offices. Departments located across separate offices typically used to get together once a year in person. Now that our rent expense has been slashed, we can redirect some of those funds to departments/divisions meeting two or three times a year to maintain company culture.
@Anthony – can you provide some cites to these biz travel numbers? Not doubting at all; it sounds about right to me, but I feel like I keep seeing a far broader range than that. Appreciate any pointers you might have.
“While business travel is down (15-20% depending on who you ask in volume), air traffic is only down 5%, and upgrade lists are longer than ever in many cases. People are traveling, even if the composition is different”
I have been on exactly (1) business trip (Aug ’21) since the pandemic hit. I do have (2) coming up in Oct. and Nov. My pre-pandemic trip #’s were between 8-10.
I have re-qualified my status for 2023 by taking a lot of personal trips and by spend on the Reserve Card.
However, without some increase in biz travel…that’s not sustainable. My strategy for the rest of this year is to fall just short of the MQM’s needed for the next level so I get them to rollover for next year.
I’m pretty old, but have lifetime membership of Lufthansa Senator, Hilton Diamond, and Bonvoy Titanium. This year I’ve exceeded HH requirements to re qualify and so far done 3/4 LH, but BA has just dropped me from Silver to Blue, now I have little incentive to use BA if as a senior (69) I’ll have to queue with the masses. Air France has also dropped me back to base but I don’t need them. Star Alliance is my go-to airline from now on.
After 9yrs of Executive Platinum, when American kicked me to the curb with not even a downgrade to PLT or PLTP I quit them after pleading with reason for lifetime value and future value. Yeah they don’t care. Used the rest of my 1M+ miles (I have 187 left) and quit their co-branded credit card with Admirals Club access (collateral damage for the issuing bank sadly). I still have my million miler status but as far as I am concerned American and their inept leadership can go pound sand.
All the 2019 1Ks mean that UA’s SFO flights are a quarter pre-board, and Group 1 is where carryon space gets tight. They should have done soft landings (inactive 1K gifted Plat) instead of status extensions to ease the glut
If you want to fly business/first, just pay for it. Easy-Peary.
The other thing to remember is that elite status is far less valuable than it was in the past. Upgrades, bonus miles earned etc is far less than in 2015 say. So a top 1k or executive Platinum has about the same total benefits as a 50k flyer did back in 2015.
I agree it’s smart to have status matches and incentives as it costs little and does increase revenue by encouraging customers to be loyal.
Generally speaking the legacy carriers will price their flights the exact same on a route they all fly to, and have similar schedules. For the price-conscious customer, the leisure traveller, or even the non-traditional businessman, there is little choice, unless you really care about the type of plane flown on the route, or the company’s brand.
This is where airline status comes in, making all the difference. I believe this COVID-era practice of offering status, or some contributing factor to status, however insignificant should continue.
That’s just my two cents, but I don’t have all the inside numbers
@ Gary — Just buy cheapest F and enjoy. Status is simply a discount mechanism or a trap, depending on how you play it.
If the airlines/hotels DO extend again or do some kind of offer, I’m going to be quite livid. I traveled for work during the pandemic and afterwards and re-earned Bonvoy Titanium the hard way and even went up from Plat Pro on AA to Executive Platinum. The upgrade lists are longer than ever, I never get a room upgrade much less and seat upgrade. They have to let it dip for a year or two to have the loyal members STAY LOYAL.
I earned Platinum in 2020, Diamond in 2021 and this year also. Did 154 segments in 2021. I fly almost every week. Those that don’t requalify will need to start over again. Those of us that are flying now should not be overlooked
::shrug:: plenty of people have status already no need to dump a bunch more elites into the pool. Reward the people who are actually flying now. Maybe give a status challenge to people who earned status in 2019 but if they aren’t flying at this point I wouldn’t be screwing over current elites trying to reward people who may never be flying again in a meaningful way.
Status means very little these days, at least in terms of upgrade.
Last DL flight I was on, the upgrade list was basically half the plane. Only a Diamond member stood a chance. I just enjoyed my free exit row seats.
Regarding UA, I did fly upfront but thought the experience was below par. No seatback entertainment and a broken streaming service. So, why would I even want to be upgraded on UA, or fly with them at all?
AA was nice, because I got upgrade to a TCON flatbed. However, I could also just have bought it as the extra dollar amount wasn’t too bad.
Main reason for my chasing a status is irrops.
During normops, they still treat you like sheet and you ever get upgraded anyway.
I like that they put me near the top of standby list when weather, tech, mech or “shrug” snafu happens. And that happens a lot these days.
After numerous years of traveling with Delta who treated me very well until the day I tried to change a flight from Tokyo to the USA and was told it’s $650.00 to change to an earlier flight, the reservation agent apologized saying there was plenty of open seats but the new bosses told them (Take no prisoners) that meant there top flyers, after gaining over 3 million miles with Delta I said goodbye and used up all my FF miles and have never flown them since, AA matched my status and have since managed 2 million miles on AA, AA treat you okay, but again the impact on their merger with US Air was a disaster for Elite members, but AA is convenient and goes direct where I need to go. All FF programs have been deminished over the last 10 yrs and the airlines don’t value you so much, you are just a number now not a name to most of them.
Timely article Gary. I have been 1K with UA and Gold with Delta for several years. But probably will only make Gold with UA next year. Stings but can’t justify personal spend with business travel down to nil for me.
To PM1, it’s good to see someone looking at this somewhat realistically. If you don’t fly enough to qualify for “Status” then you don’t deserve to have status. Those of us that got extension after extension, it’s time to put up or shut up. Fly, book hotels etc, or you don’t deserve status. Stop crying about it.
UA already has too many elites at its hubs. The better course would be a soft landing or maybe a Q1 challenge.
From what I see at my company and elsewhere, both domestic and international biz travel has already returned with a vengeance – except for Asia. And that seems pretty clear to be coming back by Jan 1, with the exception of China.
The composition of elite membership has been disrupted from corporate to leisure; however, flights are generally full so the airlines have little incentive to subsidize an era that may never return. I’m a new AA EP this year for the first time after lingering at the lower levels for years on AA and UA so I actually like this change. People who no longer meet the requirements for status deserve to lose their status otherwise we’re pretending these people are more entitled than the non-status people.
I read some of the comments and wow; it is a hodgepodge of mix emotions.
I think giving status without the pain of flying/staying is a problem and always have; I earned my striped through sweat and tears. While flying is spotty, it is not back to levels seen and the cost of flying is remarkably low by comparison of everything else to its 20 or 30 year prices. No one seems bothered by that though, which is surprising.
Like everything else, people want stuff free and easy so companies water down their perks. I was Platinum with Marriott long before the merger and they watered down Lifetime, I am not sure why, for the Millenniums? Well, when they have enough money to pay what the rest of us pay, then you should grant them status, otherwise they should get it like the rest of us, by doing the work and earning it.
I hope the airlines do rollback status requirements to pre-pandemic levels. I was one of the few that
continuously flew thru the pandemic and up until this year didn’t mind the reduced levels though I didn’t need them. And note 95% of my travel is domestic, so that’s allot of flying. This year has been a joke, as a dedicated 30 year devoted United revenue generating customer I have seen upgrades not go to 100K fliers but to people that upgrade cheaply or credit card customers so they need to rollback those areas as well. Prior to the pandemic 75% of people that were complimentary upgraded were 1K and higher, now that is completely reversed. Airlines need to look at their dedicated base of customers, ones that actually fly and not the other BS options and make sure they don’t alienate them as they are the true revenue generators.
I have been an AA elite member for a quarter century. At the beginning of COVID, AA extended all members for another year, it was the right thing to do, plus every airline was doing so. Then the next year came and AA did not extend. The only members that were extended for the second year by AA were the Executive Platinum’s. I was a Platinum Pro and after multiple emails from me, requesting an extension, they all were responded to with “…AA is not extending AAdvantage statuses at this time…”
One can say people were back to traveling and the airlines were only down this % or that % but that’s just a flat spin of the truth. in 2021 business people were still, mostly, not traveling yet. We started traveling in mid 2022, approximately. There is no way to make up a years worth of traveling in 6 to 8 months in this climate. So, after a quarter century of brand loyalty, AA answer was to downgrade everyone, roll out a new program and have everyone requalify, when they can, except Executive Platinum’s. Amazing how some airlines only have 1 way loyalty