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Airline elite status - does it still have any value left?
When I started my frequent flying back in 1998, obtaining elite status on an airline was not really high on my list of achievements. Then, when I started to pay attention to the people around me, I realized I was wrong. Back then, elite status on an airline was the one thing that helped make flying even more enjoyable.
Forget good food or a snack at the airport - getting preferential treatment when things go wrong, or the occasional free upgrade makes a real difference. After about a year of heavy flying, I had reached top tier status on three airlines, and was on my way to a fourth.
Nowadays things are different. Elite status is not just a luxury that can make your trip a little more bearable, it's what you need if you don't like paying for checked bags, or if you don't like spending an hour in the security line.
In recent years, the value of frequent flier status has plummeted -
- Certain elite perks are now being sold at check-in or as a paid membership
- Elite level bonus promotions are making it much easier to become a top tier member
- Additional levels are being introduced, lowering the value of the current top tier
- Credit card promotions are making it possible to be top tier without ever flying
- Status matching is more popular than ever
Certain elite perks are now being sold at check-in or as a paid membership
In the past, perks like preferred seating, priority boarding and special security lines were reserved for passengers with airline status or those that were booked in a premium cabin. Nowadays, airlines are moving towards the à la carte system, selling many of those perks to non-elite members.
A good example of this is something I took advantage of on a recent flight - I was stuck in coach, and had a very bad boarding group assignment. When I checked in at the airline kiosk, I was offered an upgrade to first class for just $50. This means I was able to take advantage of priority boarding, get a decent meal and fly in comfort for just $50 more.
To me, this is a win-win; I get a better seat, and the airline makes $50 it normally would not have earned. To the people up front that paid full price for their seat, it would appear unfair, and it means there is one seat less for elite passengers hoping for an upgrade. On some airlines, the upgrade systems prefer to sell the seat to anyone willing to pay for it before giving it away for free to elites.
Elite level bonus promotions are making it much easier to become a top tier member
When you chat with frequent fliers, you'll often get a feeling for their sense of entitlement - many of them will also mention how they reached their elite status. Terms like "I made it the hard way" are thrown around to make it clear they reached the top tier by actually flying a lot.
Take for example the newest promotion by US Airways - their reduced qualification levels mean you can be "elite" after just a couple of flights. More elite members = more people fighting for perks. We could be sitting next to each other on a flight and have the same status, but only one of us had to actually fly all year to earn that status.
Additional levels are being introduced, lowering the value of the current top tier
On United Airlines, the top tier in their mileage plus program was always "1K". 1K passengers flew 100,000 miles or 100 segments. Once they reached this, the airline would hand over a bunch of nice perks. Then, back in 2003, the airline started a non-published level called "United Global Services". The program is not part of their Mileage Plus program, and is offered on an invitation only basis.
The reason behind this was simple - too many people were making the 1K level without actually spending as much as the airline wanted. Clever travelers could become 1K with just a few thousand dollars in tickets - which is lower than the price of a single business class international ticket.
With the 1K level came an envelope containing several upgrade vouchers (these are now electronic), and smart travelers could convert those into thousands of dollars in premium cabin trips, far exceeding the value of the tickets they purchase to make 1K. On frequent flier chat boards, it became a sport to make 1K for as little as possible.
The new "UGS" level aimed to reward those passengers that actually spent a lot of their money with United Airlines.
The UGS level didn't have any of the documented perks of 1K, but it is obvious that UGS members get preferential treatment. What this meant to 1K members is that they were suddenly no longer at the top of the pecking order. If someone was eligible for an upgrade, they airline would pick the UGS member first.
Credit card promotions are making it possible to get closer to top tier without ever flying
Very few cards actually offer "EQM's" (elite qualifying miles), but there are a couple of them that give a decent EQM bonus upon reaching certain spending levels.
Granted, you won't become top tier with the average household spending pattern on a credit card, but heavy business spending can often contribute as much as 25% or more towards elite level qualification.
Status matching is more popular than ever
A status match is what you can do if you are currently flying airline A, but wouldn't mind switching to airline B, without losing your elite status. The game of status matching means you really only need to earn status the hard way once - and after that, smart people can continue holding on to elite status on multiple airlines for several years.
What this means to elite passengers, is that in every line of elites, there could be several people who are "just as elite", but have never actually flown the airline.
This is all fine and dandy if there is a decent balance (ie. the same number of people defecting to from Airline A airline B as those moving from B to A). In the real world, this doesn't always work - and when the quality on one airline begins to decline, an unfair number of new elite members might flock to a new airline. Obviously, the more elite passengers an airline has, the more people will need to share the perks. On a busy Friday afternoon at the airport, this could mean longer queues at the elite security lines than at the "commoners line".
Free status
On some airlines, top tier members will be allowed to nominate friends and family for certain levels in the frequent flier program. These levels are usually "entry level", but in some cases it means the difference between a bad seat and a good seat, or $300 in luggage fees or free luggage. If you know someone with elite status, ask them if they have any nominations available.
The bottom line
The bottom line is simple (as far as I am concerned) - elite status is not as valuable as it used to be. Don't get me wrong though - being a top tier member on a decent airline is still very valuable, but I'm convinced that the lower tiers are the ones that suffer the most - they are the ones that have to share the few remaining perks with a lot of newcomers.
This really only applies to US domestic airlines, as international carriers have managed to keep the most important parts of their programs protected from too much devaluation. Though, even those carriers have removed quite a few of their perks.
Reader Comments (Page 1 of 1)
Jmoney Oct 19th 2009 3:33PM
how exactly do you do status matching?
Scott Carmichael Oct 19th 2009 3:38PM
Good question - the easiest way is to contact the airline you want to match with. In most cases, they'll ask you to mail or fax in your current elite card. Others may "challenge" you. I'll write a separate article on matching later this week.
Josh Oct 19th 2009 8:10PM
The best place to learn about status matching is at FlyerTalk, specifically the "master" discussion thread and status matches. You can find it here:
http://www.flyertalk.com/forum/milesbuzz/9558-status-match-master-thread.html
Scott is actually very incorrect. Most airlines need a lot more than a copy of your current elite card. They'll want actual proof that you fly a bit (usually a copy of your mileage statement with your current airline).
He's also wrong that "Status matching is more popular than ever." I'm not sure that he has any idea how popular status matching is in comparison to year's past. Certainly, anecdotal evidence suggests that more people matched to Northwest last year because they were generous with status matching, and people knew that getting status on Northwest would eventually equate to status on Delta, which is a little stingier. But other airlines (AA, USAir, United) got stingier with status matches in the past few years, preferring to force travelers into challenges instead.
Furthermore, status matching isn't that easy, and is often not so worthwhile. Scott says, "The game of status matching means you really only need to earn status the hard way once - and after that, smart people can continue holding on to elite status on multiple airlines for several years."
This is blatantly misinformative. First of all, matching status with an airline only works as a one-time thing. I'm an elite with AA. I can certainly status match to Northwest or Alaska, but I won't keep the status with those airlines unless I actually fly on them. And I can't just keep status matching... Almost every airline will only approve a status match once. So yes... status matching can get you fast tracked to mid-tier status on many airlines (very very few match to top-tier), but it will only do you much good for a year. Then you have to re-earn status the hard way.
Scott Carmichael Oct 19th 2009 8:18PM
Josh, I'm quite aware of the Flyertalk thread. I helped add stuff to it in its first version, six years ago.
My initial reply here was by no means a complete guide, which is why I said I'd post more about it in a later post. As for having no idea how popular it is, I'm not entirely sure where you got that idea, but the concept of matching is indeed more popular than it used to be - simply because more people know that it is possible.
As for matching not being easy or worthwhile, now I need to question you on this. I know from experience that status matching has been, and still is very profitable on some airlines. On some it is a pain in the backside, and with others it is just a single email or fax away. United for example, still matched PremEx, which is worth about $600 based on free luggage allowance and E+ alone.
As for keeping status for years being "blatantly misinformative", I know someone who is on his seventh year of elite status, all based off a single year of real elite level status. It really isn't hard to match away from one airline and match back into them. Tricks like having an international address are not exactly reserved for the smartest people.
Josh Oct 19th 2009 9:24PM
Scott says, "As for having no idea how popular it is, I'm not entirely sure where you got that idea, but the concept of matching is indeed more popular than it used to be - simply because more people know that it is possible."
Status matching may be more popular (though I have no way of knowing if it is), but less people are flying, which means there are fewer elites. And how can you possibly make a definitive statement about the popularity of status matching? Do you have access to internal documents at UA or AA or DL? Do you have any remote idea how many members are in each program, or how many are in each tier? You're making assumptions based on assumptions, and they don't necessarily add up, especially when you portray those assumptions as facts.
"I know someone who is on his seventh year of elite status, all based off a single year of real elite level status. It really isn't hard to match away from one airline and match back into them. Tricks like having an international address are not exactly reserved for the smartest people."
I'll repeat: Airline rules say that status matches are one-time-only one-year-only privileges offered to elites from other airlines. Sure there are tricks. But are there so many people utilizing elaborate status matching schemes (including constant international address changes) so as to break the airlines' rules and seriously devalue the elite program?
Josh Oct 19th 2009 8:17PM
Scott writes, "On some airlines, the upgrade systems prefer to sell the seat to anyone willing to pay for it before giving it away for free to elites."
Are you kidding? Name one airline that sells inexpensive upgrades to non-elites before upgrading elite passengers.
cc Oct 21st 2009 11:00PM
Josh - Scott is absolutely correct. It happened to me TWICE on an international flight (SFO to Narita).
Showed up at the airport early and asked to pay for it. ~$500 for an upgrade to business. Same thing on the return.
No elite status with the airline.
Josh Oct 22nd 2009 11:33AM
1. Yes, they offered to sell you an upgrade. But did they do so _before_ processing elite upgrades? I'd venture to say that you were probably offered that $500 upgrade after all elite upgrades had cleared.
2. I have heard reports that in the case of transpac and transatl flights, airlines occasionally hold inventory in order to offer paid upgrades at check in. They have a right to make money, after all, and if they can find someone to pay $800, that does a lot more for their bottom line (800 dollars more, to be exact) than the free upgrade to the elite. Furthermore, I've never heard of this happening on domestic flights. Airlines may offer inexpensive ($50 for a short hop, a few hundred dollars for a transcon) upgrades at check in to non elites, but they vritually NEVER do so before clearing elites. (That's because elite upgrades clear as many as 100 hours earlier... by the time the non-elite is offered that upgrade at the gate, the elites already have first class boarding passes.)
Again... Scott is right that airlines offer paid upgrades to non-elites. But elites almost always have access to those upgrades before non-elites.
3. Scott is absolutely bonkers to recommend to people that non-elites can routinely get upgrades at check-in. If you're someone who flies a lot and you want to be occasionally (or frequently!) upgraded, get yourself elite status.