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There are just two weeks left in 2013, which means that elite status is much on everyone’s mind – and I know more than a few people who are off on mad last-minute dashes to requalify. Historically I’ve defended the concept of mileage runs because they might make monetary sense if the perks you’d get by hitting the next elite level highly outweigh the cost (time and money) of doing the actual run. But as elite travelers (or those that desperately want to be) scramble and potentially shell out a ton of money, I think it is important to understand that elite status perks have been eroding over the years, especially for lower and mid tiers.
This isn’t a doomsday post, but one to help people who may be new to loyalty or trying to decide whether it makes sense, to think about the direction elite status is headed. Thanks to several factors including new revenue requirements, credit card benefits packages and other decisions by the airlines means that elite status no longer holds nearly the same value as it once did and that rather than being airline loyalty programs, frequent flyer programs have turned into frequent buyer programs and that more than ever, you will need to shell out a ton of money for these perks.
While there are still some benefits including enhanced customer service and priority when it comes not only to check-in, boarding and handling emergencies or travel plan changes why spend thousands of dollars each year on airline tickets to maybe have a chance at an upgrade when you can just purchase a business or first class seat, or use credit card bonuses to book those seats as awards?
Clearly top- and upper-tier elite status still has a lot of benefits, but as they become more diluted and more expensive to achieve and maintain, the question becomes more than ever: is it worth it? Do the math for yourself before you get caught on the elite status hamster wheel.
In the meantime, here are the top five negative changes to elite status as I see it, and feel free to add your own thoughts in the comments.
1. The Shift Towards Revenue requirements = Slow Death of the Mileage Run. While earning points and status in some airline programs like Southwest Rapid Rewards and Virgin America Elevate have always based on how much money you spent, both Delta and United have added a revenue requirement to earning elite status that comes into effect in 2014. Now, just to achieve basic bottom-tier status – Silver Medallion on Delta and Premier Silver on United – you have to spend $2,500 within a calendar year on airline tickets. To get top-tier Diamond status on Delta, you need to spend a whopping $12,500, while Premier 1K on United will cost you $10,000 in airfares. Either that, or you need to spend $25,000 in a calendar year on a co-branded credit card for both airlines.
2. More perks are being given as part of credit card benefits. One of the reasons elite status benefits are being diluted is because many airline co-branded credit cards offer benefits that mirror those given to elite flyers. The Gold Delta Amex, for instance, gives you boarding and free checked bags, as does the United Explorer card, the Citi Platinum Select AAdvantage Visa Signature and Mastercard, and more. So more and more people are crowding those gates and boarding early and using checked baggage services, all of which diverts resources away from servicing and saving time for elite flyers – and it also changes the value equation since why bother flying even 25,000 miles when you can get very similar benefits and a significant mileage bonus just by having a co-branded credit card?
3. Upgrades are rarer and being up-sold. Probably one of the sorest points for elite flyers is the fact that the three big legacy carriers – American, Delta and United – have all taken recent moves that affect their elite upgrades. American has introduced a trial PlusGrade upgrade program where flyers can bid on upgrades to business or first class (whichever is the next-higher class of service). The airline has begin testing it on specific routes so far (you have to check whether it’s available for your flight), then starting 6 days before a flight, non-elites can make an upgrade offer and the airline will notify them prior to check in (so more than 24 hours in advance) if their offer is accepted. The airline says that these upgrades are processed after elite ones, but there’s no way to tell. For their part, Delta and United have been aggressively selling upgrades to business and first, which has been a major bone of contention for elites who expect complimentary upgrades and have seen their own upgrade chances diminish while the airlines sell seats they think should be theirs to any flyer willing to pay more for it. Not only that, but Delta has also just revamped its elite upgrade benefit so complimentary upgrades for the transcontinental BusinessElite routes (currently assigned at the gate based on availability) will no longer be a benefit. Instead, Diamond Medallions can select to upgrade those routes (and other international routes) using Global upgrades or miles. That changes the value calculation for Diamond status since Delta is making even these uber-top-tier flyers pay a premium for upgrades on busy routes.
4. Less about flying and more about buying. As I wrote about yesterday, it’s now easier to earn elite-qualifying miles via credit cards than ever, and even the major carriers have put out programs and promos where flyers can buy elite miles this year – that means rather than spending time on the airline and more money on tickets, you can earn the same elite miles by making your everyday (and not-so-everyday larger purchases). For example, the Citi Executive AAdvantage MasterCard gives cardholders 10,000 elite qualifying miles when they reach $40,000 in purchases each calendar year. The Delta Reserve card, which awards cardholders with 10,000 Medallion Qualifying Miles with the first purchase, and 15,000 more MQMs if a member hits $30,000 in spend within the calendar year and an additional 15,000 MQMs with $60,000 calendar year spend; and the Delta Platinum Amex offers 10,000 MQMs for $25,000 in annual spend, and another 10,000 MQMs for $50,000 in annual spending, for a total potential of 20,000 MQMs. Not only that, but now through December 31, 2013, Delta is selling Medallion Qualifying Miles. You may buy between 2,500-10,000 Medallion Qualification Miles (MQMs) that will post to your 2013 MQM balance and apply toward 2014 Medallion status. For its part, American has introduced a new set of options for elites having a hard time requalifying where they can pay to boost up to their current elite level if they’re just a little bit short, or to renew their status altogether if they’re far short of requalifying – which means that many flyers who would have lost status altogether can now keep those elite ranks bloated and dilute benefits that would have gone to actual frequent flyers in the past.
5. Fewer opportunities to earn with partners. While earning elite miles through credit card spend is more common today, earning them while actually flying airline partners is harder. This is mainly another Delta issue since earlier this year This is another Delta issue since it hacked away at partner earning rates. Some airlines (including Korean, a full member of SkyTeam) no longer count at all. Not only that, but neither Delta nor United count flights ticketed by their partners toward their new elite revenue requirements, and many foreign carriers do not award elite miles (or only a fraction of flown miles) on partner flights depending on what fare class you purchase, so before you buy tickets, you have to look into some rather arcane earning charts. One noticeable exception to this trend is Alaska, which just announced elite mileage earning on all its airline partner flights.
Do you feel that elite status is changing? And if so, do you feel like it is for better or worse?
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