Airlines need to do more for elite members in 2021 to retain loyalty
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This has been a tough year for airlines and frequent travelers alike. Travel demand remains low compared to last year as coronavirus cases continue to peak in some parts of the world. Expecting the virus to be contained in 2020, airlines went into the pandemic with elite status extensions and lower qualification requirements. But as the virus continues to spread, most airlines have been remarkably silent.
We haven’t seen much in the way of elite status enhancements or added benefits — a stark contrast to what we’ve seen with credit cards. Premium cobrand and transferrable points credit cards have added enhanced benefits for members since the start of the pandemic, adding nontravel benefits and new bonus spending categories.
While I think it’s too late for airlines to make these enhancements this year, I think that airlines need to do more for elite members next year in order to keep their elites loyal. So in this article, I’ll discuss what airlines can do for elites in 2021 and why they need to do this to retain loyal customers.
Let’s get started.
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Why airlines need to enhance elite benefits in 2021
Airlines are in a tough spot this year, but they need to keep positive relationships with business and frequent flyers strong throughout the pandemic. Doing this is key to travelers returning to their old airline of choice after the pandemic.
Here’s a quick look at why this is and what could happen if airlines don’t do anything for elites. It may sound simple on paper, but it’s more complicated than you might think when looking at the issue through an industry-wide lens.
Elite status matches will be key next year
The number one reason airlines need to work for continued loyalty now is simple: there’s plenty of competition out there. As discussed in my article on why airlines shouldn’t devalue points and miles during coronavirus, the U.S. has a surprisingly competitive airline industry for one country. We have three mainline carriers and a handful of budget and smaller carriers like Alaska, JetBlue and Southwest.
Because of this, status matches, which let elite status members match their status to another carrier at the equivalent level, are popular in the industry. For example, a United Premier Gold member can status match to Delta Gold Medallion. Generally, temporary status is granted immediately with the option of extending status further by taking a set number of flights.
Once business travelers and other elites get back in the sky, these will be more tempting than ever — especially at airports that are hubs for multiple airlines. Afterall, after not flying for over a year, what’s to stop a New York-based American elite from trying Delta out of its JFK hub if there’s a status match on the table?
Airlines can have a bad reputation
U.S.-based airlines have always had a reputation problem. Flight delays, historically high fares and other PR mishaps have put airlines in a cutthroat competition for the best reputation.
It’s safe to say that airline reputations were already hurt by extended refund wait times for canceled flights at the start of the pandemic, so airlines will need to make progress on this before travel picks back up. It’s apparent that many airlines are working on this by removing change fees and otherwise making travel flexible, but they haven’t done much for elites.
Ignoring elites when working on reputation is a dangerous game for airlines. If airlines want their most valuable customers back, these customers will have to have a positive brand image in mind. This can only happen if elites feel like they were taken care of during the pandemic.
Further, elite members will need to feel like their airline of choice took as good of (or better) care of them as competing airlines. So if Delta launches a great promotion for elites and American doesn’t reciprocate, American elites may feel burned and be looking to make a switch.
Airline silence keeps elites wondering
As discussed in the intro, airlines have been remarkably silent on what coronavirus means for elite flyers. After the initial status extensions, nearly all airlines have gone silent on what the 2021 travel year will look like for elites. There’s no mention of further extensions, extra benefits or anything else of the like.
This silence is deafening. If travel doesn’t resume until the end of 2021, will once-loyal flyers lose their elite status? If not, what’s the point of planning future travel with said carrier if no benefits are awarded.
Elite status members are already losing exclusive benefits
As discussed, we’ve seen most U.S. airlines remove change fees on domestic flights. United started the trend in September, and the rest of the Big 3 (and Alaska) quickly followed suit. In the case of United, all flyers are able to change domestic flights and standby for free so long as they’re not flying in basic economy.
Same-day changes were once one of the biggest draws to earning elite status. For business travelers, having the ability to confirm or standby for an earlier flight home is a big deal if a meeting or conference ends early. Now that this benefit is offered to all flyers, it massively reduces the value of elite status for some. This is especially true for business travelers who can book paid first and business class and can’t benefit from other perks like upgrades.
This will need to be made up somehow, otherwise, we could see many elites become less loyal.
How airlines can enhance elite benefits
So, what should airlines do? Here’s a quick overview of what I’d like to see airlines do for elites next year. In each section, I’ll also give you my thoughts on how likely these are to happen.
Include extra upgrade certificates
An easy way to get elites to return to their airline of choice is pretty simple: upgrade them. Top-tier American, Alaska, Delta and United elites all get an allotment of confirmed upgrades every year. For example, American elites get Systemwide Upgrades while United elites get PlusPoints that can be used for upgrades.
Most 2020 elite status extensions didn’t include a new round of upgrade certificates, they simply extended existing certificates. I think this is a huge mistake on the airline’s side. After all, if demand continues to stay low in 2021, you’re not too likely to have full business class cabins on longer flights. In my mind, airlines should add more confirmed upgrades to frequent flyer accounts to give them the chance to grab the seats that would otherwise fly empty.
This makes elites feel appreciated and gets them back in the sky. Think about it: flying transcontinental is a lot more appealing when the traveler knows that they’ll fly in a luxurious cabin that has built-in social distancing in the form of a lie-flat seat. Plus, if the airline isn’t selling these seas anyway, why not upgrade and keep loyalty strong?
These could be given as a one-time bonus or earned after flying a set number of times. Obviously the former is preferred, but the case for the latter makes the airline’s message clear: keep flying with us and you’ll keep getting rewarded.
Regardless, I’d like to see members at least get the same number of certificates they’d earn by requalifying for status in a normal year.
Rollover 2020 elite qualifying miles and dollars
One of my favorite things about Delta’s response to the coronavirus is rolling over all Medallion Qualifying Miles (MQM) earned by flying or with a credit card to 2021. So if you earn 30,000 MQM this year, you’ll start 2021 with 30,000 in your account. This effectively gives frequent flyers 24 months to earn or upgrade their status tier.
I’m personally using this benefit to my advantage this year by working towards Medallion Platinum status. It’s getting me to spend on my Delta cobranded credit card and book my limited pandemic travel with Delta. This promotion encourages travel on the airliner and spending on the airline’s cobranded credit card.
I’d like to see other airlines follow Delta’s lead on this one. To some travelers, there’s no point in flying with a single airline in 2020 if the elite qualifying miles don’t carry over to next year — especially for would-be elites. Plus, just like giving elites more upgrade certificates, this policy makes elites feel valued regardless of how much they fly this year.
Even then, Delta’s response isn’t perfect. It’s rolling over MQMs, but not Medallion Qualifying Dollars (MQD). This is frustrating given you need to earn enough MQM and MQD to earn or upgrade your status tier.
Improve rental car and hotel partnerships
While many travelers aren’t flying right now, many are turning to social distancing-friendly road trips. On these trips, travelers need to book hotel rooms and — if they don’t own a car — a rental car. Coincidentally, most airlines have partnerships with both hotel groups and rental car companies. For example, United partners with Marriott and Hertz.
In United’s case, United elites get free status with Marriott and Hertz. This encourages United flyers to book hotel rooms and rental cars with these partners, and likely results in some form of revenue back to United. I believe that United should further capitalize on this by improving these partnerships through the pandemic with points-eaning opportunities and better elite status matches.
For example, United could give Premier 1K members Marriott Platinum status instead of Gold. Further, it could offer some sort of reciprocal points earning like American does with its Hyatt partnership. If a United flyer could earn United miles and Marriott Bonvoy points and have a premium hotel experience, they will feel appreciated and be more likely to book with a United partner.
Even if these benefits are temporary, I think they would make a huge impact on elite members’ perception of their airline of choice. If permanent, these benefits would make airline elite status more desirable for years to come.
Further extend elite status
Now that it’s October and the pandemic is showing no signs of slowing down, one thing is clear: business travel won’t make a full comeback in 2021. This will make elite status harder to earn for many elites next year, especially for those who travel internationally for work.
To me, this means that airlines must extend 2020 elite status through 2022 when we have a higher chance of business travel recovery. Otherwise, we will see many elites restart frequent travel without elite status, and be much more likely to switch to another airline.
Airlines should announce these extensions in early 2021 to ease the nerves of elites. Sure, it’s a small thing to worry about compared to other stressors of the world, but frequent flyers shouldn’t be left thinking about what happens to their elite status if they’re not back on the road until 2022.
In this article, I showed you why airlines must treat elites better during the pandemic and how they can do it. Elite members are an important source of income for airlines as they fly and spend the most. Airlines need to make them feel appreciated during the pandemic.
As the coronavirus continues to spread throughout the world, it will be interesting to see how airlines choose to reward once-frequent flyers until “normal” travel continues. I think we’re likely to see further elite status extensions happen first, with lucrative limited-time 2021 promotions following shortly after.
Feature photo by Alberto Riva/The Points Guy
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