Airlines ramped up elite status qualifications over the last few years because they had too many elite travelers. But now, they need them more than ever, are they remorseful?
Airlines Ramped Up Elite Requirements
Over the last ten years, following massive airline consolidation, US carriers have completely changed their requirements for elite travelers. Top Tier levels were 75,000-100,000 miles flown per year or 100 segments allowed flyers into the upper echelon at Delta, United, and American Airlines.
Since then, the carriers added a revenue requirement to accompany the mileage/segment qualifiers starting at $10,000 annually, then $12,000 then $15,000 and this year, United pushed the bar even higher to a staggering $18,000 spent just on airfare excluding taxes and fees.
Coronavirus is Crushing the Carriers
American, United and Delta have all slashed their schedules to China, Hong Kong, Italy, with South Korea and Japan facing reduced schedules and in some cases complete route suspensions. Domestically, the carriers are also reducing schedules as demand has dried up. United has stated they will cut schedules by as much as 20%, other carriers are thought to do the same if not more.
The carriers are getting hammered on the stock market and I have no doubt that earnings reports will reflect this sharp decline in demand.
Will Carriers Adjust Their Requirements to Keep Customers
I don’t speak for all frequent flyers, but through thousands of comments, as the airlines have changed their requirements over the years, many have voiced that they feel discarded by the carriers. The same flyers that filled seats, put up with the delays, the mechanical issues, the reductions in service and reduced award seats with increased prices – the ones that carried the airlines through the bad years – were relegated to fewer and fewer benefits.
The airlines didn’t need them/us. The economy was excellent, it was (technically still is) the longest bull run in the modern era and carriers could throw more and more capacity while they continued to grow and profit (except you, American Airlines.)
But now they need elite travelers more than ever.
If the carriers don’t adjust requirements for elites, both for segment/mileage and spend, many travelers will lose their status. Status is the glue that keeps many elites at their preferred carrier because flyers don’t want to lose their benefits by starting over with a new airline. However, if elites were to lose their status or a good portion of it, flyers may decide to try out another airline.
The carriers can ill-afford to lose their most frequent flyers and status-related benefits cost them very little to extend. Gary Leff makes a great point that carriers would be foolish to extend status or curtail requirements early in the year because there’s then little incentive to spend with the carrier as opportunities arise during the year. As long as all the competition does the same.
However, Alaska is already bucking that trend by offering 50% elite-qualifying miles for travelers flying for the next month. It’s only a matter of time before others match or make adjustments. United released an email just yesterday that stated they would not make adjustments as of yet, are monitoring the situation but will extend flyers on a challenge currently. The others will crack soon.
I don’t find joy in the peril the airlines find themselves in now because of Coronavirus restrictions. Tens of thousands, if not hundreds of thousands, of employees are already facing reduced hours, hiring freezes and unpaid leave.
But the airlines were careless with those who were the most loyal to them. They didn’t care about losing faithful elites and took them for granted, will they appreciate them now that they are facing a challenging financial future?
What do you think? Will the carriers reduce requirements for 2020 qualifications? How should elites respond?