Signs from United and Delta, combined with performance issues with American point to a possibility that elites are starting to leave American Airlines after the summer of discontent.
United Elite Increases Indicate Full Elite Participation
Before the announcements to United’s elite qualification this week, I had noticed that the carrier’s status challenges had closed up shop on status matches for the rest of 2019. As much as they may be interested in welcoming new elite business from other carriers as soon as January of 2020, they won’t be extending a status match before then.
I monitor the status match page as I sometimes guide colleagues and readers to challenges and status matches. In three years, I have never seen United stop taking applicants for elite status matches. I switched from American to United after 15 years of loyalty as a result of an unpublished challenge for 1K a couple of years ago and haven’t looked back since.
It’s clear that challenges have stopped due to the transition to the new, higher, elite requirements. However, the program’s changes also indicate that they aren’t afraid of pushing elites away. In fact, they likely have more elites in the program than they can satisfy and thusly have increased the levels to drop some out and drive more incremental revenue.
It’s without a doubt that other American loyalists (as I would) have moved to United and they don’t have to be as competitive with American as a result.
Delta Reports Unexpected Elevated Traffic
Delta had a number of suggestions for their Q3 unexpected uplift. The airline reported higher than anticipated demand, calling it “surprising” and escalating demand. There are some other reasons some analysts have highlighted, among them, lack of exposure to 737-MAX issues (they don’t own any) and limited impact from the rolling Dorian storm that impaired south Florida airport hubs.
CEO Bastian, in perhaps the biggest wink in the history of CEOs countering the exact message they choose to send, in a post about
Bastian said Delta’s success is due more to its own brand and operations, “not the weakness of any of our competitors.” – Boston Globe
He’s not wrong but the strength of their operations and quality of their product showcases the weakness of at least one competitor so on pretty much any front it’s a kind gesture to not poke Parker’s eyes out, but it’s not entirely honest.
American Shuffles Management Ahead of Q3 Reporting
I’ll have more analysis of this later today, but suffice it to say that American has shuffled their management team around and a change at the very top is still possible. American has had a difficult summer, mechanics labor negotiations have not gone well, causing performance issues and changes ahead of Q3 reporting indicates that things have worsened.
United has raised its qualification costs for 1Ks by 50% in the last two years alone to a staggering $18,000 from an already difficult $12,000 (excluding taxes and fees.) United can afford to risk losing some customers because they have inherited so many from American. Delta has cheekily indicated they have been inundated with new business as well. It seems rather obvious to me that American flyers are fleeing the carrier while they “go for greAAt” somewhere else.
What do you think? Do these statements (Delta) and actions (United and American) indicate that frequent flyers are leaving American Airlines? Do you think there is another explanation?