Elite Status on Airlines Loses Some of Its Appeal

But as carriers have begun selling these services to anyone willing to pay a fee, or offering them to customers who carry an airline-branded credit card, the status is losing some of its appeal — at least for frequent fliers on the lower end of the elite spectrum.

“I’ve definitely noticed an erosion in benefits since I became elite,” said Bill Wilkes, a Delta SkyMiles Gold member, the second-lowest rank in Delta’s four tiers of elites. “Pretty much anyone who gets approved for a SkyMiles credit card can get priority boarding and a free checked bag.”

Mr. Wilkes, who works for a Major League Baseball team, noticed on a recent Delta flight from Baltimore to Sarasota, Fla., that more than half the passengers lined up when priority boarding was announced.

He estimates that he gets a complimentary upgrade — arguably the most important benefit of elite status — on only 15 to 20 percent of his domestic flights, compared with 40 to 50 percent several years ago.

That shift can be attributed partly to the growing ranks of elites on any one airline, because of mergers like Delta’s with Northwest, as well as more ways to earn elite status through credit card spending, not just flying.

Program rules vary by airline, but travelers typically have to accumulate 25,000 miles in a year to become a bottom-tier elite, 50,000 miles for the middle tier and 75,000 to 125,000 miles for the top tiers. Most people have to requalify each year, and miles earned from credit card spending increasingly count toward the minimum required.

For instance, customers approved for Delta’s Reserve card from American Express can earn 10,000 elite qualifying miles after their first purchase. (There is a $450 annual fee.)

US Airways even sells access to its “preferred” status: a traveler who is short 1,500 miles to qualify for a particular elite tier can pay a $249 fee to close that gap. Prices vary depending on the mileage needed, but can run as high as $3,999 for 100,000 preferred miles.

While airlines do not disclose how many people are in each elite tier, Henry Harteveldt, a travel analyst at the consulting firm Hudson Crossing, said about 3 to 4 percent of a carrier’s frequent-flier members had elite status. Delta and United each have 90 million frequent fliers, and American has 69 million, which means anywhere from two million to four million elites a program (though the number may be higher).

“When you think about the scale of these programs, it’s an enormous volume and, of course, these people travel more often,” Mr. Harteveldt said. “When you’re on a hub-to-hub flight like United from Chicago to San Francisco, elites can sometimes make up between a third and half of the plane.”

There are some signs that carriers recognize this issue. Delta recently announced that starting next year, passengers can qualify for elite status based on miles earned (or segments flown) and by spending at least $2,500 on Delta tickets, not including taxes or optional fees. The spending requirement is waived for those who charge $25,000 a year using a Delta credit card.

“I expect other airlines are going to take steps to thin out their elite ranks by instituting similar spending requirements,” Mr. Harteveldt said. “The people who fly the most and spend the most will receive the benefits they value more often.”

But airlines also value the revenue they earn from selling some benefits to nonelite travelers, a growing practice as the industry seeks to maintain its profits.

For $10 a flight, JetBlue passengers can buy access to priority security lines typically reserved for elite and premium cabin passengers. American sells priority boarding for $18 round trip, as well as a “Choice Essential” package for $68 that includes priority boarding, a checked bag and a change fee waiver on a domestic round-trip ticket. Even Southwest, known for its “bags fly free” motto, recently began selling an early boarding option for $40 a flight.

Article source: http://www.nytimes.com/2013/03/05/business/elite-status-on-airlines-loses-some-of-its-appeal.html?partner=rss&emc=rss