Is It Time to Abandon Airline Elite Status?

As I plan my move away from United Airlines’ MileageMinus program, I want to make clear that leaving United doesn’t necessarily mean I am moving anywhere. There is a difference between not finding value with United and thinking I will find more value with another airline.

I think it is worth considering that we may no longer be in a time when airline status can provide greater benefits than the cost to earn. As I replied to a reader yesterday, I haven’t “hacked” any fares at all this year. I’ve only been trying to take maximize the return I get from the loyalty program.

Airline status still offers value to those who will fly anyway. Are you a frequent business traveler, Monday through Thursday, every week? I hope you include your loyalty account number on your reservations. I won’t argue with that. But what about some of us with more discretionary travel needs?

Everyone Has a Price

United Airlines and Delta Air Lines have put a price on your loyalty. I would argue that’s not loyalty at all. Not to say these businesses don’t have a right to focus on their most profitable customers, but it isn’t quite the same thing. Paraphrasing Rob Johnson in the comments yesterday, to argue that you’ve spent X dollars with a company and deserve an upgrade is not very different from a fee-for-service model. Just buy a first class ticket. Loyalty is the guy who’s flown the carrier every other week despite competing fares or schedules because he feels the airline takes care of him. But I digress… The future is coming and we need to learn to adapt.

Some commenters on FlyerTalk have mentioned the idea of “dollar runs.” The idea is some people will book the most expensive fare available while traveling the shortest distance because they may have 100,000 elite qualifying miles but not anywhere close to $10,000 elite qualifying dollars. Wandering Aramean and others called this idea foolish, but I’m not so sure. Certainly it will not be common, but I imagine more than a few people will have ordinary business travel that takes them near Premier 1K (and beyond the opportunity for a credit card waiver).

And these airlines are not the only ones. JetBlue, Southwest Airlines, and Virgin America all operate fixed-value loyalty programs. Credits are earned based on spend, which means their elite status tiers also have a price. Southwest even has its own credit-card waiver program! Like United giving you the option to waive the PQD requirement if you spend $25,000 per year, Southwest lets you earn tier credits through spend on your Rapid Rewards credit card.

US Airways provides the option to outright buy elite status (for much less), but I don’t see this lasting much longer after the merger. Then again, who knows what the new American might do? We only have vague promises that the merged carrier will adopt AA’s service levels.

Benefits Can Be Purchased

I think most discretionary travelers will find they are better off paying for the a la cart upgrades or first class tickets on the longer routes where it matters rather than investing the extra time and money in mileage runs to earn elite status. Most of the time I don’t really care about an upgrade, like when flying two hours to San Francisco. I just care about flying in a real jet, not a piddly CR7. I don’t get upgraded on CR7s even as a Premier 1K. So it probably makes more sense to buy a cheaper ticket from Alaska Airlines and have my pick of San Francisco or Oakland with a better schedule and a better plane than United’s relatively dismal service on this route.

More and more it is becoming possible to simply buy the benefits you need. Extra legroom, early boarding, priority check-in, and checked baggage? Those can all be purchased or received as benefits of co-branded credit cards. About the only value still provided by elite status are in the form of:

  • Bonus miles
  • Better customer service
  • Complimentary upgrades

Argument Against Bonus Miles

Miles can be outright purchased. Not just through the airline but through many other avenues, as well. Manufactured spending creates plenty of opportunity to buy miles more cheaply and in greater quantities than ever before. Is it worth paying an extra $1,000 (either for more expensive options on a preferred carrier or unnecessary mileage runs) just to earn a 100% bonus?

Vanilla Reloads can be used to “purchase” miles of just about any sort at a maximum price of 0.79 cents each. You could get over 125,000 miles for $1,000, more than any 100% bonus would provide. There are many other methods that are cheaper or even free — though they aren’t always as easy to implement and scale.

Customer Service Can Be Purchased

I don’t want to get bogged down with differences between individual carriers. I think United has made it harder and harder for their elite members at all levels to receive some premium level of service. Other airlines may be better, but it’s always easy to image the grass is greener.

Here’s my question: In what form does your improved customer service arrive? Remember, priority boarding and so on can be purchased separately, and I’ll get to upgrades in a bit. Remaining are things like a free drink in economy class, faster access to telephone agents, and priority consideration for standby or flight changes.

Some of these benefits are minor (drinks), some are diluted (United no longer guarantees Premier 1Ks can speak to a Premier 1K agent), and some can be purchased in another form (special consideration for premium fares). You will probably get better service as a paid first class passenger than as a elite member who was provided an upgrade. It could take longer to reach an agent, yes, but I suggest paying $50 to get into the lounge and speaking to an agent there, where the lines are shorter.

Status: Pending

What do you think? I haven’t really made a decision on this matter, but there are more reasons than ever to think that elite status with an airline isn’t worth the effort unless you’ll need to travel anyway. I originally planned to compare the merits of Alaska Airlines and American Airlines, but given recent changes to Delta’s upgrade system and an expansion of their route network in the Seattle area, I think they deserve some attention, too. I’ll have a post on each carrier next week. For now, Alaska is winning — but only because I think I might rely on award tickets for international travel.

In the meantime, tomorrow I will extend this discussion with some ideas for why I think status with a hotel loyalty program continues to be a good idea.

About 

Scott created Hack My Trip while traveling on a budget during graduate school and continues to share his thoughts on better travel. He maintains elite status with American Airlines, Alaska Airlines, Hyatt, and Starwood.
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  • Suzi

    I think it depends how much you fly without mileage runs. As someone who flies 100+ flights a year for business, it pays to be loyal and get all the perks. The benefits are worth thousands of dollars to me in upgrades and waived fees (tens of thousands really). For a less frequent traveler, I agree that paying for the benefits you use may be more cost-effective than spending on mileage runs.

    • Scottrick

      I would say only 20-25% of my travel could be described as mileage runs. I’m still doing about 75,000 of paid travel to visit friends, family, and for business purposes.

      • Jonathan

        You travel solely on deep discount fares. You don’t make the airline any money. In fact, it’s likely that you actually cost them money. You think they’re not reciprocating your loyalty? Take a look at your annual spend on the airline and you’ll realize that it’s actually you who is not being loyal to them.

        The legacy airlines are tired of travelers like you, and frankly, so am I. Finally, for the first time in a long time, my 1K status will actually be worth something again thanks to the introduction of the revenue requirement.

        Thanks, United.

        • Shane

          Actually United hasn’t promised you anything for the 10k you will spend next year. There’s no guarantee that upgrades will improve or anything special will come with your newly required spend. Trusting you will get something that you haven’t been promised is interesting to say the least

          • Jonathan

            Umm, I’m not trusting anything. I’m using logic. Decrease the the total population of 1Ks and the upgrade percentage for the remaining 1Ks will increase. What don’t you get about that?

          • Andreas

            planes are fuller so there are less seats to be upgraded.. the airline controls everything.. capacity and what cost they decide to sell the biz tickets so there are less to give away as upgrades.. i’m not saying that all of this will happen but we take a chance.

          • Mark

            if you’re already missing upgrades as a 1K, don’t you think you’re losing them to other 1Ks paying high fares like you claim to be? will those people go away?

          • Shane

            Who’s to say they won’t sell those as TODs? Who’s to say that people won’t be buying higher fares than you in order to finagle their way to 10k? Besides, how few 1k’s are you expecting to compete against? Your logic is flawed at best.

          • RK

            @Johnathan – your logic is flawed: you assume that UA is making the same number of upgrades available for fewer status fliers – which is incorrect. UA has increased load factors, reduced seats for upgrades and prioritized paid upgrades over complementary upgrades.
            I have been UA GS for years, the reduced upgrades are noticeable and UA customer service confirmed the reason… I wish you were right, but Im giving upnon UA, will enjoy my lifetime *A Gold and fly opportunistically whatever makes sense for that trip.
            I agree with Scott – if you fly on business every week anyway, live in a hub – collect the status,nyou probably cant avoid it anyway. Otherwise, get some creditcards for the basic perks and fly whatever makes sense for you….

        • Scottrick

          Some of your assumptions are incorrect. Most of my travel is in K and L fares, which while discounted are still two notches above G and N. I even have a few S, W, and Z fares in the mix. Upgrades on these fares don’t cost the airline any money if I’m taking an empty seat.

          You may be correct about finding it easier to get upgraded if there are more empty seats on the plane next year.

          • Jonathan

            It’s not the upgrades that I see as costing the airline money. It’s that the airline has to give you all the costly benefits of 1K status when you’ve spent the year purchasing discount fares that likely generated no profit for the airline.

          • Scottrick

            What other costly benefits am I consuming? Maybe $200-300 in fee waivers per year, $100 in checked baggage fees, and some bonus miles. Big whoop.

        • Trevor

          (1) I think you missed Scott’s point above about how he argues putting a price on loyalty is not loyalty at all.
          (2) I’m highly skeptical that your 1K status will actually be worth something when United continues to sell your upgrades out from under you. Don’t think that practice won’t continue.

          • Jonathan

            (1) I didn’t miss any of his points. Loyalty is ultimately about a company enticing consistently profitable customers to stay with the company. If there’s no profit being made, it’s not loyalty. It’s just a customer gaming the system. And UA has had quite enough of that.
            (2) With fewer elites to compete with, upgrade percentages will increase. End of story.

        • Bgiagg

          Airlines sell all the deeply discounted fares to fill the seats that would otherwise be empty. They are NOT losing money on those fares, otherwise they simply won’t sell them. They should appreciate those customers too, just like department stores welcome their discount shoppers.

          I agree they should value their most profitable customers more, but keep in mind the ‘elite’ benefits are not really designed for the high spenders. People who pay for first class all the time won’t care about upgrade percentage, or worry about luggage fee. In other words, you caring about your 1k status shows you are not that ‘profitable’ to united neither.

          As the airlines like to announce before landing: we have a choice when we choose who to travel with and they appreciate we chose them. And they should. That’s what a ‘loyalty program’ is about. Btw I hope your definition of loyalty was only meant for the airline loyalty program, not how you understand loyalty in general.

  • Geoff

    “MileageMinus” I see what you did there…

  • Shosh Skopp

    Can u ignore my ignorance and explain how one gets 125000 pts for $1000?

    • Scottrick

      It’s more detailed than I can explain here. I recommend you do a search for “manufactured spend.”

    • MFK

      Leaving out the gory details, this could be accomplished through the purchase of Vanilla Reloads (note: I believe the cost per mile should be .0079, not .79, and if you use a card like the Virgin Atlantic MC, where you get 1.5 miles/$, the cost is even lower). It would take quite a bit of time and effort to do so, however. Safe travels.

      • Scottrick

        Yes, but 0.0079 dollars and 0.79 cents are the same thing.

  • Michael Carey

    I’ve been executive platinum for
    Four years but won’t requalify next year because the greatest perk, Systemwide Upgrades are almost impossible to use due to The New AA’s admittance that “our premium product is so good and so popular that we are not going to give it away – even as a published benefit — if we can sell those seats.”

  • David

    I’m not a mileage runner per se, but yes i do keep track. historically (and currently) an AA Platinum who will go to Gold next yr as a million miler (1.8million miles to-date). Status matched to Delta gold 2 yrs ago, will achieve Medallion Platinum for 2014 65 segments/80K seat miles.

    on peak days on DL long ago gave up on freeby upgrades, but real value to better phone cust. service, econ confirm seating, early boarding, free drinks on non upgraded boarding passe — and that based on Medallion Gold. with Platinum expect a few more domestic upgrades.

    benefits above though maybe not striving high are worth. i try to use miles – have piles of DL miles – for confirmed upgrades, but typically i buy cheap fares which aren’t upgrade confirmed w/ miles.

  • David

    what i too should have said – especially given the AA world of sticker upgrades that once you tally the cheap fare w/ the sticker cost as a Platinum — i’m finding on Delta booking ahead i can buy discounted confirmed biz class as OK affordable prices (less than cheapest AA fare+cost of AA upgrade stickets) so hey, do it, confirmed upgrades YES, and too get faster rate of MQM & MQD

  • Neil

    Well reasoned. The only important benefit that comes with elite status (on United anyhow) that is missing from the above list is the ability to make changes to award tickets for free (at least at Platinum levels and above – I think the fees are decently reduced for lower levels). Your audience consists of exactly the types of folk that get great value from this – I know I have three current award tickets on hold and have made at least 10 changes collectively as I inch towards “perfect” itineraries as space opens up. Sure, this flexibility can be purchased by those without elite status by paying the change fee each time, but face it, without elite status you’d probably find it prohibitively expensive to make incremental changes.

    • Scottrick

      Award change fee waivers are good benefit, but they are also the most easily valued since the price is clearly listed and doesn’t vary by route (like a checked baggage fee waiver). Like other benefits including extra leg room or a free drink, an argument could be made for paying these fees only when needed.

      I don’t change my awards as frequently as you do. In your case it might make more sense to ensure you retain access to the fee waiver.

  • Andreas

    I really enjoyed having status but your statement sums it up for me: “Airline status still offers value to those who will fly anyway.” I somehow made UA Gold in 2012 and got great value: 6 upgrades on transcon flights, intl lounge access, excess baggage etc. Can’t put a dollar value on these as I can live without those.

    At the end of the day I got more with status but also spent more i.e. value per dollar is higher but total dollars spent was also higher. This year I’ve decided to get lower value per dollar spent but also spending less.

    So I gave up chasing status in 2012 and flew a measly 15k EQMs

  • Nik

    Another nice post Scott! As one of the few who does plan to largely mileage run my back to status next year (on AA), I’ll throw another reason out at you – stress reduction. Based on a couple of years as an EXP, I am extremely confident that AA is going to get me where I’m going, and that I won’t have to think real hard/beg/whine/flirt/etc for them to do it. At one point, while in the middle of 3 nested itineraries that were horribly broken by a combination of “snowmaggedon” and a mechanical (and 2 of them were Q or O fares), I stood at the gate and watched AA pay an $800 IDB comp so I could get on the plane and make it to work that day. I receive proactive text messages telling me that I’m protected on a later connection if I’m in danger of missing one. It really does change the travel experience.
    Granted, this is only true at top tier, and I’ve had wonderful experiences with other airlines as well at times, but it really is of significant value to be able to relax and trust the airline to handle things.

  • John

    This post illustrates one of the things United and Delta were hoping for – removing the incentives for a non profitable customer to game and receive benefits intended for the most profitable customers.

    Unfortunately other changes – like the draconian increase in intl biz/first partner award prices – which while motivated partly by the increase in cost (i.e yq) imposed by partners – were also motivated by disproportionate redemption by manufactured spending enthusiasts.

    Now profitable customers will suffer.

    BTW had a United exec tell me the same thing that you heard about their impression of your site – a negative one.

    • Scottrick

      It would be interesting to know why United doesn’t like my site. Other companies have not been so reticent about working with me.

  • worldtraveler73

    I agree with the article.

    UA / AC and others have made it too hard to be loyal to them as a discretionary traveler.

    It’s easier just to pay extra, when and as needed.

    When it’s easier to manufacture spend or get points through other means (hotel stays, credit card sign ups), it’s time to take a different appropach.

    I believe that time is now.

  • Ivan

    I have also abandoned chasing elite status, since its no longer worth my time and effort. I don’t travel enough to make elite levels and the mileage runs required to close the gap are not worth the incremental benefits of mid-tier elite status.

    Agreed, when I want a certain benefit, I will just pay for it. There are less ways to game the system now vs years ago, unfortunately, and those ways require more effort.

    My current strategy is pure cash back programs (priceline, barclay, union bank, fidelity) to pay for things with real money, hassle free. Then throughout the year, I throw in a couple of CC sign up bonuses to use for award travel.

  • MarkJ

    I have pondered this myself although I currently enjoy my Diamond status with Delta.

    My “Plan B” would be to downscale to Gold status with Delta [or similar with American or United]. An economy comfort seat and onboard internet would work just fine for me. Add a credit card that gives me lounge access and the “Gold” status benefits of SkyPriority security lines and boarding and I could get by just fine. Wouldn’t be as much fun but certainly a very livable travel experience.

  • Joachim

    Scott, I ever since I first stumbled upon your blog, I have often alway agreed with your comments and posts. I’m a postdoc, I fly for fun, and I’m this year a 1K on UA. This is the first time ever I comment on a post.
    I respectfully disagree with you.
    You also forget a very important perk of UA status: being able to change/cancel mileage tix even last minute. This is a huge plus. How often have I not had mileage tix on hold as backup, and how often haven’t I had to book last minute tix for my friends.
    Also waived same-day-change fee is a huge benefit.

  • MichaelEL

    With United, we can buy EQMs outright for $ 0.14, every time we fly. If you work for a living, and lack “free” time, mileage runs don’t make sense. Sure, you can collect EQMs at $ .04-.06, sometimes close to $ .03, but what is your time worth? I can do some work on the plane, but at perhaps 30-50% efficiency. It just does not calc out- at least for me.

    I agree with Scott that it’s time to evaluate the worth of elite status. For us, Economy Plus, that extra 5″ is a big deal in comfort. Plus the other perks. We also have a unique situation where we need to fly to Mexico PVR about 10 times/year. On those short (1500 M) flights, few will buy FC, so we get complimentary upgrades about half the time. That matters.

    What I’m reacting to, and I think Scott and many of us are, is that flying is no longer the fun adventure it used to be. It has become revenue-optimized rather than customer centric. It’s now a necessity for me, not a pleasure like it once was. Right now, the airlines are on top, 4 huge mega-lines who can call the shots. But in the long run, the abuse of customers may come back to haunt the lines. I hope so.
    Michael

  • BMU

    I have given this a lot of thought. 2014 will be the first year with no status. I simply don’t see the benefit when I can buy miles and be guaranteed J of F space seat for $2000 or use miles from credit cards. FF programs have devalued so much with co-pay and waiting for UG at the gate. No thanks. It was good up until now or if a company pays for it, otherwise I will be status-less for the first time in over a decade.

  • UAPhil

    Don’t forget the less tangible status benefits that can make a big difference. Recently, flying back to the US from India, my MM *G status allowed me to bypass a 1 hour check in line and spend the time in the lounge. Sometimes it can make the difference between making or missing a flight.

  • http://www.mightytravels.com/ MightyTravels

    I’m in the same boat! It’s rather easy to acquire miles cheaply. I have trouble burning all those miles anyways. Adding elite status flying on paid tickets to it would make it really burdensome. I’ll stick with A3 and the occasional status match :)

    http://www.mightytravels.com/13232755/a_quick_update_on_my_status_match_from_aegean.php