Airport Lounge Access Economics: Who Foots The Bill, How Much Do They Pay?

You’ve miss the overarching principle here. Ultimately the passenger pays for that access. Whether through ticket cost or credit card fees, it’s always the passenger.

I worked in lounge strategy at a major US airline and what you wrote is a good representation of how it works. Your ballpark cost is generally accurate but some airlines have preferential prices with each other.

In your comment about accounting exercise: a disproportionate amount of US-based travelers use partner lounges, so US airlines tend to pay more as a whole and like you mentioned create an imbalance.

Lastly, re: lounge hopping - surprisingly it’s not as common as you would think. My guess is that’s why most airlines are not bothering to limit this.

Also, if you lounge hop between multiple lounges within the same airline, there is a data clean up at the end of the day and it only registers as one scan (which is important because airlines who use third=party operators have to pay them per passenger)

Technically maybe as the only way these lounges can exist is because people are paying to fly and that's where the money comes from. We pay for their light bills, employee salaries etc.
But I would imagine if they closed all the lounges, ticket prices would not change. I think lounges are just part of the cost of doing business.

On a slightly related topic, I have a flt coming up LAX - HND and I'm PLT with AA and it's on AA metal.
How does entry work at the Oneworld lounge at LAX?

$35 reimbursement. $25 cost to operate. Gary would know about this stuff.

You'll have access to both the AA Flagship Lounge in T4 and the joint One World lounge in TBIT. Enjoy.

Thank you for this article. Lately I've been perplexed by lounge access policies in the US & Europe.

Note: I have 1K status on United Airlines, which gives me star alliance gold status.

As a Star Alliance Gold member I get access to Star Alliance lounges even when flying Economy. It's part of the Star Alliance Benefits. I've flown United & Lufthansa in Premium Economy and have been able to use both United Clubs and Star Alliance Clubs in the US and in Europe (ZRH, FRA, VCE, MUC) on my outbound flight and for connections in these airports. Of course access is also granted when flying in Business.

Interestingly, I also fly Turkish frequently into and out of the US. When I fly Turkish Business out of the US - I can use the United Polaris Lounges or United Club lounges. BUT If I fly Turkish Business into the US and connect on a United flight - Polaris AND United Club will NOT give me access to the lounges in my connecting city (ORD, IAD, IAH) because "Turkish doesn't pay us for arrivals"
Ok...then please can someone explain what the hell is the lounge access for Star Alliance supposed to mean?

Recently flew United Business class from IAD to MUC. Did not have a connection in MUC but since it was an early morning arrival wanted to use the Lufthansa Senator lounge to do some work and refresh. I've done this in FRA and ZRH. The desk at the Lufthansa lounge REFUSED me entrance. I said I'm business and Star Alliance Gold and they said that "United doesn't pay us for arrivals" and "Munich doesn't have an Arrivals Lounge like FRA so we can't give you access" Then she further said "Every city is different"

I disagree.

According to the Star Alliance website:
"Star Alliance Gold (SAG) Customers travelling on Connecting Partner Flights
1. As a Star Alliance Gold customer traveling on Connecting Partner Flights in any class of travel as part of an itinerary that involves at least one Star Alliance flight, you have access to member airline lounges, Connecting Partner Lounges and third party Contract Lounges contracted by the Connecting Partner at the airport where your flight departs, if the following conditions are met:
Simply present your boarding pass with the Star Alliance Gold indicator for the Connecting Partner’s flight.
If your boarding pass does not show the Star Alliance Gold indicator, you will need to also show a valid Star Alliance Gold card (e.g. digital or physical FFP card) and proof of a connecting itinerary (e.g. their travel itinerary printed or shown on their mobile phone that shows the Connecting Partner operated flight is on a same day itinerary as a member carrier operated flight or a boarding pass from their same day connecting member carrier operated flight).
2. You are entitled to one eligible guest traveling on the same Connecting Partner Flight as the Star Alliance Gold member."

So according to #1 above - United should give me access to the United Club in EWR or IAH when I arrive on a Turkish business flight and connect on a United Flight. I showed the lounge this verbiage and the answer was "I don't know anything about this and besides Turkish doesn't pay us"

Why does it make sense to give away Star Alliance Gold so easily for an airline like Aegean?

Provided you have your AA# attached to your ticket, then you just have the lounge attendant scan your boarding pass and you should be good to go into either lounge.

Star Alliance allows access on departure; however, individual airlines may offer more generous access (arrival) for their own customers. That’s why you can get into UA Polaris Lounges when on a UA connection and not on TK connecting to UA - however in that instance you should have United Club access because of your Star Gold and international segment (a requirement in United Clubs when Star Gold is earned through MileagePlus). It’s not that “XX airline won’t pay”; it’s simply not how the rule is written. Unfortunately as carriers try entice more customers to stay on their own metal (especially in non-JV scenarios), customers think of this enhanced lounge access as the baseline.

Also, Lucky, all the alliances account for payment differently. OneWorld is significantly more nuanced than Star Alliance, for example.

I'm guessing it's a requirement of being a member of *A.

I have to say I've benefitted from this myself, but do airlines (or the alliance) make any effort to restrict people from lounge-hopping? All it does is rack up charges to the paying airline I suppose, and I would guess they would want to not have to pay for that.

But I guess that would take some software and changes, and the lounges themselves have no incentive to stop it. I recall some places stamp your boarding pass, but a physical printed bp is no longer sure to be used or a feasible mechanism.

In the late 1990's, many US airline lounges didn't check credentials. You just walked in!

I find lounges to be a mixed bag. The downsides of a lounge is having to go to the airport too early and not being able to see more of the airport.

Lounge users should be taxed more to punish them. Why can't Spirit passengers get lounge access easily? :p

Yes, flew out of SIN recently on JL in First and enjoyed the QF First lounge and the QR Business lounge, which were both fantastic. No problem getting in, just scanned my JAL boarding pass, and I don’t have any Oneworld status. Meanwhile, the JAL website said they use some contract lounge in SIN, which looked substantially inferior to the QF & QR offerings. No doubt to steer pax to the cheaper option for JAL.

See the comment below about lounge hopping from a former lounge employee.

Gary would claim to know about this stuff.

So if they visit multiple lounge operators, who gets credit for the “single” scan? The first operator?

Yeah but the airlines chooses
the treashold for gold…. LH was 100k miles and A3 was like 12k…

(reposting again...)

There are people who travel on routes like ATH-SKG with quite some frequency, often having to buy the cheapest fare due to employer policies. 12k miles could mean 30 of those flights. Aegean may not make a huge amount of money per ticket, but they are keen to retain those pax as they help feed the ATH hub- destinations like LIS and BUD would be very hard to sustain on a year-round basis without connecting traffic from/to the rest of Greece.

Air Europa do the same, you only need 26 segments for gold (Elite Plus). Convincing a couple of thousand people to spend a couple of thousand Euros each with them instead of taking the train may not make a huge amount of difference to their accounts, but it will contribute to keeping short routes (they're just restarting SVQ and VGO) alive and generate a small but important amount of lucrative traffic to Central America etc.

Ben, can you do an article explaining how frequent flyer points on partner airlines work? Like if I fly BA but put my AA number in for status/points, does BA give AA part of that fare?

Except for passengers with connecting flights (same booking), lounge hopping might not even be that easy or enjoyable to do anyways because, in many cases, access to partner lounges is restricted to 3hrs before departure time.

I've only been to a couple of airports where some hopping could be doable but, even there, you have to rush between lounges (not that lounges are next to one another) and also hope for no capacity constraints. This can be fun for the lone travel geek, but probably less fun for accompanied travelers.

@Timtamtrak, I think the 'single scan' scenario @PT described sounds like it occurs when you visit multiple lounges belonging to one partner airline (let's say CX's F lounge followed by the J lounge, or even something like AC's MLL followed by the AC Café).

The comment was not from a former lounge employee but a former lounge strategist.

Lucky - Let’s say I have Star Alliance Gold from United and traveling from FRA to JFK on Singapore Airlines. If I access the Business Class lounge vs the Senator Lounge, does this mean that Singapore Air pays the fee for the former and United pays for the latter? What if it’s one of those Lufthansa lounges in FRA or MUC where the Senator lounge is embedded in the Business Class lounge (ie, they make you walk into Business with a “key” to use to get into the Senator lounge section that’s partitioned off with a glass sliding door) - is it the operating carrier or who you have status with that pays?

@hbilbao
That's really only The Alliance of Unwanted Airlines that has a 3 hour limit. Oneworld and Star Alliance does not.

But how often does one really want to come that early, and if it is an outstation and you need to drop luggage you are restricted by when the bag drop opens.

Short answer is yes, BA effectively buys miles from AA (offset by AA buying miles from BA when people crediting to BA fly AA).

Air Canada lounges also have a 3-hour limit. They made me fish out my inbound boarding pass to let me in at FRA... yeah, your premium passengers don't have anything better to do than drink the cheap coffee from your machines.

The question I have is how do lounges getaway with terrible offerings given the cost of $30 or $50 eg- terrible terrible dirty lounge at Bali airport, subpar lounge and very crowded lounge at Phuket airport, and back here in Melbourne…. Virgin lounge which cost aud$65 and offers very little other than space. I suppose they are catering to people who drink but I don’t see many people getting into the alcohol. I have come to think it’s about making people think they are special and making lots of money for nothing! There are exceptions such as the Qatar lounges and the Cathay lounges which are incredible.

Yeah, AC has a 3hr limit that's enforced even when using the automated gate (just happened to me last week at YVR, among other times), unless you're in transit.

Priority Pass rates are negotiated through Collinson.
Payment networks now define required features by card tier, such as World, World Elite, Signature, and Infinite.
Banks can either negotiate directly with Priority Pass or adopt the rates established by the payment network

Very true - we once did a "lounge tour" in Terminal 3 at Heathrow. Managed 4 lounges, and felt rather guilty afterwards as a one drink visit would have been charged at a daft cost. But you are of course right - no need to feel anything other than that you are getting something back from your expensive ticket!

Given one passenger’s usual consumption I would think that’s a pricey bill to pay. I wonder how much that very nice DeltaOne lounge is.

I think that lounge hopping is a very geeky concept. Probably only for the crowd here reading OMAAT and similar blogs. The other 99%, I assume, will want to have a quiet time to get some work done or just relax and have a free drink. And for those lounges which have time limitations I doubt that this is followed up upon by the lounge staff - maybe adding another 0.1% to the 1% of lounge hopping geeks. With my more than 3,000 flights I only did that once when a lounge was too crowded.

In Asia, I always pay with eardrums anytime an American or British person enters into a lounge.

Hmmm. What about Australians or Indians? Of while we are at it, Chinese? Or groups of Japanese or Koreans? I can keep going.

Which 'very nice DeltaOne lounge' ... JFK, LAX, BOS, SEA? Haven't tried SEA yet, but the other three are excellent. Interesting how they've skimped on ATL... *incoming TIM DUNN*

In your example (FRA-JFK on SQ with UA Star Gold), SQ would pay for your access to any business class lounge in FRA (assuming you are traveling in business), which includes AC MLL and LH Business Lounge. However, given your UA Star Gold, you’d also have access to LH Senator Lounge, which UA would pay for.

In your example of lounge within lounge, that would only count for one entry.

I agree with you on the comment that "however in that instance you should have United Club access because of your Star Gold and international segment (a requirement in United Clubs when Star Gold is earned through MileagePlus)."

Unfortunately in IAH arriving on my Turkish Airlines Business class ticket and connections on a UA domestic flight - They refused me access at the United Club for the same reason. I tried to reason with the club staff that I'm Star Gold traveling internationally and they said NO - which completely defies the benefits of StarGold!

A few years ago I had to ask the server at Cathay's Wing FC; to ask a main-land Chinese woman to stop having a loud-shouty conversation, on her phone, with the speaker on .....full-volume.

Lucky,
You have shared nothing new in your article that your readers already know.

“ a major alliance will be billed at somewhere around $50 per person, and a contract or Priority Pass lounge will be billed at somewhere around $30 per person.”

You just quoted the price for PP lounge access, which is USD 35.

'Groups of Japanese'? are you completely out of your mind?