One question I’ve been asked a lot lately is whether I think the US legacy carriers will offer a double elite qualifying miles or double elite qualifying points promotion in 2013. We’re well into October and I know many people are trying to plan their travel for the rest of the year based on which status level they’re hoping to achieve, so I thought I’d share my thoughts.
While I have no “insider knowledge” on this, I think it’s important to understand why airlines offer these types of promotions. It’s not to be “nice” or even because they “screwed up” (which was the reason American cited for running the promotion a couple of years back, including the grounding of their MD-80 fleet, cancellations due to pilot walkouts, etc.), but rather because there’s a target number of elite members they’re hoping to have in their program, and they’ll do just about anything they can to achieve that target, even if it means offering double elite qualifying miles for more than half of the year.
This year has really been incredible for the airline industry, given that most of the legacy airlines are actually consistently turning profits for the first time that I can remember.
When you look at what that actually means, it suggest that more high value customers are traveling. Even when the airlines were losing hundreds of millions of dollars they were still flying their planes full, but just at very low yields. If they’re actually turning huge profits it suggests to me that they have a lot of high value customers already flying, so they don’t need to do much to incentivize them further.
Airlines have a target number of elite members because there’s a balance between wanting to build loyalty and trying to maximize the revenue per passenger. I mean ultimately if American had a Platinum member that was “loyal,” they might prefer that to an Executive Platinum member who’s getting unlimited domestic upgrades, not paying change fees on award tickets, getting eight systemwide upgrades per year, etc. Meanwhile a Platinum member would have to purchase sticker upgrades or use miles for domestic upgrades, pay miles and huge co-pays for international upgrades, etc.
Given that, here are my thoughts on each program, which is hopefully helpful for those trying to re-qualify for elite status:
Over the past couple of years American has been the carrier that has offered the most double elite qualifying miles promotions, and a couple of years ago even offered the promotion twice last year.
However, that was prior to the bankruptcy reorganization, which has allowed American to streamline their organization and focus on profitability. In fact, AMR, the parent group of American Airlines, just reported their most profitable quarter in company history.
Given the goodwill they’ve built up over the past year, and the healthier balance sheet, I’d say it’s unlikely we’ll see a double elite promotion from American.
Delta Air Lines
Earlier this year Delta introduced a minimum spending requirement for elite status beginning in 2014. That means in addition to earning a certain number of MQMs (Medallion Qualifying Miles), travelers also have to earn a certain number of MQDs (Medallion Qualifying Dollars), ensuring they’re spending an average of a minimum of 10 cents per mile to achieve elite status with Delta.
While there are ways around that requirement for Skymiles members based outside the US and those that have a co-branded Delta credit card, the net effect is to reduce the number of Delta Medallions going forward. Thus it wouldn’t make sense for Delta to try to bolster the elite ranks this year, in my opinion.
Similarly to Delta, United also announced a revenue requirement for 2014 elite status requalification. The thresholds are the same at an average of 10 cents per mile, and like Delta, the revenue requirement can be waived through spending on a co-branded credit card, or for those outside the US.
Given that United has already made efforts to thin their elite ranks after their merger with Continental, I think it’s unlikely they’d reverse course at this point.
US Airways is the only airline out there I know that will sell you top tier status for a reasonable price. Combined with the uncertainty surrounding their proposed merger with American, there doesn’t seem to be much incentive for them to offer a double elite qualifying miles promotion this year.
So while it’s not inconceivable that one of the legacies will still run a double EQM or double EQP promotion this year, I’m not holding my breath. I wouldn’t be surprised to see some targeted promotions, but that’s the extent of what I’m expecting. And that’s just because the airlines don’t seem to have to offer it this year.
What do you guys think? Anyone more optimistic than I am about a double elite qualifying miles promotion?