From Frequent Flyer to Frequent Spender: How Airline Programs are Changing
News The days of frequent flyer programs rewarding travelers just for flying are gone. Today, it’s about how much cold hard cash you spend.
Of the big three U.S. airlines, Delta and United have both moved to programs that award miles based on how much you spend—not how far you fly.
Now, in addition to requiring elite flyers to log a certain number of miles to gain elite status, the programs have spending requirements for each elite tier of their programs. This revenue component is yet another hoop to jump through before attaining coveted elite benefits such as complimentary upgrades, waived baggage fees and priority check-in.
If you don’t want to hit the spending requirement on paid tickets, both airlines allow you to waive the elite-qualifying dollar requirement by spending $25,000 or more a year on their co-branded credit cards, though this waiver doesn't apply to top-tier United 1K status.
Going the distance
On the other side of the spectrum, American Airlines is the only major US carrier that still awards miles based on the distance flown, adding a bonus for premium and higher economy fare classes. However, American isn’t ignoring high spenders altogether. This year, the airline began awarding mileage bonuses for all premium fares, a particularly good bonus for premium transatlantic travel and a boost to help premium-cabin flyers reach elite status—and all of the associated valuable benefits—faster.
By doing so, American continues to recognize frequent flyers, while still incentivizing big spenders. Delta and United, however, are much more focused more on big spenders than those who fly the most.
How does this shift toward frequent spender programs affect travelers? Professional services giant PwC says, “on average, nearly 40 percent of all domestic passengers benefit in a spend-based program, 15 percent break even, and 45 percent are worse off.” And with business travelers often booking more expensive refundable and last-minute fares, it seems like this segments stands to benefit the most.