When it comes to travel, the theme of 2015 is all about shifting loyalty. Delta and United are both switching to revenue-based frequent flyer programs, meaning you’ll now earn miles based on the price of your ticket rather than based on the flight distance. Starting in February of 2015, we’ll see the elite status ‘cliff' and we will also see more people fall off because of the requirements that are going to be put in place. Here are four key trends to watch for:
1. Brand loyalty does exist, but there’s an eroding middle class. High-level elite status is still amazing (I get treated like a king as an American Airlines Executive Platinum, which I believe is the best airline elite status out there). However, middle-tier elite flyers are losing out -- like with Delta’s recent announcement that their Gold Medallion flyers are losing the ability to book Comfort+ seats at booking. They now need to wait until 72 hours before departure. Delta is saying they’d rather sell them to any old joe off the street than give them to 50,000+ mile a year flyers. United started this erosion several years ago with their Silver elites losing the ability to book Economy Plus seats at booking.
2. Airlines have been looking to improve the in-flight experience and charge more for it instead of simply jacking up fares. Even with industry consolidation, there is still a good amount of competition, especially in battlefield markets like New York, Los Angeles and Seattle where no one carrier dominates. Budget travelers can still snag discounted, advance fares and luxury travelers can now fly more exclusive products because airlines have been really upgrading their premium offerings. Like Etihad’s new AMAZING Residence class, which is as close to flying private as you can get.
3. While airfares have remained relatively constant and fuel prices are dropping, airlines are still making billions on upcharges and fees. Delta’s five new seat classes aren’t really a fundamental change in product, but more a change in the way your typical seat is marketed. Delta is trying to charge more for more services/fees, which is what American did with their Choice Fare structure last year.
4. We will continue to see more credit card offers and more non-flying ways to earn. Personally, my favorite way to earn miles and points these days is through lucrative credit sign-up bonuses.
In general, the sky is not falling, it’s just important to stay ahead of the curve. Make sure that your spending and flying align with the right program. You can always make a status match or challenge to another program that better aligns with your habits. I always like saying loyalty should go both ways, so it’s important to join the program that rewards you the most.