The airlines are slashing fares and making it easier to earn elite status. Andrea Bennett explains why that's good news for some—but not all—travelers.

Delta airlines shocked the airline industry in January by announcing that it would cut its domestic ticket prices—drastically reducing some unrestricted fares by as much as half. As this issue went to press, most of the major airlines—United, US Airways, Continental, and Northwest—were following Delta's lead, lowering fares in markets where they compete with Delta, though only American Airlines reduced fares in the majority of its markets. Perhaps more important, though, Delta declared it would be making major fare-structure changes, including capping the price of one-way fares (even for last-minute walk-ups) at $499 for economy and $599 for first class; eliminating the Saturday-night-stay requirement on all round-trip tickets; and reducing the cost of changing a ticket from $100 to $50. Such an extreme shake-up appeared to be Delta's attempt to remain competitive with low-fare carriers, which have always offered customers a simpler approach to buying tickets.

But prior to this restructuring, Delta had been quietly changing other aspects of how it does business. In December it introduced significant alterations to its SkyMiles program for 2005, making it far easier for non-elite flyers to gain Platinum status, and decreasing the bonus to elite members who buy business and first-class tickets. This news came as an unpleasant surprise to many Platinum Medallion members, who worked hard all year to keep their status but comprise only 2 to 3 percent of the airlines' passengers. Eddie Green, a SkyMiles Medallion member who has flown more than a million miles on Delta and who has even taken "mileage runs" to keep up his status, now wonders why he even bothered.

The result of these changes, as Green sees them, will be long lines at the elite check-in counter, competition for upgrades, and member lounges clogged with passengers who didn't earn their miles the hard way. He's right. Coupled with dramatically lower fares that will attract new, status-hungry passengers, this democratized mile-earning program is a threat to elites. But the vast majority of fliers find these new rules an unexpected boon. Matthew Bennett, publisher of the on-line newsletter, estimates that participation in Delta's Platinum Medallion program could double this year.

And while the long-term impact of fare restructuring won't be known for some time, the recent modifications that Delta and other airlines have made to their frequent-flier programs are already affecting consumers and telling a story about the reshaping of the U.S. airline industry. Even if you have no aspirations to become an elite flier, read on. These frequent-flier-program changes pertain to awards and upgrades, too.

Earning Elite Status

THE LOWDOWN Bad news for some, good news for most

DELTA Miles flown on Delta don't always equal "qualification miles," or the number of miles you need to become an elite member—it depends on what type of ticket you buy (business, full-fare coach, discounted, deeply discounted, etc.). Now Delta travelers will get full credit toward Medallion Qualification Miles (MQM's) for all discounted fares. On the other hand, business and first-class fares, which previously earned double mileage, will net you only 150 percent of miles flown; full-fare coach and high-priced economy fares will be worth just as much (see chart below).

To get Platinum status, Medallion members will need 75,000 MQM's per year, down from 100,000. Gold and Silver status stay the same, at 50,000 and 25,000 MQM's, respectively. This puts SkyMiles on par with its SkyTeam partners Continental and Northwest.

CONTINENTAL Though Continental hasn't introduced any new changes, it has always offered full credit for elite status to those who book discounted tickets on-line. (Those who book discounted tickets via phone or in person get only 50 percent credit.)

UNITED This year, United Mileage Plus members can give away Premier status to friends if they earned 125,000 elite qualifying miles in 2004. And now those who want United status can just buy it. In what appears to be an aggressive move to raise cash, the airline is now selling prepaid travel cards. For $5,000, travelers automatically get Premier status and $5,000 credit to spend on travel this year. Premier Executive status costs $10,000; $20,000 will propel a passenger right into 1K membership, United's highest level. (Each gives you the equivalent amount in travel credit through February 2006.)

US AIRWAYS It's also easier to achieve elite status on US Airways. Now, first-class and business fares earn double the miles flown toward Dividend Mile status (it used to be 150 percent), and full economy fares earn 1 1/2 times the miles flown, up from a straight one-to-one conversion. Discount coach continues to be credited mile for mile.

Redeeming Rewards

THE LOWDOWN Easier for most

Changes in the airlines' elite requirements (up or down) will have little effect on travelers who are simply interested in accumulating miles for awards. Passengers buying discounted tickets have always earned full mileage for award travel. But redeeming award points has historically been an opaque process; now some airlines are making it easier, though they're not necessarily increasing the number of award seats.

AMERICAN In October, American added a chart to its Web site that shows which dates in the next five months will be available for award mile redemption on its most popular routes.

CONTINENTAL Continental has also added a calendar to its Web site showing availability for two months around a chosen departure date. In addition, it has eliminated all restrictions on travel dates for standard awards.

UNITED The airline now gives a 50 percent mileage bonus for award travel to those in first class and a 25 percent bonus to those in business class.

Getting Upgrades

THE LOWDOWN Fewer seats, more fees

DELTA Sharing coveted member-lounge real estate may be the least of Medallion elites' troubles. Now, any Delta elite member booked in full-fare economy class can get a free upgrade at the time of ticketing; before, upgrades had to be confirmed 72 to 100 hours before departure. However, an explosion of heavily discounted first-class seatson domestic flights will cut down the number of available upgrades," target="_blank">'s Bennett points out. "Add twice the number of elites going for upgrades," he says, "and upgrades could be slashed by seventy-five percent in some markets."

AMERICAN AAdvantage members who use miles to upgrade from discounted coach between the United States and Europe, Japan, and some Latin American countries will now have to pay $250 in addition to 25,000 miles for a one-way upgrade (this fee doesn't apply to other routes). Upgrading on a round-trip costs double: $500, plus 50,000 miles.

CONTINENTAL At the beginning of the year, Continental raised the fee on upgrades to BusinessFirst from discounted economy. One-way upgrades from some full-fare economy-class seats increased to $350 from $300. The fee for upgrading from some discounted economy-class seats rose to $400 from $300; for the most deeply discounted classes, fees rose to $450 from $400.

What It All Means

Contrary to what mileage experts predicted two years ago, the elite-program pendulum seems to be swinging back toward generosity. But every one of the latest round of changes—"simpler" fares, now accompanied by upgrade fees; lower status benchmarks, with increasingly difficult-to-attain benefits; clearer award-availability rules, with no increase in award seats—look like a shell game on the part of the airlines. If they shift their fees fast enough while drawing more people into the game, maybe the airlines can stay afloat a little longer. But by appealing to a wider range of customers, instead of those who pay the most money, the airlines are diluting the significance and benefits of elite status to the extent that elite programs are becoming irrelevant. What we know now: domestic and international economy and restricted airfares are at historic lows, making many travelers less patient with the mileage game—and more likely to buy their tickets outright.

The formula for "qualification miles"—the number of miles you need to become an elite member—depends on what type of ticket you buy. Most airlines also allow you to rack up segments (one flight equals one segment), a formula that benefits commuters who fly short distances often. Thankfully, the recent round of changes has brought some standardization to the industry. Here, what you earn per round-trip flight:

American Airlines AAdvantage
FIRST CLASS Miles x 1.5; 2 segments
BUSINESS Miles x 1.5; 2 segments
FULL-FARE COACH Miles x 1.5; 2 segments
DISCOUNTED Miles x 1; 2 segments
DEEPLY DISCOUNTED Miles x 0.5; 2 segments

Continental OnePass
FIRST CLASS Miles x 1.5; 4 segments
BUSINESS Miles x 1.5; 4 segments
FULL-FARE COACH Miles x 1.5; 4 segments
DISCOUNTED Miles x 1; 2 segments
DEEPLY DISCOUNTED Miles x 1; 0 segments

Delta SkyMiles*
FIRST CLASS Miles x 1.5
BUSINESS Miles x 1.5

Northwest Airlines WorldPerks
FIRST CLASS Miles x 1.5; 3 segments
BUSINESS Miles x 1.5; 3 segments
FULL-FARE COACH Miles x 1.5; 3 segments
DISCOUNTED Miles x 1; 2 segments
DEEPLY DISCOUNTED Miles x 1; 2 segments

United Airlines Mileage Plus
FIRST CLASS Miles x 1.5; 3 segments
BUSINESS Miles x 1.5; 3 segments
FULL-FARE COACH Miles x 1.5; 3 segments
DISCOUNTED Miles x 1; 2 segments
DEEPLY DISCOUNTED Miles x 1; 2 segments

US Airways Dividend Miles
FIRST CLASS Miles x 2; 2 segments
BUSINESS Miles x 2; 2 segments
FULL-FARE COACH Miles x 1.5; 2 segments
DISCOUNTED Miles x 1; 2 segments
DEEPLY DISCOUNTED Miles x 1; 2 segments

* Delta does not count segments toward elite status.