Airlines change frequent flier rules

By Barbara De Lollis
USA Today

Frequent fliers who pay the highest airfares will command greater respect next year as full-service airlines reappraise their most valued customers.

Merely flying a lot is no longer enough to break into the benefit-rich elite levels of some frequent-flier programs. Now, some airlines are starting to look at how much revenue their top fliers produce, and they're distributing such perks as first-class upgrades and priority boarding rights accordingly.

Starting next year, Continental Airlines will give high-fare passengers an edge over people who buy discount tickets by assigning flights on the highest fares three times as much credit toward elite status as those made on the cheapest fares. Delta Air Lines adopted a similar policy in January.

Next year, Alaska Airlines will make its first-class section more accessible to elite members who pay the highest fares. At the same time, it's restricting its elite membership rolls by increasing eligibility requirements.

Continental's new elite qualification rules mean that for someone paying $182 for a Newark, N.J.-Cleveland round trip, only half the miles would count toward OnePass elite membership, but someone paying $1,240 roundtrip to sit in first class on the same flight would receive 1.5 credits per mile. On some routes, the difference between a full-credit fare and a partial-credit fare is less than $100.

Other airlines alter programs

Linking a frequent flier's status to the fares they pay isn't entirely new, however. Other examples:

• American began counting airfares paid in 1998 as one of three options in calculating membership in AAdvantage Executive Platinum, the top tier of its frequent-flier program. Two years ago, it extended the option to the platinum and gold levels of AAdvantage. Customers who fly on discount economy tickets get half credit toward elite status but full credit on full-fare economy tickets. Those flying on business- or first-class tickets get as much as 1.5 points per mile.
• Northwest in 2002 adopted a policy that gives a 50 percent mileage bonus toward elite status to WorldPerks members who buy first- and business-class tickets, helping them claim elite status faster. Earlier this year, Northwest also began elite-status bonus miles on full-fare coach tickets. Unlike Delta and Continental — Northwest's marketing partners — Northwest gives full credit to economy-class passengers when they fly on lower fares.
• US Airways runs occasional promotions that award extra elite-qualifying points for higher fares.

With the latest wave of changes, the airlines are creating classes of haves and have-nots in the skies.

Miami accountant Ellen Vargo, for instance, expects to lose her Delta elite status altogether by 2005 because she usually buys discounted tickets. The only reason she doesn't expect to lose Medallion status next year is that Delta won't let members drop more than one tier next year.

"Now I'm not even going to be close. At my company, we don't buy full-fare tickets. You get whatever comes up on the Internet," Vargo says.

The only way she could retain status is if she flies more.

Some of her friends plan to switch to discounter Southwest Airlines, because it still treats all of its frequent fliers the same.

Risky business move

The changes come at a time when airlines are hungry for revenue amid a three-year slump in business travel. Tight controls on corporate spending mean fewer travelers are allowed to take flights on high fares. And the growth of discount airlines such as Southwest and America West have created money-saving opportunities for even last-minute fliers on major business routes.

From January through August, companies purchased more than twice as many non-refundable tickets — usually the cheapest — than they did during the same period in 2000, according to Topaz International, which tracks airfares paid by companies.

The changes in elite frequent-flier rules have angered people accustomed to special treatment. Some elite-level Delta and Continental fliers say they have already contacted other airlines seeking incentives to move their business because they expect to lose their elite status under the new rules.

Changing rules that haven't been tinkered with in more than 20 years is risky for the carriers, says Randy Petersen, editor and publisher of InsideFlyer, a Web site and magazine for frequent fliers.

Frequent fliers take their elite status seriously and have rebelled against changes they don't like.

Last week, because of customer feedback, Delta beefed up the incentives it offers elite Medallion members by sweetening its upgrade policy. For instance, members who reach Platinum status will receive unlimited upgrades at the time of booking based on availability when purchasing three economy-class fare types.