It’s Not Too Late to Excommunicate Yourself From ‘The Elite Class’

In name only, how airlines have tortured the value of elite status and why loyalty-free travelers are happiest.

When United announced its big elite program devaluation last month, you would have expected a bigger reaction. But we are so bombarded with a high volume of news each day that it’s easy to quickly forget about each world-changing scare that comes our way from one week to the next. Indeed, it becomes old news three days later.

That’s what came to mind when I heard about United dismantling their elite status just weeks ago.

Remember?

Probably not. Likewise, you might not remember me telling you 9 years ago to forget about elite status, or what I told you 8 years ago, that it was a con game.

That’s OK, I’ll let you off.

I’m not really in the opinion business. I prefer to provide exclusive insights with data and let you decide how they fit your specific situation. With that in mind, this piece is not a how-to, but a how-to-see-through. I’ll review what’s been happening to elites historically, why it may be time to finally jump ship, and how to view elite status in 2020, especially given the drop in First Class domestic fares and other upgrade trends.

In a nutshell: While those seeking elite status have to meet increasingly-higher spending requirements in order to hold onto increasingly valueless perks, the Loyalty-Free Traveler can opt for the increasing number of low-cash-cost upgrade opportunities open to them by NOT being married to a program.

The Problem (Years in the Making)

It’s a waste of time to be an expert on elite status programs.

Why? Unless you’re flying short-haul leisure routes, forget about getting an upgrade unless you’re a top-tier elite, and even then you’re playing Russian Roulette. And if you’re a top-tier elite, I hope it’s by chance. Like, for example, if you fly from Mobile to Atlanta where there is only one non-stop airline, Delta, and you do it every other week. Plus, many travelers don’t have a choice of elite programs anymore, given industry consolidation and fortress hubs. If you live in Phoenix, for example, you’re most likely an American AAdvantage member.

If you fly one route dominated by one airline then okay, being an elite will be incidental and not because you’re often flying out of your way to earn it. But if you do fly out of your way often, or pay higher fares to earn elite status, that’s where I have a problem. Because like a broken relationship, you’re giving way more than you’re getting.

Divorcing Elite Status:
You’ll Wonder Why You Didn’t Do It Years Ago

Let’s face it, the major reason travelers go after elite status is the allure of getting bumped up to a premium cabin. But how often do elites get free upgrades these days given the sharp drop in First Class domestic fares, and given that airlines want to sell those seats and not “give them away” for free? Answer: not often.

But before we get into the solution for this problem, let’s rewind so we’re all up to speed about how we got here.

The Incredible Shrinking Long Term-Value of Elite Status

To be fair, a long time ago and for many years, domestic First Class fares were high enough that elite status made sense, as members were able to fly First Class without paying sky-high published fares (often $1,600 to $2,300 for domestic routes). Yes, pre-9/11 days. Then, when you had to pay good money for First, domestically, it made sense to roll the dice. So, elites relied on low-cost status upgrades to get into First Class, since the upgrades were very often confirmed, because fewer were in the upgrade line, because they cost money. In other words, as not many fliers were willing to pay the high fares, nor elite upgrade fees, the upgrade line used to be relatively short, and so the frequency of confirmed elite upgrades supported the wisdom of maintaining elite status.

So, I can’t really blame the elites of yesteryear. What’s more, elite status used to come with exclusive trimmings, more recently priority check-in and boarding, preferred economy seats—plus a good shot at an upgrade to First Class.

So what happened? A number of things: namely, an increase in free upgrades (a supply and demand nightmare for elites) and airlines that started bundling and selling elite status perks to anyone, even non-elite members, to increase sales. In essence, everyone became an elite.

If Everyone’s Elite, Who’s More Elite?

In Orwell’s “Animal Farm,” the pigs proclaimed that, “All animals are equal, but some animals are more equal than others.” I see parallels with the often-piggish airlines.

The demise of elite status began when Delta started giving away free, unlimited complimentary upgrades to any elite regardless of status level. Then, when United followed suit in 2009, there went the neighborhood. Everyone got in the free, elite-upgrade line, meaning there was much more demand for a limited supply.

Even minor perks like priority check-in, boarding, and preferred seats became less valuable when airlines started “bundling status perks.” Selling the perks to non-elites to maximize revenue, at the expense of diluting the value of elite.

Love That You’re an Elite? So Do the Airlines.

As these low-hanging elite goodies became available to every Tom, Dick, and Harry carrying the airline’s co-branded credit card or hotel partner elite card (or just willing to pay for these perks a la carte), everyone became an “elite,” and it drained the very lifeblood from the word. Elite status became largely an ego boost with dangled promises, which usually went unfulfilled, especially for low- and mid-tier elites.

The simple truth: Elites are married to an airline, but the airline is not married to them. The airlines use elites—whisper sweet nothings at every opportunity—but that’s just it, they’re whispering nothing, with the inability to deliver, if not outright disinterest to deliver. So what’s a broken-hearted First Class Flyer to do?

ELIMINATE RISK BY PayING the Fare Difference
(it’s often MUCH cheaper than you might think)

The “difference” between First Class and coach, given all of the fees that can come with coach, is at an all-time low. Fare-Difference Upgrades (FDUs) can be low when you compare apples to apples (see FCF’s Dec. report for more).

No longer does First cost five times what coach costs. Nowadays it costs ~1.5X to 3X coach (I’m speaking in broad terms for convenience). I envision three to six times the number of First Class seats being sold, well before elite upgrades begin to clear. How can elites be happy that the airlines are selling more First Class seats, ones that were formerly free to elites?

Elite Status-tician: the Numbers Don’t Lie:

When you add in all the “extras” you could pay out of pocket for a coach ticket, such as seats with extra legroom, priority boarding and/or a meal, you’re looking at much slimmer fare differences when you just pay for the First Class ticket and get those bonuses included in the ticket price.

Think of it like a cheap upgrade: Get all the goodies for slightly more than coach, just by paying for the First Class ticket out of pocket. First Class fare “muscle memory” fights this idea. Modern-day reality supports it.

Think of all the anxiety you’ll avoid. How crazy-making can it get, as the flight draws near, and you’re just hoping against hope for a First Class upgrade?

Especially knowing your chances are slim?

Why Loyalty-Free Flyers Are Winning the Upgrade Game Today

The lesson here? As a Loyalty-Free Traveler—when you’re not shackled to one elite program—you have the flexibility to shop around and fly the cheapest airline. Right now, Delta often has the lowest fares.

But that can change at any time. Next month or next week, American or United may have the lowest fare.

In any case, not being elite focused means you can score the best deal on any airline. You’ll also have access to more schedule options when not tied down.

Elite or E-Lite? Don’t Fall For the Airline’s Oversell

By now, it’s clear that the airlines have taken down the velvet price rope to First Class. So what’s the point of striving for elite status if you have the budget for the seat, and can usually confirm it at the time of booking?

So, if you want to feel like a “hot shot,” the last thing you’d say is that you’re an Executive Platinum with American, a Diamond with Delta, or 1K with United.

Instead, you’d tell me you just scored a Business Class ticket to Europe for $1,100, or bought a $34,000 ticket, with a shower onboard, for $4,800, or a ticket to Mexico in Biz Class for 6,000 fewer miles than coach, or a First Class ticket to Asia for $3,807, which normally costs $19,000 or booked a free vacation while lowering the cost on a domestic ticket.

Now those are some things that should make you feel special ; )