Things moved quickly in the loyalty world yesterday. Amidst the craziness of the COVID-19 crisis, Delta Air Lines was the first of the Big 3 airlines to announce an extension of elite benefits. The Delta announcement was thorough, detailing elite status extensions, membership extensions for things like Sky Club access amongst other items. United reached out to me later in the afternoon to give me an overview of what they were planning. Their announcement was similar to Delta on elite status and subscriptions. However, they didn’t immediately disclose how much easier they would make it to earn elite status. They’ve done so now. It’s pretty generous. Let’s dig in.
United Airlines Reduces Elite Qualification Requirements by 50%
United Airlines announced that it was dropping the elite qualification for each elite level by 50%. It’s worth keeping in mind that United raised qualifications for elite status late in 2019. These levels were already much higher than previous years. Here’s what the new chart looks like:
These numbers are considerably lower than they were in 2018. Without checking the math, I think you’d have to go back 3 or 4 years to see levels this low. For some folks, this drop in elite qualification requirements won’t matter. Business travelers will get on the road if and when their company allows/tell them to do so. At that point, we’ll probably be far enough along in the year that a bump in status will be out of reach for many folks, especially given cheaper ticket prices on reduced demand. Still, it’s a great opportunity for those pressed back into paid travel in 2020.
United also alluded to changes beyond 2020 in qualification requirements. That will be an interesting one to see. I anticipate travel to grow once the impact of the coronavirus pandemic has passed. However, I view the recovery here as more gradual than during 9/11 or the Great Recession. Lowered requirements probably makes sense for both the airline and their customers.
United Airlines Increasing The Ability To Earn Status From Credit Card Spend
United announced that they would double the amount of PQPs a customer could earn from spending on the United Explorer card through the end of 2020 and quadrupling the amount that could be earned from spending on the United Club credit card. More details are coming on this, but I view this as an incredibly smart move on United’s part (as well as Chase, their credit card partner). Customers largely can’t fly right now. With uncertainty around their job, maybe their thinking about trimming expenses by getting rid of a credit card or two. By making it easier to earn elite status through credit card spending, United and Chase are giving folks a really good reason to keep those cards in their wallet. There’s no question that the depth of the relationship between United and Chase requires them to work together in this crisis. Customers cancelling cards is bad for both of them.
Will American And Delta Follow Suit?
Though I may have listed those two airlines alphabetically, I’m going to take Delta first. They’ve made their announcement, and I don’t see them adding to it anytime soon. They do have rollover MQMs (their version of elite-qualifying miles), which will help make it easier for some folks to qualify next year. Delta may announce something later in the year, but I don’t think they’re under pressure to do so right now. While some folks might be showing concern about elite status, there’s not much they can do right now. Most of us aren’t actually booking travel.
Some smart folks are wondering whether now is the best time to make announcements like this. It’s hard to argue against that logic. There are so many other areas to focus on at the moment. That may be why we haven’t heard from American Airlines. Not only is there all the personal reasons why folks are focused elsewhere, American is busy trying to save their business, like every other airline. American may be closer to the edge than some others right now.
"The margin for error for American management to navigate this crisis outside of the courts is growing uncomfortably thin."
J.P. Morgan analysts don't mince words on their view of American in this crisis. $AAL
— Edward Russell (@e_russell) April 6, 2020
The Final Two Pennies
All good announcements from United Airlines over the past 24 hours. Some of their earlier actions regarding refunds have cast the airline as misunderstanding the current level of panic by their customers. These most recent moves are geared more towards giving customers comfort. Airlines, along with thousands of other businesses, are fighting for their existence. Maintaining that balance between customers and shareholders can be tricky at the best of times. One has to wonder what customers will remember most from this time. Will it be the fact that the airline broke a promise on a refund the customer was entitled to? Or, will it be the generosity on extending status. I’m guessing it largely depends on how the current crisis plays out. I wouldn’t rule out that it’s neither, and customers find a whole new normal.
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