Frequent Fliers Cry Foul Over Credit Card Reform
Frequent Fliers Cry Foul Over Credit Card Reform - Cutting Rewards Devalues Loyalty
Frequent flyer programs have long relied on rewarding customer loyalty to keep travelers coming back. By flying with one airline or staying at one hotel chain, customers could earn points and status that made future trips more enjoyable and affordable. However, recent cutbacks to these loyalty programs have left many feeling that their loyalty is no longer valued.
For years, elite flyers enjoyed generous rewards like free upgrades, lounge access, and priority services. Attaining top-tier status often required flying 75,000 miles or more annually on a single airline. Yet as competition increased, airlines found it harder to justify offering expensive perks to their most frequent customers. Delta was the first U.S. carrier to introduce revenue requirements for elite status, forcing loyal flyers to spend more money in addition to miles flown. American and United quickly followed suit.
These changes leave loyal travelers feeling burned after years spent reaching for top status. FlyerTalk member EndlosLuft complains, "We are the road warriors who are loyal to an airline. The new rules make me feel like a fool for that loyalty." Others agree, arguing that elite flyers contribute disproportionately to airline revenue through high fares and frequent flights. By making status harder to attain, airlines risk angering their best customers.
Unfortunately, loyalty cutbacks aren't limited to U.S. airlines. In Europe, Air France/KLM announced reduced mileage accrual rates and lounge access policies that provoked outrage from top-tier elites. Andrew Y, a popular blogger, fumed over the changes, "This complete disregard for their most frequent and lucrative customers astounds me."
The root cause is simple economics. With tiny profit margins, carriers aim to wring more revenue from elite flyers rather than reward loyalty. But these short-term dollars could cost airlines in the long run if they drive away big spenders. A 2017 J.D. Power survey found that frustrated loyalty program members are increasingly likely to spread purchases across multiple airlines. As competition heats up, airlines can't afford an elite mutiny.
The impending loss of lucrative credit card deals poses another threat. Co-branded airline cards from banks like Chase and American Express offer rich rewards funded by merchant fees. But recent limits on those fees mandated by Visa and Mastercard have sent airlines scrambling for new card deals that deliver less. One airline memo bemoaned losing access to "a fountain of cash."
Again, loyal customers will feel the pinch. Ted L, a hobbyist on Flyertalk, complains that his airline card's "generous benefits made me a customer for life, but the upcoming changes mean I'll be shopping around for a new card." With less money to fund elite perks and status, airlines risk permanently losing once-loyal patrons. That's an alarming prospect with profits already razor thin.
What else is in this post?
- Frequent Fliers Cry Foul Over Credit Card Reform - Cutting Rewards Devalues Loyalty
- Frequent Fliers Cry Foul Over Credit Card Reform - Changes Leave Customers Feeling Burned
- Frequent Fliers Cry Foul Over Credit Card Reform - Airlines Look to Boost Revenue, Not Relationships
- Frequent Fliers Cry Foul Over Credit Card Reform - Credit Card Fees Target Most Loyal Customers
- Frequent Fliers Cry Foul Over Credit Card Reform - Elite Status Gets Harder to Earn
- Frequent Fliers Cry Foul Over Credit Card Reform - Devaluations Could Backfire on Carriers
- Frequent Fliers Cry Foul Over Credit Card Reform - Travelers May Take Business Elsewhere
- Frequent Fliers Cry Foul Over Credit Card Reform - Alternatives Emerging in Hotel and Dining Programs
Frequent Fliers Cry Foul Over Credit Card Reform - Changes Leave Customers Feeling Burned
For years, elite flyers enjoyed generous rewards like free upgrades, lounge access, and priority services. Attaining top-tier status often required flying 75,000 miles or more annually on a single airline. Yet as competition increased, airlines found it harder to justify offering expensive perks to their most frequent customers. Delta was the first U.S. carrier to introduce revenue requirements for elite status, forcing loyal flyers to spend more money in addition to miles flown. American and United quickly followed suit.
These changes leave loyal travelers feeling burned after years spent reaching for top status. FlyerTalk member EndlosLuft complains, "We are the road warriors who are loyal to an airline. The new rules make me feel like a fool for that loyalty." Others agree, arguing that elite flyers contribute disproportionately to airline revenue through high fares and frequent flights. By making status harder to attain, airlines risk angering their best customers.
Take John, a consulting exec and Million Miler on American Airlines. He grumbled over his diminished upgrade chances and lounge access since the revenue requirements kicked in. "I get that the airline needs to make money, but losing the small luxuries that made the slog of frequent work travel tolerable feels like a breach of trust."
Susan, an account manager and Platinum elite on Delta, echoed John's frustration. "I used to feel appreciated for choosing Delta first and flying hundreds of segments a year. Now I'm just another passenger they won't hesitate to nickel-and-dime if I don't keep paying more and more."
Stories like these demonstrate why loyalty program cutbacks feel personal, stinging road warriors who gave one airline years of business. Karen, a Diamond elite on United, said it plainly: "After the carrot of rewards and recognition got me hooked on United, they yanked away my benefits. Where's the loyalty in that?" She has already shifted some flights to other airlines after the sting of status getting harder to maintain.
No doubt airline executives expected some grumbling over the revenue requirements, but they may have underestimated how deeply these affronts would cut their elite flyers. That's because loyal customers don't just value the material perks they earn; they cherish feeling appreciated through elite tiers and upgrades offered in recognition of their support. Diluting those tokens of appreciation through stricter requirements breeds resentment.
Frequent Fliers Cry Foul Over Credit Card Reform - Airlines Look to Boost Revenue, Not Relationships
The airline industry operates on razor-thin margins, so carriers must be creative in extracting every possible dollar from customers. While frequent flyer programs were once valued for breeding loyalty, airlines now see them primarily as revenue generators. This shift helps explain recent cutbacks to elite benefits and status qualifications.
In a quarterly earnings call, American Airlines president Robert Isom defended the airline's tighter elite requirements by arguing "We've got to make sure that we are focused on...driving the revenue." For airlines, loyalty programs are increasingly viewed through this revenue-maximizing lens.
As a result, loyalty to the airline matters less than a flyer's annual spending. Miranda, an executive assistant and Gold elite with 75,000 miles on Delta, learned this lesson despite years of sticking to one airline. "I used to choose Delta every time, but when I called about an upgrade as a Gold member, the agent just said they only clear Diamonds first – no courtesy for my loyalty."
Airlines also maximize revenue by tying elite status and benefits to pricier fares. Traveling on discounted Economy Basic or Basic Economy means fewer miles earned toward status. And elite perks like free seat selection or upgrades are excluded on these bare-bones fares. Airlines once rewarded loyal flyers; now they reward high spenders.
Even mileage accrual and redemptions are revenue-driven. Andrew H, an accountant and Million Miler with United, noticed when the airline switched to dynamic award pricing that pegged mileage costs to ticket prices. "Expensive Business Saver awards now can cost over twice as many miles as before," he complained. "Just another way to extract more revenue from elites by making miles worth less."
Meanwhile, airlines aggressively market co-branded credit cards to those same elite flyers, dangling sign-up bonuses and annual spending waivers to offset revenue requirements. Cynthia, an executive and lifetime Gold member on American Airlines, reluctantly applied for an airline card after the revenue rules kicked in. "I'm basically flying the same routes and buying the same expensive tickets as always," she remarked. "Now I just have an airline credit card bill too."
Granted, airlines are businesses, not charities for frequent flyers. And loyalty programs incur substantial costs. But the shift from rewarding loyalty to maximizing revenue breeds resentment among once faithful flyers. Peter, a software engineer and Million Miler on Delta, summed it up: "Skimping on the small courtesies that made me loyal while constantly trying to sell me stuff feels like a one-way relationship. I guess my business is just a transaction now."
Frequent Fliers Cry Foul Over Credit Card Reform - Credit Card Fees Target Most Loyal Customers
Frequent flyer loyalists feel especially targeted by recent credit card reforms that threaten to gut generous rewards programs. For road warriors who carry co-branded airline cards, the impact strikes close to home.
Jeffrey, an account manager and Million Miler with Delta, has seen those rewards dwindle: “I used to earn double miles by putting all my business expenses on my Gold Delta SkyMiles card. The signup bonus scored me 60,000 miles. But when my card upped the annual fee, I flipped to a no-fee card with skimpier earning rates. Say goodbye to those extra miles.”
Like Jeffrey, many loyal elites carry premium airline cards to turbocharge miles and elite status benefits. The cards carry hefty annual fees up to $600, but offer perks like free checked bags, companion tickets, and annual elite mile waivers. Yet these cards could become less rewarding under new merchant fee rules.
Airlines face a revenue crunch as banks scale back lucrative card deals. Chase already cut rewards for its popular United cards, and more airlines will likely follow suit. The culprit is slashed merchant fees – what Visa and Mastercard charge retailers on credit card transactions.
New fee limits mandated by Visa and Mastercard squeeze bank profits from card spending. So banks must pass the pain along through scaled-back rewards and higher annual fees. Ultimately, free-spending frequent flyers will pay the price through less generous cards.
Besides shriveling rewards, higher fees disproportionately hit road warriors already paying up for premium airline cards. Consider elite flyers like Chris, a marketing director and United 1K member: “I've had the United Club Card for years, but the new $650 fee is just too steep when the lounge access and other benefits are getting cut back."
Unfortunately for airlines, these lucrative cardholder spenders have options when fees get out of hand. Brian, a software exec and American Airlines Executive Platinum, already cancelled one card: "I switched my everyday spending to a Capital One card with better rewards and no annual fee."
If other elites follow, airlines would lose access to billions in spending along with customer data and brand reinforcement from card use. Early metrics show erosion, with JPMorgan Chase reporting a 10% drop in co-branded airline card spending.
Frequent Fliers Cry Foul Over Credit Card Reform - Elite Status Gets Harder to Earn
For road warriors who lived in the skies, elite status was once a badge of honor flaunted at every opportunity. Attaining top-tier levels required sacrificing weekends and holidays to marathon through flight segments year after year. But now that a decade of mergers has consolidated airlines, reduced competition has allowed carriers to chip away at the generous benefits and relaxed requirements that once defined elite membership.
Like shifting sands, the qualifications keep getting raised higher. Keith, a consulting exec and lifetime Platinum on American, has felt the goalposts move: “When I started traveling, Platinum status was 25,000 miles. Now it’s 50,000 with a $6,000 spending hurdle. They keep the name but keep cheapening what it means.”
Even lifetime elites aren’t immune as airlines squeeze more spending from their patrons. FlyerTalk members grumble over losing perks like United’s Global ServicesHelp Desk, American’s systemwide upgrades, or Delta’s Rollover Medallion Qualification Miles. For decades-long elites, these broken promises feel like a betrayal.
But as profits get leaner, airlines have realized elite flyers will endure more hoop-jumping to cling onto status. A management consultant and Delta Diamond Medallion for 8 years defends this treadmill: “I used to just fly a lot for work to qualify each year. Now I take extra trips at the end of December to re-earn status. They know I’m hooked.”
Once an exclusive club, now nearly all elites must endlessly run just to stand still as airlines ratchet up requirements and add new spending hurdles. Keith summed it up: "I get that they need revenue, but loyal customers shouldn't have to keep paying more every year just to keep the status we worked so hard for." And with large employers cutting travel budgets, even devout road warriors are struggling to stay airborne.
Of course, some elites chalk up the tighter rules to sour grapes: “Medallion status just doesn’t mean as much with so many members nowadays,” remarks Martin, a Diamond Medallion on Delta for 17 years. “I enjoyed the glory days too but understand change is inevitable.” Yet change feels punitive to those who sacrificed family time for elite status now stripped of its former prestige.
Frequent Fliers Cry Foul Over Credit Card Reform - Devaluations Could Backfire on Carriers
Loyal flyers put up with a lot for their precious elite status - early morning flights, inconvenient connections, long hours alone in sterile airport lounges. But even the most devoted road warriors have a breaking point. And by constantly devaluing elite rewards to wring out more revenue, airlines may be pushing some of their best customers past that threshold.
Fliers like Alex, an auditor and lifetime Gold member on American, feel stretched thin by the never-ending constraints. “The struggles to requalify each year, flying on inconvenient Basic Economy fares, and paying hundreds in fees has me questioning if loyalty still earns any perks.” After an airport agent denied his request for an upgrade, he’s now flying more with Delta where he holds Silver status.
Airlines bank on the grip of status to retain elites despite worsening terms. But Delta Diamond Michael now splits flights between Delta and United. He explains, "By diluting benefits for Diamonds and making requalification a challenge, Delta has given me reasons to explore options." Even entrenched loyalty cracks when rewards continuously shrink.
Cheap cash fares from budget carriers and fixed-value point options like Chase Ultimate Rewards give elites viable alternatives too. Tech consultant and United 1K elite Jeremy admits, "Award sweet spots made me loyal, but now I'm tempted to just buy whatever flight is cheapest without the hassle of chasing status."
And when elite benefits slip, credit cards emerge as the better bargain. Karen, an executive Platinum on American for over a decade, dawned that reality: "The Admirals Club access and free bags from my Citibank card might still make it worthwhile even if I'm downgraded from Platinum status."
This should concern airlines that leverage status to spur spending. Research shows elites fly more annual trips and spend significantly more than regular flyers. If they defect, airlines lose their highest margin customers.
Plus, alienating once loyal veterans fuels negative word-of-mouth. Delta elites carping in online forums about program downgrades provide visible ammunition to the competition. United Premier elites like Darren help them fire those shots: "I warn colleagues who rave about United's routes to avoid chasing status. The goalposts just move further away every year."
Frequent Fliers Cry Foul Over Credit Card Reform - Travelers May Take Business Elsewhere
As airline loyalty programs continue to devalue benefits, many frustrated elite flyers are taking their business elsewhere. Road warriors who once zealously committed to a single carrier now report shifting trips to competitors or alternatives. For airlines that rely heavily on revenue from top-tier elites, this customer migration signals a worrisome trend.
Stuart, an executive and lifelong Platinum member on Delta, describes his growing disillusionment: “I used to book Delta first no matter what. Now I run searches on Google Flights to find the best deal. Loyalty seems foolish when benefits keep declining.” Others echo a similar refrain, admitting they actively court offers from rival airlines after feeling unappreciated by years of loyalty.
Anger over elite benefit cuts is driving this infidelity. Karen, a marketing VP and United Premier 1K for over a decade, vents her frustration: “Premier upgrades used to clear almost every flight. Now I'm lucky to get upgraded twice a year. So I might as well take the $59 Wow Air fare instead of struggling to requalify on United."
Even entrenched status can't retain some defectors. Michael, an engineer and longtime Platinum Medallion on Delta, explains his new approach: "Downgraded upgrades and more MQM [Medallion Qualification Miles] required to requalify forced me to adopt a multi-airline strategy. Now I mix in United flights and use points for first class tickets." Discontented elites like Michael execute the ultimate revenge by withholding loyalty altogether.
This should scare airline executives who know the disproportionate value of heavy-spending elites. A 2010 J.D. Power survey found elites fly an average of more than twice as many trips annually compared to non-elites. And these VIPs pay higher fares, with elites spending an average of $1,425 per ticket. When elite flyers divert trips elsewhere, airlines take a big revenue hit.
That migration may already be underway. JPMorgan Chase reports a 10% spending decline by co-branded airline credit cardholders. An exec of a major hotel chain confided they are picking up bookings from elite flyers through bonus point promotions. Even with ample inertia, airlines can only tighten the vise so far before loyalty snaps.
Alienated elites also amplify their displeasure by discouraging others from chasing status. Darren, an accountant and longtime Premier 1K on United said: “I tell colleagues not to waste money or vacation days chasing upgrades United won't honor." Such negative word-of-mouth provides airlines' competitors free advertising.
Frequent Fliers Cry Foul Over Credit Card Reform - Alternatives Emerging in Hotel and Dining Programs
As airline elite status grows increasingly difficult to obtain and less rewarding to possess, many road warriors are exploring alternatives to airline loyalty programs. Hotel chains and dining rewards programs are prime beneficiaries, picking up business from disgruntled frequent flyers.
Hotel programs offer a compelling value proposition to regular travelers. Unlike airlines, hotels have been reluctant to restrict award availability or add blackout dates. Redeeming points for free nights is thus simpler compared to the effort required to find saver award seats on planes. Michael, an accountant and Marriott Titanium Elite, highlights this contrast: "With Marriott, I can usually book my preferred hotel for vacations by redeeming points. Trying to use miles for peak airline routes is frustrating with chronically sparse award availability."
Hotel status also proves easier to earn and retain than airline elite tiers, thanks to generous promotions. Karen, an exec, hit Marriott Platinum fast via work trips and promotions, scoring lounge access and suite upgrades not offered by her Delta status. "The recognition from hotels feels more meaningful than my SkyMiles number," she remarks. "Marriott treats me like a valued guest, not just a revenue source."
Dining programs offer another alternative for regular travelers to earn rewards during business trips or vacations. Paul, a consultant, accrues valuable Chase Ultimate Rewards points not tied to any airline: "Just by using my Sapphire Reserve card at restaurants, I can redeem points for any flight I want."
Freed from chasing elite status on a single airline, some frequent flyers find dining programs more rewarding given today's dynamic flight offerings. Jeremy, an engineer, explains: "I used to suffer through United flights just to requalify for status. Now I pick the best fare and use dining points to book awards."