Airlines must renew their elite status again as of next year
Gary Leff at 20. March 2021.
Earlier, British Airways had extended the elite status by one year. Unlike American programs where each member’s status expires at the same time, each Executive Club member has a different current calendar year for their status, so some member statuses expire every month.
BA has just announced that for members whose year of eligibility is between 1 July and 31 December 2021, their status will be extended for a further 12 months. Some members extend their status until December 2022.
And if BA’s system is different from the US airlines, this move is a sign of that,
- Pandemic takes longer than expected, but hopes for vaccination are high
- Carriers were not aggressive enough in renewing their status or lowering status requirements earlier this year.
Traffic could be resumed from 2021. People get vaccinated, and the direction of the CDC always means more people sting and leave. However, this is not sufficient to avoid the need to renew the status.
- Business travel will not return to 2019 levels this year. Even if it comes back, it will come back slowly, in waves, not all at once. Some trips will be moved through the area, visiting customers will have to wait until the offices are fully open.
- If the number of business trips increases significantly again, this will happen later this year (probably in September). Companies don’t have to travel immediately, many have committed to working remotely by the end of the year, eliminating travel to central offices and the need for conventions and meetings (large meetings in poorly ventilated rooms).
- International travel will still be much more restricted than domestic travel. This means that most distances and the high cost of long-haul business class flights are simply out of the question.
Filling the planes with passengers once a year does not change the need to renew the status. And the 20% drop in revenue is not due to international restrictions and less business travel.
To the extent that airlines want to keep the customers who have been the most profitable in the past – to the extent that they are betting that high-margin business travel will return – they need to keep customers, not put them on the street.
Telling the top elite, who didn’t get 2021 status because their business journey doesn’t really start until the fall, that they are no longer valuable is a recipe for turning a once loyal customer into a free agent and sending them to a competitor.
However, the airlines will find this too early in the year. They still want to use the status as a carrot to promote the flights and encourage customers to choose them. This means you have a better chance of being promoted.
American AAdvantage is already exerting icy pressure on its members to sell them a promotion to elite status. Such actions and sales make it difficult to renew later. Will eligible miles and purchased dollars be refunded? Of course not, but those who fall in love will be bitter.
So it seems more likely that we’ll see a program like AADvantage that offers year-end shares and redemptions, or even possibly targeted year-end renewals rather than a blanket renewal for everyone.
However, it would be a mistake to let its members down by a lack of flights in 2021, when the airline believes that former valued customers are likely to be future valued customers who have a pandemic as their reason for not flying.
It’s a little different for hotels, because status is so easy to get this year, and Marriott is even effectively extending most statuses to those who also have personal and small business credit cards. It has lowered the qualifications, to the point that mattress management becomes attractive for status, rather than holding the line with slightly lower requirements as we have seen with the airlines.