Who are the elite? What are the elite programs offering their members? What do frequent flyers want? And what trends are we seeing?

American AAdvantage and United Mileage Plus are credited with introducing the first elite programs. The AAdvantage Gold program was launched in 1987 to the approximately top two percent of flyers and with a budget of only $100,000. United Mileage Plus was the first program to introduce qualification thresholds- an idea that has become the industry norm. Most programs won’t reveal membership numbers or the percentage of members who are elite. It’s interesting to note that American AAdvantage admits to an elite membership that is only five percent of the program’s total membership while United says that fifteen percent of their members are elite. To give you an idea of what an average program elite level membership looks like, we’ll dissect those of United before their most recent additions — 535,000 Premier members, 239,000 Premier Executives and 46,000 1K’s. It looks slightly different when you add in the Global Services and Premier Associate members but the ratio is about the same.

Along the way, thousands of frequent flyers have discovered the thrill of getting their first elite-level membership card in the mail. But has the gold tarnished? Have flyers and the programs who serve them become jaded? Yes, perhaps. But through all the changes and challenges, ups and downs, the final result is the same: Elite programs are there to reward and express thanks to the most loyal customers and those customers in turn express their thanks with loyalty and hard-earned cash going to their chosen airline.

For this article, we are examining the elite programs of frequent flyer programs only — we will examine the elite programs of hotel programs and others in a future issue of InsideFlyer.

Who are the elite?
To become an elite member in a frequent flyer program, most programs have imposed thresholds — those magic numbers set by the airlines where members are awarded different levels of membership based on how many miles the flyer has collected.

Collecting miles is not the only way to become elite. For years, elite members have been lured away by competing airlines. Airlines have been known to match the elite level of their competitors. And frequent flyers have been known to ask airlines to match their elite level.

We posed questions to the frequent flyers who post at FlyerTalk.com and found that they generally do not ask for a match unless they are truly interested in flying the airline that matches their elite level — they want to make the best of the match and only ask for it when they know that it will do them the most good. About 50 percent of our FlyerTalkers said that a frequent flyer program has matched their elite status (we should mention here that we suspect this number is probably higher for FlyerTalk members than the average member in the program because of the wealth of information found on FlyerTalk about getting your elite status matched). Just over 5 percent said that when they asked they were turned down, and about 43 percent said that they have never asked. Not all programs will match elite but most will consider the requests on an individual basis and make their decisions by whatever means they consider fair — their criteria are generally not published. And some airlines have been known to match elite only after a frequent flyer shows good faith by flying their airline a set number of times. For tips on getting a status match, see the master thread in the FlyerTalk forum Miles&Points MilesBuzz!.

Our FlyerTalk research revealed that of the elite members who responded to our questions, 46 percent are elite in one frequent flyer program, 31 percent in two, 15 percent in three and 8 percent in four or more. (Note that these are elite members in frequent flyer programs only — not hotel programs.)

The percentage of those who are lifetime members in their chosen program is just over 20 percent, but keep in mind that this number can be misleading since not all programs offer a lifetime membership level.

Over the years, the way in which members earn miles to reach elite has changed. In the beginning, if you flew and were awarded miles for your flights, all those miles would count toward elite status. That policy can only be viewed as the good old days for today’s frequent flyer. Today’s flyer knows all too well that it takes elite qualifying miles (EQM) or elite qualifying segments (EQS) to earn elite status. These miles are also sometimes called status miles. Elite qualifying miles can be tied into the class of service a person flies — where deeply discounted fares might get you miles, but not count toward elite status; or miles will not count toward elite if they were earned flying a partner airline or through car rentals and other partners or other variables determined by the programs in their Terms and Conditions.

The EQMs have led way to special promotions such as US Airways “Anything Counts” promotion at the end of last year when earning miles for purchasing items at the US Airways online shopping mall counted toward elite when normally those miles would not.

What are the elite programs offering their members?
Frequent flyer programs are constantly evolving their elite offerings based on finances, feedback from members and what other programs are offering. Perks of elite membership can include upgrades, lounge access, bonus miles with every flight, additional miles earned with credit card purchases, guaranteed seating, early boarding, waitlist priority, exclusive awards, waived fees, priority check-in, preferred seating, VIP treatment and exclusive award inventory tools to help members get those sometimes elusive free tickets. North American elite programs differ from international programs where lounge access is more common. And members appreciate different benefits depending on the airline and their elite membership level.

Years ago, a good number of the programs offered threshold bonuses when a member obtained a certain membership level, or a set number of miles as an elite member. In American AAdvantage or United Mileage Plus, a member could earn up to 75,000 bonus miles a year in this way and in Delta SkyMiles and US Airways Dividend miles, 50,000 bonus miles. But in the late 1990s, threshold bonuses started disappearing. American and United ended these bonuses in 1997, US Airways followed in 1998 and Continental and Northwest in 1999. One by one, the airlines stopped giving threshold bonuses until today only Air Canada Aeroplan and Alaska Airlines Mileage Plan of the programs we looked at for this article offer threshold bonuses.

Why did they disappear? A number of reasons, such as the growing popularity of mileage runs. More significantly, threshold bonuses disappeared with the advent of airline alliances, which saw high flyers accelerating their mileage accumulation because they were less likely to have miles spread over several accounts.

Let’s remember that before the threshold bonuses disappeared, the programs were already giving away elite flight bonuses, in some cases 150 percent of the mileage flown. With threshold bonuses, it was not uncommon for a typical elite member to earn 300 percent of the actual miles flown.

For instance, with the AAdvantage threshold bonuses, members could earn up to 75,000 additional miles. They earned a 10,000 mile bonus after flying 35,000 miles, then an additional 10,000 mile bonus for every 10,000 miles flown afterward (45, 55, 65, 75,000 mile levels) and then finally a 25,000 mile bonus when they reached 100,000 miles flown. And don’t forget the normal elite bonus of 25 to 100 percent for all miles flown. The traveler flying 100,000 miles actually earned 275,000 miles total and that was just from being an elite level member. With the growing international networks of their flights, the miles were growing to astronomical heights. Keep in mind that when frequent flyer programs were introduced in 1981, American and United did not fly internationally so earning 100,000 miles domestically was quite a feat.

Also of note at this time, elite status was obtained at lower levels. For instance, Continental OnePass elite levels were reached at 20, 35 and 50,000 miles, meaning that members were earning threshold and other bonuses at an earlier point. Today, OnePass elite levels are at 25, 50 and 75,000 miles.

Through the years, the airlines have struggled with how to acknowledge not only the most frequent flyers, but also the highest spenders. Delta has a fourth tier for it’s high-paying customers, what they call an “under the radar” tier for a subset of the airline’s highest revenue-generating customers. These members were recently contacted by Delta through the mail. As Jim Rausa, an IT Program Manager from Wayne, PA, who was one of the members chosen for the fourth tier said, “All in all, I thought this was a great gesture on Delta’s part! Definitely a very nice, unexpected but VERY appreciated holiday gift.” United’s Global Services memberships are also by invitation only to its best customers.

A few programs offer lifetime memberships for those customers who have racked up more than a million miles. United offers its one-million milers lifetime Premier Executive status (the airline’s second-tier elite level) while American offers its one-million milers Gold status (the airline’s lowest-tier elite level) for life and those achieving two or more million program miles are awarded AAdvantage Platinum status (the airline’s second out of three tiers). Delta goes a step further offering those members who reach four million or more Medallion Qualification Miles a lifetime Platinum Medallion status (Delta’s highest elite tier). One million milers get Silver Medallion status (the lowest tier) and two million milers get Gold Medallion status (the second tier). Additionally, every time a customer reaches a new level of Million Miler status, they receive an exclusive gift by Hartmann Luggage. These policies can change without notice. Of the larger programs, Continental Airlines, Northwest Airlines and US Airways do not offer lifetime status.

What do frequent flyers want?
Last year, InsideFlyer’s Freddie Award for the best elite-level program went to Alaska Mileage Plan with Continental OnePass following closely, and Southwest Airlines Rapid Rewards not far behind. What’s interesting about this is that Southwest does not have a true elite program as most of us think of one — their approach is quite different. Southwest offers the Companion Pass program in which members become Companion Pass Holders when they earn 100 credits in a 12-month period. Companion Pass Holders may designate a companion who can accompany the member on any flight for free. The member may change their designated companion up to three times during the 12-month validity period of the pass.

In our mind, this demonstrates that elite programs don’t have to offer a laundry list of perks as long as the perk(s) is truly worthwhile to the customer. Having said that, the laundry list of perks is valued and, yes, expected, by a vast number of frequent flyers.

We took a very unscientific poll of the vocal and experienced frequent flyers who frequent FlyerTalk.com to see what frequent flyers appreciate and want in their elite program and this is some of what we found:

Among perks, the ability to upgrade wins hands down. The bonus miles an elite-level member receives as a benefit on qualifying flights follows. These perks are almost universally offered by elite programs. Upgrades are seen as the ultimate perk for many frequent flyers — everyone wants them and there’s a great deal of frustration on the part of elite members when they see their upgrades disappearing or becoming harder to use. “Don’t Mess with Upgrades” could very well be the frequent flyer’s motto.

After those two time-honored favorites, the list is divided between many different perks including preferred seating (many mentioning they appreciate an Exit-row seat, probably from those who are a good bit above six feet tall), early boarding and priority check-in. Lounge access is surprisingly low on the list, but we suspect that’s not so much a reflection of travelers indifference to the perk but rather the limited availability of free access through the North American programs. We also found that what the members expect and appreciate changes as they move through the different status levels — makes sense — the more they fly, the more they want benefits that allow them to travel in comfort. Kevin Hartmann of Dallas, who is an Executive Platinum in American AAdvantage echoed the thoughts of many of his fellow frequent flyers on FlyerTalk. When asked what he would ask the managers of his favorite frequent flyer program, he said. “If I could ask them one question, let it be this: I know that you are running a business, and the bottom line ultimately is important. To the business traveler, the experience of travel becomes a large part of life, and we endure in the hope that our loyalty will be rewarded by some comfort and respect. My question to them is how can you make 150,000 miles a year more comfortable and respectable, so that we do not defect to a career that will require no travel at all?”

Members of several programs mentioned that their favorite perk as an elite member is the general feeling of better service — that special VIP feeling that only comes with being elite.

As far as a wish list for members, other than the usual suspects of more/better upgrades, quite a few members of several programs would like to see one-way award options. As one flyer explained, there’s a large market of cruise passengers who would appreciate the flexibility.

Looking at the responses from members of the various programs, we put together the following list of “Have and most appreciate” and “Want.” We thank all the FlyerTalker members who gave us their opinion. Generally, the listings below list the most popular responses toward the top. We are not able to list all the responses here and have edited for clarity. For a full list, and to see the ongoing posts, see the FlyerTalk.com postings under the various frequent flyer program headings and search for the subject line “Elite-Level Members: Please Answer.”

Air Canada Aeroplan
Have and most appreciate: