You can debate how it will play out, but Bubba's post is right about where the airline mentality is heading. As the airlines merge and capacity is reduced while the economy slowly picks up and demand picks up, the remaining airlines will have far more control over the market and far less of a need to "compete". This is simple supply & demand at work. The airlines won't have to have offer as many perks to sell the seats because there will be fewer seats. The airlines are banking on the fact that if they don't fill those seats with current elites, they'll still fill those seats with other passengers and those passengers may be paying additional revenue for perks the elites are receiving for status right now. It will be interesting over the next couple years to see how that strategy plays out but right now, the major airlines are believing they can cut their low revenue elites and focus on the high revenue elites, while still selling those seats to either 1) the used to be elites who are no longer elites due to not meeting new qualifications or 2) other passengers who still need to fly. After all, why does DL care if it sells that seat to an elite or to a non-elite? All they ultimately care about is selling the seat. The elite perks help entice passengers to consider one airline over the others when choosing airlines, but the reality is now the airlines can be more selective as the economy improves, demand picks up, and yet capacity is reduced.

The consumer loves capitalism when it benefits the consumer, but hates it when it benefits the provider. That's what we're seeing here. When the economy took a dump, the airlines began offloading freebies to attract any business they could. I was able to take advantage of it and it helped me reach elite status for the first time. Now the economy is improving and the airlines don't have to give away as many freebies to fill the seats. Ultimately, airline loyalty programs are merely "marketing programs" under the guise of a "loyalty" program.