Will FF programs add a 4th tier?
 

Randy,

I started thinking about this yesterday as I was on UA #6, a 767-200 from SFO to JFK. I upgraded to Business Class, which was completely full. The FA came around to take the dinner order. On United they generally ask in order of Mileage Plus status as indicated on the manifest. On this flight, there were so many 1K's in Business that not all of them got their choice of meal. (I'm only a 1P so I had no chance anyway). Granted that United can do a better job estimating demand for popular entrees - but that's a separate subject.

Flying 100,000 miles a year (or 100 segments) is certainly a lot of flying. But it seems that doing this and making a FF program's highest tier is increasingly commonplace judging by the number of top level elites that are on a given flight, especially out of a carrier's hub city.

U.S. based carriers generally seem to have standardized on a 3 tiered approach to elite membership. Even though there are differences between each program, tier status is generally granted based on flying 25,000, 50,000 or 100,000 miles in a calendar year. (I'm purposely ignoring Comps, Challenges, Revenue based status, etc.) I am assuming that this 3 tier model was implemented back in the 1980's when flying 100,000 miles was probably not as often an occurence as it is now.

Given that the airlines might have a good number of customers who fly in excess of 100K a year do you see potential for adding a fourth tier, say at 150k or 200k?

Maybe there is statistical evidence that most of the frequent-flyer "bell curve" is covered by 100k or less miles per year, but I've seen anecdotal evidence on Flyertalk of truly heavy flyers making top tier in one program, say by June, and then they direct their business to another carrier to build status in that program because there is nothing more to gain that year from the first carrier's program which they maxed out.

Just curious as to your take on this.

Thanks,
Drew

Here's Randy's response to this question from the 1/17 Chat.

Thanks, FlyByMike.

There was an article in the WSJ a couple of years ago about how airlines treat their ultra-high-mileage flyers. Bottom line: if you want a significant differentiation from 100K, you have to set the line at 200K or so. At that level there are few enough people that they get personal treatment with unadvertised benefits. They don't need a fourth formal tier with documented qualification criteria.

I have a friend here in ATL who is in the ultra catagory. Delta has given him a free trip with hotel to Bermuda and invited them to the suite at the Georgia Dome for concerts and games.

It's not just the flying, it is how much you spend.

I worked with a guy who flew about 100K a year, all at full fare. Delta treated him like a god. He once claimed he had a flight "un-cancelled" just by asking.

If they're smart they'll all go to revenue-based models like National.

i hope this NEVER happens, as i am a purely leisure traveler, and greatly enjoy my elite status. i realize that the full-fares are supporting the airlines financially, but i do have a fierce loyalty to give AA all my leisure travel dollars, and i think i deserve something for that.

ender83..... ditto

Technically speaking several airlines do have a higher/fourth tier in one form or another for their absolute best customers.

I suppose the problem with running the fourth tier this way is that prospective members (folks who could "quality" for the unwritten threshold if they put all their travel on a single airline, etc.) don't know what they'd get in exchange for what degree of loyalty. The rewards enjoyed by opus17's friend sound valuable to me -- enough so that, were I to be a 200K/year flier rather than a 100K/year flier, I might well stick with one airline all the time rather than switch between (say) two.

BUT, there's no way to know what rewards I'd get, no way to call them due if I feel shortchanged (like I'm not getting enough), and no way to sensibly value them as against the well-defined benefits of top-tier status in two different programs (eight VIPOWs plus six SWUs or whatever). That's a problem -- potentially a serious problem for those who (perhaps like me) value specific defined benefits more than the vague (though potentially also appealing) possibility of (literaly!) untold benefits down the road.

opus17's friend apparently probably never knew what he was going to get (in exchange for his ever-greater loyalty) until he got it. That's a lot to ask of a top-tier flier, it seems to me.

Why not just adjust the mileage level qualification at each or some of the three tiers?

I.e.. and I mean off just an example off the top of my head,

Lowest level keep at 25K
Mid tier 65K
Top tier 150K

or something, that will reduce the number of qualifying pax in each tier and in theory service should improve with less people to satisfy in each of the top two tiers

This suggestion for a higher tier should be called SUPERELITIST!

Someone in late 2000 or early 2001 was posting rumors of AA instituting higher qualification levels and a fourth tier. Of course, they had gotten the information for "reliable sources inside of AA."

The tiers they proposed were 30k, 60k, 90k and 120k.

Months later, after the original poster claimed the new levels were definitely going to be implemented (but of course were not) I brought the topic to the top, but strangely received no response from the original poster.

http://www.flyertalk.com/forum/Forum71/HTML/001344.html

d

I imagine this person's travel department (if it was a corporate type) ensured he knew what to expect. You can take care of your best customers in many subtle ways. Want to eat dinner at The French Laundry; wait a month or more. But, there are some (not celebs or politcos) who can call and get a table that evening. Just one example.

[This message has been edited by JeffS (edited 02-11-2002).]

The airlines well know who their best top tier fliers are, and they are rewarded accordingly. In all likelihood, had any of these been on your flight, they have been moved into the F cabin.

This past year saw such a drop off in flying during the final quarter that the airlines could not have made their "quotas" of fliers in each tier, thus most found various ways of keeping members at their 2001 status for 2002. Of all top tier elites, I suspect three-quarters would likely be within 10%-20% of the threshold, another another 15% likely at the 150K level, and at most 10% over 200K.

So it does not make sense, particularly now, to create a fourth tier. I think every program has had its share of thse rumours on FT. We had one going at the end of 2000 on the Air Canada forum, but it withered on the vine. This year, AC had to drop their qualification levels, and that was to maintain 70% of their 2001 levels of elites.

Just a quick interesting note here. If an airline, in my case UA, were to offer a 150k or 200k level (with published benefits), I could guarantee you that I would fly them more. Plain and simple. Now I see myself teetering around the 200k mark for '02 and am anxiously weighing the possibility of going for top tier on another carrier (AA). With the looming inevitibility of the Machinists strike at UA, this is seeming to be more likely.

Virgin offer a service for thier top 50 clients. It is done using thier tier points structure, and is geared to the people that commute in J from LHR-US each week. Only the top 50 are part of this program and while it is hinted at in the FF literature, no benifits are listed.

Being a V50 (as they are known) is a wonderful experience. When was the last time teh CEO invited you to dinner ?? Gave you a jump seat on a 747, or if you flying in the back the IFS invites you forward after meal service so you can get some sleep one the flat beds. Would I fly with any other airline - not if I can help it.

JonGar (ex V50)

JonGar, thanks for sharing this - very interesting.

I wonder if BA does something similar for those who "Commute" on the Concorde?

BA does have that "secret" Premier level, beyond the published top-tier BA Gold level, from what I've gathered on the BA board.

Here's what I gather from personal experience as one of those that tarvels more than 200K, mostly premium international.

When checking in, or on board nobody notices. When you call and need something and ask, they know who you are and become extra helpful. Although you may have to sometimes point it out. This DOES include a few special perks that keep you feeling appreciated.

Also, there is a model, at least being worked on (got this from the horses mouth) that will distinguish those of us that spend more money. Before anyone cries foul, think about this: Some qualify for a 100k level easily for $10,000. (20 x -$500 on transcons). I've had tickets that cost more than that for a single round trip and I fly overseas over twenty times a year.

And have we forgotten it's only been a few years that Executive Platinum at AA has been public. It used to be the secret Top Platinum.

In 97, 97 & 98 DL treated me like a star! Once in a while upgrades as a thank you and dinner at least 3 times a year plus a show (all via the local sales office.)

This was great, but not enough to offset SGB gone mad in 99 and 2000.