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It’s getting harder to cash in on frequent flyer points

American Airlines has said customers will have to spend or fly more to reach the lowest elite tier in its AAdvantage frequent flyer programme

Bermudians resuming their pre-pandemic lifestyle of travel may find more of their plans stranded on the runway as airlines begin raising the bar for travel perks, like lounge access and elite status.

With increasing demand, redeeming miles for flights this year might cost more. Award seats are harder to find because planes are flying so full after travel restrictions lifted, including to international destinations.

Travel professionals recommend flyers be as flexible as possible with their dates if they want to cash in their points for a trip, and to avoid major holidays.

The pre-boarding groups have become larger even at the highest level of rewards, with more travellers opening their wallets for premium tickets and popular rewards credit cards.

And now that they are swelling ranks in front cabins and airport lounges, airlines will seek to handle the surge, without compromising the appeal of their lucrative loyalty programmes and most expensive seats.

A CNBC article has pointed out how this year, not everyone will make the cut.

It says the largest US carriers – Delta Air Lines, American and United – are raising spending requirements to earn some elite frequent flyer tiers that grant free upgrades, early boarding, discounted or complimentary lounge memberships and other perks.

The airlines blame it on the pandemic, saying they extended frequent flyer status without requiring travellers to meet the usual annual thresholds, because would-be passengers were sidelined.

But customers kept spending on their rewards credit cards, racking up points and perks along the way.

People are cramming into the airlines’ private lounges, areas that were once a comfortable retreat for in-transit passengers from the rough and tumble of airports and mass travel.

The article states: “Next month, Amex Platinum cardholders will be charged $50 for each guest they bring to a Centurion Lounge. Those cardholders can currently bring in two guests for free.

“For the airlines, hordes of high spenders are a good problem to have two years after the pandemic drove them into a $35 billion hole, despite billions in taxpayer aid. Airlines are profitable again, with travel roaring back and flyers who are willing to pay up for a little bit more space or privacy on their trip.

“Airlines’ lucrative credit card partnerships helped them stay afloat in the pandemic. They sell miles to credit card companies, and bring in billions of dollars. Now, they have a lot of travellers itching to cash in rewards.”

Delta said in an investor presentation that premium products and non-ticket revenue will make up 57 per cent of its sales this year, up from 44 per cent in 2014 and 53 per cent in 2019, before the pandemic. That category includes revenue from top-end international business-class seats, extra-legroom seats and other sources, such as its partnership with American Express

After some customers complained about crowds and long lines at its Sky Club airport lounges, Delta said late last year that it will raise the prices and the requirements to gain access to those facilities. Earlier in 2022, it also instituted a three-hour time limit for lounge use and created a VIP line for high-status holders.

Recent policy changes aim to address pandemic-era status extensions and the rise of customers spending more for travel.

CEO Ed Bastian said: “We’ve got to address that in some way to be fair to everybody, because as they say, ‘If everyone’s special, no one feels special’. We’re trying to do it in a fair way.”

United’s chief customer officer, Linda Jojo, put it similarly at a recent industry conference. “If everybody has status then nobody has status,” she said.

In November, United said it was raising the requirements to earn status and perks.

Last month, American Airlines said customers will have to spend or fly more to reach the lowest elite tier in its AAdvantage frequent flyer programme. Customers will soon need 40,000 so-called loyalty points instead of 30,000 for Gold status.

Delta, American, United and American Express have been opening bigger airport lounges to fit more travellers.

American and its trans-Atlantic partner British Airways in November opened new, high-end lounges at John F. Kennedy International Airport with showers, bars and lots of workspace. The three lounges roughly double the square feet that American previously offered at JFK to about 65,000 square feet.

Several full-service carriers have also moved away from long-haul first class cabins in favour of more premium economy seats – in between business-class and standard coach seats – and larger business-class cabins that fit scores of travellers, particularly on long flights.

Many of the newer business-class seats are roomier and come with more amenities than first-class seats of the past.

American Airlines is planning to get rid of a separate first class on some older planes used to fly longer routes in favour of a single, expanded, business class featuring new suites with doors.

The airline said premium seats on its long-haul fleet will increase by more than 45 per cent by 2026.

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Published January 09, 2023 at 8:00 am (Updated January 10, 2023 at 12:14 pm)

It’s getting harder to cash in on frequent flyer points

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