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Airline perks and elite status might be harder to earn this yr

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The brand new Delta SkyClub at Los Angeles International Airport (LAX), Terminals 2 and three where the reimagined state-of-the-art facilities will soon welcome hundreds of thousands of guests every year.

Media News Group | Long Beach Press-Telegram via Getty Images

When United Airlines gate agents call the primary boarding group, Ted Cohen notices something he never saw in his many years crossing the globe as a music industry executive: crowds.

The “preboarding” group includes members of United Global Services, an invitation-only status for top customers, and United Premier 1K, an upper-level tier within the airline’s Mileage Plus frequent flyer program.

“It was once two or three people, and also you used to say, ‘Who’s that?’ And now it is a small army,” said Cohen, who leads a digital entertainment consulting firm and has lifetime elite status on United and American Airlines.

Welcome to air travel’s era of mass luxury.

Travelers willing to shell out more for tickets and popular rewards bank cards are swelling ranks in front cabins and airport lounges. Now airlines are attempting to handle the surge of huge spenders — without compromising the appeal of their lucrative loyalty programs and costliest seats. This yr, not everyone will make the cut.

The biggest U.S. 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.

Executives say the richer requirements are the product of the pandemic. Airlines had prolonged frequent flyer status without requiring travelers to satisfy the standard annual thresholds because would-be passengers were sidelined. Within the meantime, customers kept spending on their rewards bank cards, racking up points and perks along the way in which.

“We feel like we’re royals although we’re not wealthy in any respect,” said Damaris Osorio, a 27-year-old based in Recent York who runs a vintage clothing business.

Osorio frequents airport lounges on trips booked with rewards points that she earned through strategic bank card use and sign-up bonuses. Last yr she and her fiance traveled to Brazil, Chile, Argentina and Italy, all on flights she paid for with points.

She said she cares little about sitting within the front of the plane, but has a preference for the American Express Centurion Lounges, which she gets into with one in all her Amex cards. Osorio realizes she’s not alone.

“You notice how much busier it’s getting on the lounges,” she said. “I’m going as early as possible to maximise what I’m taking away.”

Next month, Amex Platinum cardholders might be charged $50 for every guest they convey to a Centurion Lounge. Those cardholders can currently herald two guests without cost.

‘If everyone seems to be special, nobody feels special’

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

Airlines’ lucrative bank card partnerships helped them stay afloat within the pandemic. They sell miles to bank card firms, and bringing in billions of dollars.

Now they’ve loads of travelers itching to money in rewards.

In the event that they call biz class boarding and it’s like the beginning of the Indy 500 … it isn’t going to be a pleasing experience.

Henry Harteveldt

founding father of Atmosphere Research Group

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

After some customers complained about crowds and long lines at its Sky Club airport lounges, Delta said late last yr that it is going to raise the costs and the necessities to achieve access to those facilities. Earlier in 2022, it also instituted a three-hour closing date for lounge use and created a VIP line for high-status holders.

CEO Ed Bastian said recent policy changes aim to handle pandemic-era status extensions and the rise of consumers spending more for travel.

“We have got to handle that in some technique to be fair to everybody, because as they are saying, ‘If everyone’s special, nobody feels special,'” Bastian said in an interview last month. “We’re attempting to do it in a good way.”

United’s chief customer officer, Linda Jojo, put it similarly at a recent industry conference. “If everybody has status then no person has status,” she said.

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

United also opened a latest mini-lounge at its hub at Denver International Airport, catering to customers on the go who’re flying on regional feeder jets, a move that would help liberate space in larger facilities for travelers hanging out longer.

United Airlines Polaris lounge at Newark Liberty International Airport

Leslie Josephs | CNBC

Last month, American Airlines said customers could have to spend or fly more to achieve the bottom elite tier in its AAdvantage frequent flyer program. Customers will soon need 40,000 so-called loyalty points as an alternative of 30,000 for Gold status.

Larger space for giant spenders

Delta, American, United and American Express have been opening larger airport lounges to suit more travelers.

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

“There’s an incredible demand for it, and we got to be sure that that we’re taking good care of customers how they need to be taken care of,” American Airlines CEO Robert Isom said on the JFK lounge opening.

Several full-service carriers have also moved away from long-haul top quality cabins in favor of more premium economy seats — in between business-class and standard coach seats — and bigger business-class cabins that fit scores of travelers, particularly on long flights.

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

A latest American Airlines and British Airways lounge at John F. Kennedy International Airport, November 29, 2022.

Leslie Josephs | CNBC

American Airlines is planning to eliminate a separate top quality on some older planes used to fly longer routes in favor of a single, expanded, business class featuring latest suites with doors.

The airline said premium seats on its long-haul fleet will increase by greater than 45% by 2026.

But with the expansion of that cabin comes the chance of diluting the premium feel, said Henry Harteveldt, a former airline executive and founding father of Atmosphere Research Group.

“In the event that they call biz class boarding and it’s like the beginning of the Indy 500 and you’ve 70 people jostling to get down the jet bridge, it isn’t going to be a pleasing experience,” he said.

‘I do not sit behind the wing’

With demand still strong, redeeming miles for flights this yr may cost a little more.

Michael Calarco, a part-time consultant who helps travelers book trips with their rewards points, said it has been harder to seek out seats these days because planes are flying so full after travel restrictions lifted, including to international destinations.

He recommends flyers be as flexible as possible with their dates in the event that they need to money of their points for a visit, and to avoid major holidays.

“There’s not much I can do if someone desires to go to the Maldives two months away,” he said.

Some travelers say comfort is price cashing in chunks of the points they have been sitting on.

“I do not sit behind the wing,” said Mark Ophaug, 40, who works at an academic technology company and has a top-tier status with United’s Mileage Plus program. He and his husband are planning to go to his in-laws in Buenos Aires this yr and plan to make use of United PlusPoints to upgrade to lie-flat seats.

“It’s a protracted flight, and I would like to lie down,” Ophaug said.

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