Beginner’s Guide to Elite Status, Example: American Airlines

Hi All,

I recently discovered a love for travel and have been able to enjoy many trips such as one to China, France/Switzerland, and an upcoming trip to Germany all with reasonable comfort and ease due to my elite status with American Airlines.  Now, you may think, how can you afford to have elite status with an airline or I though elite status was only for frequent travelers and those who have deep pockets?  Well I certainly don’t have deep pockets, but I do have a propensity to find good deals and understand the value of loyalty programs.

Today I’ll take you through a small example to understand how you can achieve elite status.  In a follow-up post, I’ll explain the different elite benefits that you can get and you’ll see how staying loyal to one airline can easily make your travel easier.  Now, I’m using American Airlines as an example, but most domestic carriers, Delta, United for example are very similar.

Enjoying a glass of Champagne and appetizer!

 First, we need to understand the concept of miles.  Everyone talks about miles.  I have this many miles on this airline and this many miles on this airline, and guess what, they’re probably all going to expire soon.  Well that’s what most of my friends who don’t travel say!  There are two important types of miles:  Redeemable Miles (RDMs) and Elite Qualifying Miles (EQMs).  For the purposes of getting elite status, only EQMs matter.  The RDMs are simply for you to use for those destination trips!  For each flight you take, you will get one EQM for every mile that you fly.  You will also get at least one RDM for each mile you fly, but you may get more for having Elite Status or buying an expensive ticket.

Secondly the concept of Elite Qualifying Points (EQPs), which is the airline’s way of incentivizing someone who spends a lot of money on flights, not your typical graduate student!  As you probably know, when you book an airline ticket, you book it for a certain fare class, First, Business, or Coach (which most of us book into).  However, within those fare classes there are fare buckets, which the airlines use to monitor how much revenue they are brining onto a flight.  For example when booking your ticket, you can simply click “Flight Details” and you’ll get something that pops up like this:

As you can see, the cheapest ticket will book into fare class “Q”, the second cheapest into “L” and the fully flexible ticket into “B”.  Now these are important to the airline because if you buy the more expensive tickets, they make more money!  So they incentivize you by giving you more EQPs.  For example, on our “Q” fare we’d only earn 872 EQPs (1745*0.5), on our “L” fare we’d earn 1745 EQPs (1745*1), and on our “B” fare we’d earn 2617 EQPs (1745*1.5).  Now most of us will not be qualifying on points, but I thought I’d put this here just for reference.

Cabin

Class

EQPs per mile

Coach

G, Q, N, O, S

0.5

Coach

H, K, M, L , W, V

1.0

Coach

B, Y, W

1.5

Business

D, I, J, R

1.5

First

A, F, P

1.5

Thirdly, the concept of Elite Qualifying Segments (EQS), is a way for the airline to monitor those frequent flyers who travel a lot of short trips.  Basically for each flight you will get one segment.  So a flight for LAX-DFW-ORD will give you 2 EQSs while LAX-ORD will only give you one EQS.

As you can see there are 3 segments of customers that the airline targets and ow that we’ve got that under our belts, we need to see how many EQMs, EQPs or EQSs  we need to get annually in order to maintain our elite status.  For American Airlines there are 3 Elite Statuses, Gold, Platinum, and Executive Platinum.

Elite Status

EQMs or EQPs

Segments

Gold

25,000

30

Platinum

50,000

60

Executive Platinum

100,000

100

As you can see it doesn’t matter if you’re a high value customer and earn via EQPs or a graduate student on cheap fares earning EQMs, status is status.  Now is there an optimal time to earn your status, the answer is yes-ish.  Each year you have to earn your status by flying the requisite number of EQMs, EQPs or EQSs.  The calendar runs from January 1 – December 31, the calendar year.  This will qualify you for the next year.  So your earned status in 2012 keeps you going for 2013 (and a little bit of 2014 see membership calendar below)  On December 31st if you only have 24,000 EQMs, unfortunately you won’t make gold.

January –> December

Once you cross one of the elite thresholds, you will instantly have that status and that status will last until the end of the membership year.  The membership year runs from March until February.  So, what’s the point?  Well if you were to qualify this year for a status you will  have that status throughout the next membership year.  So for example if you qualifying for Gold on November 2012, you will remain gold until February 2014!  Also if you qualify for Gold in the early part of the year, say by January 2013, you’ll remain gold until February 2015!

March –> February

Well I hope that helps everyone out!  I’ll explain what benefits you get from each status later.

Happy Distractions!

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