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To Be Elite Or Not To Be, That Is The Question

Chasing Elite Status

As it is a brand new year, I have gotten a few emails from Readers asking about how to achieve Elite Status and if it is worth it. Elite Status is kind of a tricky subject, so I thought I would try an break it down for people who are unfamiliar with it.

As most of you know, the qualification period for Elite Status resets every January 1st. This means that to earn or re-qualify for Elite Status for NEXT year, you have from January 1, 2013 – December 31, 2013 to rack up as many Elite Qualifying Miles (EQM) as you can.

Elite Qualifying Miles are the miles you earn for actually flying on Revenue (Paid) Fares. You can almost only earn these Miles by putting your Butt In The Seat and flying (hence why they are also called Butt In Seat (BIS) Miles. Miles earned from Credit Card Sign Up Bonuses and Award Tickets DO NOT count towards your EQM balance.

Depending on when you achieve Elite Status this coming year, you will have the Elite Status for the rest of this year, as well as all of next year.

So if you fly 25,000 Elite Qualifying Miles on United by May 2013, you will have earned Premier Silver Status on United from May 2013 (the date when you crossed the 25,000 Mile threshold) to January 1, 2014.

Hence why it is advantageous if you are thinking about earning or re-qualifying for Elite Status, to start as early in the new year as possible. This way your new Elite Status will count for the rest of this year and all of the following year.

My Status

Although I run a Frequent Flying Blog, surprisingly I don’t have any Airline Elite Status. The past few months, I have been toying with the idea of trying to achieve Top Tier Elite Status with United or American Airlines by flying 100,000 Miles in 2013.

I fly 99% for fun, so achieving Elite Status would have to be all done on my personal time and dime.

I have had Elite Status 1 time in my life, and it was in 2009 – 2010, when I flew 25k Paid Miles on United going to Australia and Europe, thus earning United Premier Silver Status. This was pre-Continental/United merger, so even with the lowest level Elite Status, I always got United Economy Plus Upgrades, which was awesome and good enough for me.

While the benefits of Top Tier Elite Status (100k+ BIS Miles a Year) are compelling and include free bags, priority check in, upgrades, lounge access, dedicated phone line, increased earning ratio, etc, the more and more I thought about it, I realized I already have 95% of the most important benefits that Elite Flyers recieve without ever having to endure flying 100,000 Miles.

Cost & Time vs Value

Basically earning Elite Status without having to travel for work comes down to how much you value your Time & Money, compared to the Benefits you are earning.

To earn Top Tier Elite Status, you can expect to spend around $4,000+ out of pocket.

That is a rough estimate because it all depends on where you fly to and how much it costs, as well as how many tricks you implement to maximize your mileage.

But basically, if you did only Domestic Flights from say New York to Los Angeles which is a 6hr 30min flight each way, you would earn 2,475 EQM each way. The current price for an Economy ticket on United is $325 Roundtrip.

At 4,950 EQM Roundtrip, to hit 100,000 BIS Miles, you would have to fly that route 20 TIMES! In the process at 13 hours Roundtrip (assuming a quick turnaround), you would be spending 260 Hours in the air (or the equivalent of 10 Days in the air).

Not to mention that 20 Trips X $325 = $6,500.

Of course, there are tons of tips and tricks to increase your EQMs earned on 1 flight through crazy routings, doing an Elite Status Challenge, or taking advantage of Airline Double and Triple EQM promotions, but even then it still isn’t cheap or time efficient.

I met someone at the SMD4 who took advantage of American Airlines Triple EQM Promotion last year, for flights to/from California & Illinois. Basically for every mile he flew, he would earn 3 EQM instead of the normal 1 EQM.

Even with that promotion, he still had to do 8 San Francisco – Chicago flights (2 flight each day), over 2 weekends (96 Hours), and still spent around $2,000.

The Perks

Obviously no one would fly 100,000 Butt In Seat Miles if there weren’t any benefits, so lets see what 100,000 Miles (Executive Platinum) on American Airlines gets you. Chart below is from FlyerGuide.

The list of benefits is pretty impressive but when you break down the features, it is really amazing what benefits you can get without flying.

Benefits You Can Easily Get

  • Lounge Access – If you are really interested in Lounge Access, the AMEX Platinum Card gets you Lounge Access to AA & US Airways lounge as well as numerous International Lounges. Although there is a $450 Annual Fee, using the $200 Gift Certificate trick, you basically are paying $50 for the Card.
  • Expedited Security – This is probably one of the best features of Elite Status. The funny thing is that if you pay $100 for TSA Pre-Check (Good for 5 years), you actually get access to an even shorter dedicated TSA Pre-Check line. All the past few times I have flown out of O’Hare, I have done TSA Pre-Check and there was NO ONE in line, and the United Elite Line had about 30 people in line waiting. You can honestly clear Security in less than 1 minute!
  • Free Checked Baggage – This is a particularly useful feature if you are a heavy packer or travel with your family but thanks to Credit Cards, almost all of the major Airline Credit Cards now give you free checked bags if you buy your ticket with their Credit Card. This can save you up to $50 per a bag round-trip, plus you will earn miles on your Flight purchase.
  • Dedicated Phone Line – I think it is a universal feeling of dread when you try to call into an Airline, and they put you through the phone tree, and then after waiting 25 minutes, you are patched through to an outsourced Call Center Agent who sounds like they are taking the call over Skype in a wind-tunnel. Elite Members do get their own dedicated phone number to call, but a little known secret is you can almost instantly get through to an Agent if you just call their International Offices via Skype. I call United’s UK or Australia office all the time when I don’t want to deal with waiting for the US Call Center. Best part is via Skype, it is only like 1 cent a minute.

Things You Don’t Get

  • Upgrades – In terms of Dollar value, upgrades are the most valuable Elite Benefit. In addition to the free Domestic Upgrades that Elite Members get, Top Tier Status holders also get System Wide Upgrades (SWUs) to use on International Flights. AA Executive Platinum members get 8 System Wide Upgrades that they can use on any fare. So if you are an Executive Platinum, you can buy a cheap $800 Economy Ticket to Europe, and then you your free SWUs to upgrade to a Business Class seat worth $6,000+! This is obviously an amazing benefit and the main reason most people go for Top Tier Elite Status! A little known fact that I learned at FTU LAX & Chicago Seminars, is that you can actually buy these SWUs on Flyertalk’s Coupon Connection for around $300 – $400.
  • Change Fees / Close-In Ticketing Fees – Both these fees are absolutely ridiculous and a blatant attempt to get money from Customers. I have written many times about how annoying these fees are. While Close-In Ticket Fees are hard to avoid, Change Fees can normally be avoided (especially on Award Tickets), by just claiming that there was a “Schedule Change”, and therefore you would like to cancel or change your ticket for free.
  • Increased Earning Ratio – As an incentive for flying more and to reward Elite Members loyalty, Airlines give Elite Members an added bonus in terms of Redeemable Miles (the type of Miles you can use to book Award Tickets), every time they fly. Although it depends on what Elite Tier you are, AA Executive Platinum Members earn a 100% Bonus for every mile they fly. So if they took a flight from New York to LA, they would earn 4,950 EQM but then they would also earn 4,950 Redeemable Miles + an additional 100% bonus of another 4,950 Redeemable Miles, so basically 9,990 Redeemable Miles that they can use towards a future Award Ticket! This is a really nice benefit, and is not really easy to replicate cheaply through any loopholes. However, as we have seen, you can earn 50,000 Redeemable Miles at a time just by signing up for 1 Credit Card, so I’d say that Increased Earning Ratios are only really useful if you fly a lot anyways.

Recap

So basically for anyone that does not travel for Business, I would recommend that you should save your money and time, and NOT go for Top Tier Elite Status. The only time I would suggest going for it, is if you have already flown a certain amount of miles and are in striking distance of the next tier.

Not everyone will agree with this (mostly people who have earned Top Tier Status for fun), but when you look at the numbers it is hard to justify in my opinion.

For 1/10th of the cost of trying to achieve Top Tier Elite Status, you can get 90% of the most valuable Elite benefits. The last 10% of benefits are things that are really only useful for Business Travelers such as Free Same Day Flight Changes and Guaranteed Last Minute Seat Availability.

To get Lounge Access, Expedited Security, & Free Checked Bags, I simply signed up for the AMEX Platinum ($450), Global Entry ($100), and the United MileagePlus Explorer (Free).

Although I don’t get Free Upgrades, when I do the math, it is far cheaper for me to buy the SWUs from Coupon Connection, or even just pay out of pocket for a Domestic Upgrade, then spend 260 Hours in the Air & $6,000 to achieve the same benefits.

The final thing I will say is something Bengali Mile Guru told me at FTU LAX. If your ultimate goal with Frequent Flyer Miles is to take Aspirational Trips in First Class (or Business Class), there aren’t any extra benefits (like getting a seat in the Cockpit or flying the Plane) that you will get for being a Top Tier Elite as compared to a normal First Class Passenger. You are already at the front of the plane in the best seats!

With earning Miles via Credit Cards being so easy, it personally makes more sense in my mind to apply for 3 Airline Credit Cards, earn 150,000 Miles and take a First Class flight as opposed to spend 10 days in a Plane and $5,000+ so you can achieve the exact same end result…

Curious to hear anyone else’s thoughts.

-Parag

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