Miles to go: tracking the super-elite business traveler

 

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Once a month, Intel architect Conor Cahill commutes from his home outside Washington, D.C. to Intel’s Oregon campus. He makes quarterly trips to Europe and Asia to represent Intel in a global alliance, and regular visits to Shanghai for meetings with his development team. He easily racks up 175,000 to 250,000 miles a year.

Cahill represents the new face of business travel. In today’s global economy, far-flung factories, offices, and customers require employees to take longer, more frequent trips to remote destinations. “These days, your team can be scattered all over the world,” Cahill says. “It’s just understood that you’ll spend more time traveling.”  Data from the National Business Travel Association indicates that business travel is on pace to meet 2000′s record level, and that an increasing number of corporate travel managers find themselves booking international itineraries for their clients.

This new generation of extreme business travelers depends on priority preboarding, dedicated security lines, and other perks, and will often purchase unrestricted coach or business-class tickets to ensure that they get them. They’re savvy about the airlines they fly (“I know every type of United plane inside and out,” says Cahill), and they’re fiercely loyal to those that understand and meet their needs. Having ceded large portions of the discount market to low-fare carriers, network airlines are working overtime to superserve these most frequent – and lucrative – customers.

Welcome to the Club
Webflyer.com estimates that over 180,000,000 passengers are enrolled in frequent-flyer programs, a number growing by 11 percent annually. Over 307,000 of them have earned a million or more miles in their program (Delta says its top passenger is at over 10 million), and the airlines have taken note. “Thanking their million milers is one way for airlines to build loyalty,” says Forrester Research’s Henry Harteveldt. Many airlines offer their million milers what Harteveldt calls “soft touch” perks, including luggage, tickets to sporting events, and certificates of recognition.

But the best of the million-mile programs provide lifetime elite status. American Airlines AAdvantage members who earn one million miles, for example, are granted lifetime membership in the program’s Gold Elite tier—two million miles gets them eternal Platinum status. Delta, United, Singapore, and Air France-KLM have similar programs, and LAN has a program in development. “We will continue to do everything we can to accommodate our preferred passengers,” says Carlos Roman, LAN’s Marketing Director for North/Central America and Asia. “We want to retain the special customers we have and to grow this list.”

But only American allows miles earned through credit cards and other partners to be counted towards million-mile lifetime elite status. Omar Shahine, a Microsoft engineer, supplemented the miles he flew each year by charging all of his personal expenses to his Citibank AAdvantage credit card, and enrolling in a partner program that yielded five miles for every dollar spent at certain restaurants. “Once I did that, the miles started piling up,” says Shahine, who reached the million-mile mark in late 2005, and is now a lifetime AAdvantage Gold elite. “There’s now no reason for me to fly United, ever.”

While a lifetime of Gold or Platinum elite status never hurt anyone, Harteveldt says it doesn’t carry the weight it used to. “Planes are fuller, and more passengers are competing for premium seats,” he explains. “Gold or even Platinum doesn’t necessarily guarantee an upgrade these days.” Dennis Cheung, an American Airlines Platinum elite, agrees. “It’s definitely more of a challenge,” he says of redeeming upgrades. “The preboarding is a great benefit, but the upgrades are so tough to use that they’ve lost much of their value.”

Upping the Ante
Several airlines extend “super elite” programs to their most loyal passengers. Malaysia Airlines’ Enrich frequent flier program includes a Platinum tier that requires 450,000 miles over three calendar years for entry, and 100,000 a year to maintain membership. Members of this exclusive club (only 330 Enrich members have reached Platinum) enjoy priority check-in and boarding, an excess baggage allowance, and use of Malaysia’s famed Golden Lounges. The sumptuous Kuala Lumpur lounge offers a hot noodle counter, business center, sauna, massage, and for golf fans, a putting green. A special suite within the Golden Lounge – reserved for Platinum passengers – includes a private shower room, home theater-style entertainment system, and fine dining. Malaysia’s Platinum passengers are also assigned a personal escort from the time they check in until they board their flight.

Lufthansa’s HON Circle (the name comes from the honor pin Lufthansa used to give its top passengers) is open to those who fly at least 600,000 miles over two calendar years on Lufthansa or select partner airlines. HON Circle members receive top-level (Senator) Miles & More benefits, including priority waitlisting and baggage handling, first-class check-in, upgrade vouchers, and bonus miles. But they also enjoy personalized assistance at key airports, and access to Lufthansa’s first-class lounges and first-class terminal at Frankfurt, regardless of class of travel.

“We needed to add services that support a road warrior’s decision to fly Lufthansa,” says Don Bunkenburg, the airline’s Director of Corporate Sales. “And our premium passengers told us that on the ground was where things needed the most improvement.”

“We’ve had passengers land in Frankfurt and ask us to find them a special variety of cheese before they return to New York,” adds Lufthansa’s Jennifer Urbaniak. “And we’ve been known to put passengers who missed a connection on a helicopter to their final destination. Whatever they need, we really try to deliver it.”

It’s an attitude echoed by Ken Bright, VP of U.S. Marketing for Singapore Airlines. “Our elite passengers typically lead very busy and complicated lives,” he says. “Everything we do focuses on making their travel experience as effortless as possible.” Emirates Senior VP of Commercial Operations, Nigel Page, agrees. “Our passengers want fast flights and hassle-free connections, which is why we’re focusing on innovations like in-flight WiFi and
laptop chargers, and eventually, in-flight cell phone service.”

When it comes to delivering for their best customers, some airlines say that smaller is better. “We offer all the services of Star Alliance, but are small enough that we know our best passengers on a first-name basis,” says Roger Poulton, Air New Zealand’s VP of the Americas. While the airline doesn’t offer a program exclusively for top-level elites, employees make recognizing top customers a priority. “Everyone here—from the captain
to the lounge manager – knows them by name,” says Poulton, who is known to personally greet top passengers when they arrive at LAX, showing them what he calls “Kiwi friendliness.”

Secret Society
In 2003, United Airlines launched Global Services, an invitation-only program for its best customers. According to Conor Cahill, a two-year member, benefits include top priority for upgrade clearance, automatic re-booking in the event of delay or cancellation, preboarding with first class, and access to private customer service offices, special concierges, and United arrival facilities at certain airports.

For Cahill, the two biggest benefits of Global Services membership are top-of-the-list upgrades (he bumped up on 68 of his 70 United flights last year), and the peace of mind that comes with guaranteed personalized attention. “Global Services is all about hand-holding,” he says. “Whether they’re picking you up in a cart so you make your connection or giving you a place to shower after a long flight, they really take care of all the details.”

Continental Airlines has established a super-elite passenger category called Costars. According to Harteveldt, “it’s an example of very strategic and intelligent customer management.” The airline is tight-lipped about the benefits granted to members of this group, but Harteveldt claims Continental will go so far as arranging gates at hub airports so that Costars have the shortest walk for connections, and will sometimes compare the number of Costars on outbound flights to determine the order in which planes taxi to the runway.

Qantas and Delta also extend invitation-only programs to their best passengers, and Air France-KLM’s Club Petroleum is open exclusively to energy workers who fly oil and gas routes.

While Lufthansa makes no secret about HON Circle’s membership requirements, selection criteria for many of the invitation-only programs is shrouded in mystery. “My first year in Global Services, I had no idea how I had qualified,” says Cahill, adding that he recently received a letter from United saying he’d requalify by flying 50,000 miles or more in full-fare coach or higher. Continental will say only that it “measures its customers’ revenue contribution to the airline, showing special attention to those who spend a lot on Continental travel.” In previous interviews, Continental executives claimed that the airline’s top 10 percent of revenue generators become Costars.

At British Airways, membership in a new super-elite tier currently being tested will require nomination by the airline’s CEO or chairman. “Think heads of state or CEOs,” says BA’s Director of Relationship Marketing, Peter Schinasi. “People with the power to impact travel habits for large groups of people.”

Why all the secrecy? Partly to protect sensitive competitive information, but also to keep people guessing. “There’s a branding benefit to the mystery,” says Harteveldt. “It creates a certain mystique.”

The growth of these unpublicized, invitation-only programs underscores the airlines’ desire to reward passengers based on their revenue contribution. “Million-milers are sometimes actually relatively low-yield,” Harteveldt says. “These new programs recognize passengers based on the amount of money they spend.”

All Business
Several single-class airlines have recently launched to serve the elite-traveler market. U.K.-based Silverjet flies between London’s Luton Airport and New York/Newark, using Boeing 767s that have been reconfigured to seat a maximum of 100 passengers in a format the airline calls Silver Class. (A 767-400 is typically configured with 235 seats.) Passengers are treated to luxurious cabins with indirect lighting, premium liquors, cooked-to-order four-course meals, and roomy seats that convert to 75-inch lie-flat beds. On the ground at both Newark and Luton, Silverjet provides dedicated check-in and security facilities, and a lounge offering pre-departure snacks and light meals.

Eos, another all-business-class airline connecting New York and London (JFK to Stansted), flies 757s fitted with just 48 lie-flat seats. “We see ourselves delivering a lifestyle, not just a trip on an airplane,” says Roberto Lebron, the airline’s Director of Corporate Communications. “With 48 people on a flight instead of 400, we can give every passenger greater levels of personal space and individual attention.” Eos also provides passengers with a concierge to arrange ground transportation and reservations for hotels and restaurants.

Harteveldt says that while airlines are taking different approaches to rewarding their best passengers, they share a single goal.  “Customer loyalty is the name of the game,” he says. “Frequent fliers will stick with the airline that consistently provides services that go above and beyond.” For travelers like Cahill, who did not requalify for Global Services this year, living without those benefits can be a bitter pill to swallow. “I’ve really gotten used to the perks,” he says. “They won’t be easy to give up.”

 

[The following sections appeared as sidebars accompanying the main article]

Whatever it Takes
Whether gunning for the million-mile mark or simply hoping to requalify for elite status, some passengers go to extreme lengths to earn miles. Take Dennis Cheung, who makes connection detours to pad his balance—Baltimore to San Francisco via Miami for example, or San Francisco to Rome via Dallas and London. “The Rome trip was a vacation, and my girlfriend wanted to kill me,” he says, laughing.

Then there are the mileage runners, for whom acquiring miles is a sport—and an art. They scour the Web for cheap flights that will earn them maximum mileage, often hitting five or more cities in a single day, and posting messages in online forums with subjects like “UA: LAX-IND, $134 until May!” Marc Tacchi achieved something close to celebrity status among this group in 2005, when he flew 276 segments on Air Canada in 56 days, earning 1,003,625 miles. Mileage runners may not be a group the airlines covet (“Definitely not big revenue generators,” says Harteveldt), but there’s no denying their numbers—a mileage run message board on www.flyertalk.com contains over 175,000 posts.

First Class in Frankfurt
In 2004, Lufthansa opened a Frankfurt airport terminal exclusively for first-class and HON Circle customers. ( Emirates  pioneered the concept, opening a first- and business-class-only terminal in Dubai in 2002.) Passengers are met at Lufthansa’s terminal by a personal assistant who handles parking or rental car return, check in, and baggage handling. The facility features a special security area, top-of-the-line work and relaxation areas, gourmet dining, and chauffeured Porsches and Mercedes that bring passengers directly to their planes. Now that’s park-and-fly!

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