Three-Way Alliance Is Good News for Mileage Mavens

Depending on whom you believe, the alliance among Continental, Delta, and Northwest, three of the United States’ “Big Six” airlines, is either the travel industry’s version of the axis of evil, or a giant step forward for all mankind—or at least that portion of mankind that travels by plane.

The very fact that three major carriers are working hand-in-hand, instead of competing hand-to-hand, gives rise to the axis of evil accusation. Cooperation, the argument goes, leads to collusion. And collusion means price fixing, which harms consumers.

The airlines themselves are sensitive to the charge, stressing that while they will cooperate in some areas, they will also continue to compete aggressively against each other. They even go so far as to include lower ticket prices on the long list of benefits claimed for the alliance—an assertion that flies in the face of rudimentary economics.

Whatever the downside may prove to be, there’s definitely an upside for consumers, especially the mileage-collecting and elite-seeking set. Benefits of the alliance include increased opportunities to earn and redeem miles, and potentially faster routes to elite status.

The basics of the CO-DL-NW commercial alliance

As finally approved by the Departments of Transportation and Justice (which indeed had concerns about the possibility of market domination and runaway prices), the principal ingredients of the alliance are as follows:

• Codeshare agreement
• Frequent flyer program co-participation
• Airport lounge sharing

The focus of this article is the mileage aspect of the alliance: what it is and how savvy travelers can make the most of it.

The mileage tie-up

Beginning July 15, each airline will become a full partner—a preferred partner, actually—in the frequent flyer programs of both of the other two airlines. (Certain aspects of the alliance, namely the reciprocal mile-earning and lounge-sharing opportunities, went into effect in mid-June.)

Read more about the three-way alliance

The three-way partnership means that members of Continental’s, Delta’s, and Northwest’s programs may earn miles for flights on any of the three airlines. They can also redeem their miles for award flights on all three carriers. The exceptions are that flights on Song, and Delta Connection flights operated by American Eagle, only earn miles in Delta’s program, and can only be requested as awards through Delta.

The most obvious benefits, and the ones that will be enjoyed by the most travelers, are the increased opportunities to earn miles, and the ability to take awards on the additional carriers.

Less obvious, perhaps, is the potential for more award-seat availability on the same flight, a benefit born of the alliance’s combination of codesharing and mileage program reciprocity.

Codesharing, briefly, is where two or more airlines sell seats on the same flight, which is operated by one of the codeshare partners. For example, a codeshare flight operated by Delta might have seats for sale as both Delta flight DL45 and as Northwest flight NW97. It’s an arrangement even travel agents find confusing.

Therefore, a SkyMiles member, for example, might find that there are no award seats available on her desired flight between Atlanta and Minneapolis, operated by Delta. But she might very well find available seats on the same flight, but listed as Northwest inventory, through the Delta-Northwest code share. And since Northwest is now a partner in SkyMiles, she would be able to redeem her Delta miles for the Northwest seat.

Multiplying elite benefits

Even less obvious and more complicated are the additional benefits associated with elite status.

Part of what makes this an alliance, rather than a simple tactical partnership, is the extent to which elite members of each airline’s program are now recognized and rewarded across the three-carrier network.

Elite members of the three airlines’ frequent flyer programs now receive the following when traveling on any of the three carriers:

• Elite-qualifying miles
• Elite-tier mileage bonuses for Silver, Gold, and Platinum members
• Access to elite member check-in counters
• Priority boarding on all Continental-, Delta-, and Northwest-operated flights

Is there an advantage to pursuing elite status in one of the programs over the others? The good news is that the elite programs of the three carriers are more similar than they are different. For example, each has three tiers—Silver, Gold, and Platinum—with largely comparable benefits accruing to each tier. But there are differences among the programs in the area of earning elite status and the specific details of the benefits associated with elite.

The following table summarizes the salient differences among the three programs’ elite policies and perks:

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Level

Continental OnePass

Delta SkyMiles

Northwest WorldPerks

Elite qualification requirements

Platinum

75,000 miles/ 90 segments

100,000 miles

75,000 miles/ 60 segments

Gold

50,000 miles/ 60 segments

50,000 miles

50,000 miles/ 40 segments

Silver

25,000 miles/ 30 segments

25,000 miles

25,000 miles/ 20 segments

Elite-qualifying miles (as a percentage of flown miles)

First/Business

150%

200%

150%

Full-fare coach

150%

150%

150%

Discount coach

100%

100%

100%

Deep discount coach

100% [1]

50% [2]

100% [1]

Elite mileage bonus

Platinum

125% mileage bonus

100% mileage bonus

125% mileage bonus

Gold

100% mileage bonus

100% mileage bonus

100% mileage bonus

Silver

50% mileage bonus

25% mileage bonus

50% mileage bonus

Elite upgrades

Platinum

Unlimited confirmed upgrades

Unlimited confirmed domestic upgrades (through Dec. 31, 2003)

Unlimited confirmed upgrades

Gold and Silver

Unlimited confirmed upgrades

500-mile upgrade certificates based on miles earned after qualifying for elite

Unlimited confirmed upgrades

[1] When traveling on Delta, only 50 percent of miles for deeply discounted coach fares count toward elite.
[2] When traveling on Continental or Northwest, first/business/full-fare coach earn 150 percent of flown miles toward elite, discounted economy earns 100 percent, and deeply discounted economy earns 50 percent.

Elite qualification requirements

The above chart shows that Platinum-level elite status may be earned in the Continental and Northwest programs for 75,000 miles, 25,000 fewer miles than is required to reach the same level in Delta’s program. Additionally, Continental and Northwest include the option of earning elite based on flown segments. Northwest’s segment requirements are lower than Continental’s, which makes it easier to earn elite status on Northwest than on the other two airlines if you qualify based on segments flown.

Elite-qualifying miles

In the Continental and Northwest programs, 150 percent of the miles flown on select carriers are credited toward earning elite status for first, business, and full economy fares, and actual flown miles are credited for discount economy fares.

By contrast, Delta awards more elite-qualifying miles for first/business fares—200 percent versus 150 percent of actual flown miles—but fewer for deeply discounted fares—50 percent versus 100 percent of actual flown miles.

So those very few travelers who fly predominantly in first or business class might attain elite status in Delta’s program faster than in the programs of Continental or Northwest. Conversely, those who buy the cheapest-available coach tickets will reach elite status faster in the Continental and Northwest programs.

Elite mileage bonus

In all three programs, elite members earn extra base miles, depending on whether they’re Silver, Gold, or Platinum. In the Continental and Northwest programs, Silver, Gold, and Platinum members earn bonuses of 50, 100, and 125 percent respectively for flights on designated carriers. Delta’s bonuses are decidedly more modest: 100 percent for Platinum and Gold members, 25 percent for Silver members.

Elite upgrades

Finally we come to upgrades, which for many frequent flyers are the Holy Grail, the primary reason for pursuing elite status in the first place.

Here again, Delta’s program is markedly less generous than Continental’s and Northwest’s, offering unlimited confirmed upgrades only to Platinum members (and only through the end of this year). Continental and Northwest offer unlimited confirmed upgrades to all of their elite-tier members.

For elites: Stay or switch?

Bottom line: It’s easier to attain elite status in the programs of Continental and Northwest, and having reached elite status, those programs reward their members more generously, with more bonus miles and unlimited confirmed upgrades.

Having established that, it makes sense, in theory, to focus your mileage earning on the Continental and Northwest programs in order to take advantage of their elite benefits. The follow-up question is whether it makes sense to do so in the real world. There are at least two counterarguments to doing so.

First, anyone considering a change from Delta to Continental or Northwest would only have the rest of this calendar year, roughly six months, to accumulate the 25,000 miles required to reach Northwest’s first elite tier for calendar year 2004. That will be difficult for many, which means that the next period for earning and enjoying elite benefits by switching programs would be more than a year away.

Second, there’s no guarantee that the disparity among the programs will persist. In fact, the tendency among close allies is to bring their programs into ever-closer alignment, precisely to eliminate the sort of switching incentives we’re discussing.

Those caveats noted, for those in a position to reach elite in the Continental or Northwest programs quickly and benefit from the more generous perks sooner rather than later, switching may be a strategy worth pursuing. If you can’t reach elite in time, consider re-evaluating your situation in January based on whatever changes have been announced to the programs, as well as your travel plans for 2004.

Whether you’re elite or not, the combination of Continental, Delta, and Northwest is a compelling one, making each of the airlines individually more attractive than it might otherwise be.