Have airlines found their next ancillary revenue stream? Loyalty experts say it’s elite status

 

Key takeaways

 

 

• Elite status is becoming a new ancillary revenue opportunity. Airlines are moving beyond traditional points and miles by commercialising status through products such as status accelerators, paid tier-retention offers and exclusive elite benefits.

 

 

• Elite members drive a disproportionate share of airline revenue. According to Stuart Melim, travellers with elite status typically represent just 3% to 7% of an airline’s customer base, yet account for 20% to 30% of total revenue.

 

 

• AI could make status even more valuable. Rather than transforming loyalty programs themselves, AI may increase the importance of elite status by making fare comparison easier and reducing price as a competitive advantage.

 

 

For decades, airlines have focused on monetising loyalty currencies through points, miles and co-branded credit cards. But according to loyalty experts, the next phase of airline loyalty will be less about the currency customers earn and more about commercialising the status they hold.

 

 

Speaking on the latest episode of the Travel Trends podcast, Mark Ross-Smith, CEO of Loyalty Status Co., argued that airlines are beginning to rethink one of the least commercialised elements of their loyalty programmes.

 

 

“I think a lot of brands have focused on the currency for a long time. That’s the points and the miles… Status might be the greatest untapped ancillary revenue opportunity that currently exists in travel today.”

 

 

If that prediction proves correct, it would represent one of the biggest strategic shifts in airline loyalty for decades—transforming elite status from a customer reward into a commercial product capable of generating new ancillary revenue.

 

 

From loyalty currency to customer value

 

The traditional airline loyalty model has centred on transactions: earn points, redeem rewards and encourage additional spending through flights, credit cards and partner networks.

 

 

Ross-Smith believes that model has largely matured. The next opportunity lies in something points cannot easily deliver: emotional engagement. “Points and miles are very transactional. Status is very emotional.”

 

 

Rather than identifying themselves by the number of points they have earned, travellers are far more likely to associate themselves with their elite tier and the experience that comes with it—from priority boarding and lounge access to fast-track security and personalised service.

 

 

For airlines, that emotional connection creates a level of customer loyalty that is increasingly difficult for competitors to replicate.

 

 

Why status matters commercially

 

 

The economics behind the shift are equally compelling. According to Stuart Melim, CFO of Loyalty Status Co., elite members typically represent just 3% to 7% of an airline’s customer base, yet generate 20% to 30% of total airline revenue.

 

 

With such a disproportionate contribution to revenue, airlines are reassessing how status can support long-term growth.

 

 

Unlike occasional travellers, elite members rarely choose based solely on price. Recognition, convenience, and elite benefits often outweigh small fare differences. Priority security, lounge access, upgrades, and personalized service become part of the overall travel experience, making these travellers significantly more valuable over the long term.

 

 

Melim argues that after years of prioritising loyalty currencies and credit card partnerships—particularly during the pandemic—the industry is once again focusing on the strategic value of elite membership.

 

 

Selling status, not just rewarding it

 

 

The biggest change may be how airlines are beginning to commercialise status itself.

 

 

Rather than viewing elite tiers solely as a reward for frequent flyers, carriers are introducing products designed to help travellers earn, retain or enhance their status. These include status accelerators, paid tier-retention offers, intermediate status levels and personalised elite benefits.

 

 

As Ross-Smith puts it, “Airlines are commercializing status in new ways they would never have dreamed of.”

 

 

Early examples are already emerging across the industry. Star Alliance Gold members can receive complimentary First Class upgrades on Heathrow Express simply by presenting their status, extending elite recognition beyond the flight itself. Meanwhile, Flying Blue has introduced “Choice Benefits” between its Platinum and Ultimate tiers, allowing members to select personalised rewards such as gifting elite status or choosing bonus miles.

 

 

Rather than simply adding new perks, these initiatives are designed to strengthen customer retention while creating additional ancillary revenue opportunities.

 

 

AI could accelerate the trend

 

 

Melim believes artificial intelligence may further increase the commercial value of elite status.

 

 

As AI-powered search and booking tools make fare comparison increasingly effortless, airlines may find it harder to compete on price alone. Elite travellers, however, tend to choose airlines based on recognition, convenience and premium experiences as much as on fare.

 

 

In an AI-driven marketplace where pricing becomes increasingly transparent, status could become one of the few differentiators that technology cannot easily commoditise.

 

 

The next evolution of airline loyalty

 

 

For years, airlines have focused on monetising loyalty currency. Increasingly, however, they are beginning to monetise loyalty itself.

 

 

Status is evolving beyond recognition for frequent flyers into a strategic commercial asset—one that can generate ancillary revenue, strengthen customer retention and differentiate brands in an increasingly competitive market.

 

 

As Ross-Smith puts it: “Status might be the greatest untapped ancillary revenue opportunity that currently exists in travel today.”

 

 

Whether or not that prediction fully materialises, airlines appear to be entering a new phase of loyalty strategy—one in which elite status is no longer simply a reward for their best customers, but a product in its own right.