After a Drab Decade, Swanky Airport Lounges Are Back

U.S. airlines are putting their fat profits into plush decor and signature scents for their most valuable travelers

The new United Club at San Diego International Airport.

The new United Club at San Diego International Airport.

Source: United Continental Holdings Inc. via Bloomberg

As a business traveler who flies about 100,000 miles a year, Tim Pearson remembers spending too much time in crummy airport clubs, eating stale sub sandwiches, slurping cold soup and scrounging for power strips. 

Now, he’s one of the beneficiaries as airlines make long overdue upgrades to the enclaves set aside for their most valuable customers. His favorite is the Delta Sky Club at New York’s Kennedy Airport, where a retro vibe brings out his inner Don Draper. 

“It’s a beautiful lounge. It’s got very much of a ‘Mad Men’ kind of a feel to it,” said Pearson, 56, evoking the television drama about 1960s advertising executives. “You’ve got to have a cocktail the minute you walk in.”

Flush with record profits, the three biggest U.S. carriers are pampering loyal road warriors like Pearson and seeking to entice new recruits. American, United and Delta airlines are investing millions of dollars to spruce up the sights, sounds and even smells of airport clubs that suffered from years of neglect amid $58 billion in industry losses from 2001-2009.

They’re targeting travelers who are in airports so often that they’ll pay as much as $450 a year to pass the time in a quiet, spacious sanctuary featuring complimentary snacks, drinks, charging stations and showers.

‘Wanderlust’ Scent

United Club's new complimentary food menu includes Greek yogurt.
United Club's new complimentary food menu includes Greek yogurt.
Source: United Continental Holdings Inc. via Bloomberg

United Continental Holdings Inc. is spending about $100 million over five years to jazz up 49 lounges around the world. In March it introduced a new food menu, including trendy Greek yogurt, and plans to build new clubs in Atlanta and San Francisco. American Airlines Group Inc. has concocted a signature scent — Wanderlust — for new toiletry products at its clubs and offers a line of soups curated to palates in different destinations as part of a more than $2 billion plan that will also see aircraft cabin upgrades.

Delta Air Lines Inc. built a 24,000-square-foot (2,229 square meter) flagship club at JFK with an outdoor terrace in 2013 as part of a $1.2 billion investment in Terminal 4, and rolled out new menu items in August featuring fresh bagels and fruit salads. The Atlanta-based carrier plans to add charging stations, new carpet and tile to line its Los Angeles Delta Sky Club when that reopens in June. 

“It’s really an embarrassment of riches right now,” said Robert Mann, head of aviation consultant R.W. Mann & Co. in Port Washington, New York. “It’s literally that you’ve run out of fence posts under which to hide the money. A lot of programs that would have been shelved for lack of funding have now been advanced to the front lines and are being accelerated.”

Big Three

The club competition centers mainly around the big three airlines. Discounters such as Southwest Airlines Co. and Spirit Airlines Inc. focus on no-frills service and lower ticket prices, not the cosseting of their highest-fare fliers.

“As an industry that has struggled for decades, you looked for places where you could invest with very limited capital,” American’s Global Marketing Vice President Fernand Fernandez said. “Now as you look forward, what we’re seeing is we have the ability to go invest in some of the products that our customers are very keen about.” 

Pearson, who works for branded documentary producer Flow Nonfiction in Minneapolis and has been a Delta Sky Club veteran for about 15 years, remembers the times when it was “cut after cut” in amenities offered at clubs. Those days are fading fast, he said.

“The changes in the last few years have been night and day,” he said in a phone interview March 12.

Amex Lounges

Airlines aren’t the only ones trying to woo customers by making airport waits more bearable. Credit-card companies are elbowing in, too, working with airlines to offer lounge membership like American’s deal with Citi/AAdvantage Executive World Elite MasterCard members.

Design for American Airlines' new lounges.
Design for American Airlines' new lounges.
Source: James Park Associates via Bloomberg

American Express Co. is adding Miami this year to its list of four Centurion Lounges in the U.S. after opening other outposts overseas in Mexico City, Buenos Aires, Sao Paulo and New Delhi.

“They’re trying to make card-holding more attractive by offering this exclusive service that is only available to cardholders,” said Jay Sorensen, an aviation consultant with IdeaWorksCompany and former executive at Midwest Airlines.

As with credit-card companies, the airlines are seeking to ensure that a travelers’ good club experience translates into customer loyalty. Passengers tend to spend on average 63 minutes in the lounge, enough to make an impression and convince them to return, according to Jimmy Samartzis, vice president of customer experience at United.

Membership Fees

Memberships in the clubs can cost from $450 annually for individual Delta Sky Club members to $825 for a household to purchase access to American’s Admirals Club for a year.

Increasingly, airlines have begun offering one-day passes that open the clubs to non-members. At Forth Worth, Texas-based American, many of American’s customers who purchase the $50 one-day passes convert to a full membership within weeks if not days, Fernandez said. 

The airlines are sowing the revenue from the day-passes back into the lounges to keep up with foreign competitors like Virgin Atlantic, based in Crawley, England, that have spent more over the years on plush clubs, said Sorensen, the IdeaWorksCompany consultant.

“This is what airlines do when they make money — they reinvest part of that back into the product, and the industry has been starved for profits for so very long,” he said. “I’m delighted to see that they are plowing back some of that into making the travel experience better for the travelers.”

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