Big changes ahead for frequent fliers on Delta

[QuotaMan]

http://news.yahoo.com/big-changes-ahead-frequent-fliers-delta-122501255.html

 

 

ATLANTA (AP) — Delta Air Lines is changing its frequent-flier program to favor passengers who buy the priciest tickets instead of those who fly the most miles.

Beginning next year, Delta will base miles toward free flights on the amount that passengers spend on tickets. Currently, members of its SkyMiles program earn miles based on how far they fly — it doesn't matter whether they bought an expensive first-class seat or the cheapest ticket in economy.It's a bid to lure higher-spending business travelers, who often book flights on short notice and pay more than bargain-hunting leisure travelers.

Delta will become the biggest U.S. airline yet to make such a change. American and United are likely to watch to see how travelers respond.

Wednesday's announcement wasn't a total surprise. Delta had already taken steps toward rewarding big spenders.

A year ago, it announced that starting in 2014 passengers would need to spend at least $2,500 with the airline to qualify for the lowest level of elite frequent-flier status, which carries perks such as free upgrades and a waiver from bag fees. Before that, they could qualify on miles alone. United quickly matched Delta's change.

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Virgin America and JetBlue Airways Corp.'s "True Blue" frequent-flier program award points based on dollars spent, not miles flown. Southwest Airlines Co., which carries more passengers within the U.S. than any other airline, overhauled its Rapid Rewards program in 2011 to award free tickets based on money spent, not trips taken. It seems to be paying off; a spokeswoman said the changes boosted Southwest revenue by $180 million in 2012 and an additional $100 million last year.

The move by an airline the size of Delta, with its international routes and important corporate customers, adds to a more fundamental trend in air travel — luring big-bucks travelers with better seats, fancier meals in first class, and VIP treatment at the airport.

"If you're a corporate traveler, the IBM guy, this is good for you," Randy Petersen, editor of InsideFlyer magazine, which tracks the airline-loyalty business, said of Delta's move. "The infrequent traveler clearly is the loser here. Frequent-flier programs are no longer for them at all."

Some of those Delta leisure travelers wasted no time complaining on social media. The same thing happened at Southwest. But if United and American follow Delta's lead, "there's not much a consumer can do," Petersen said. "Where are you going to go?"

That's the dilemma facing Ben Holcomb, who works in information technology in Norman, Okla. He said he has earned seven or eight free trips in the past couple of years and climbed to Gold Medallion elite status on Delta by racking up miles with bargain-fare leisure trips. "The days of being able to do that are numbered," he said.

Holcomb said he understood why Delta decided to change its program, but added, "It really leaves no incentive to fly with Delta unless they have a better price."

Al Meyers, who has worked for nonprofits in Atlanta and used to be an elite Delta member, said SkyMiles will go from a frequent-flier program to an expensive-flier one. He said the biggest airlines are catering too much to corporate travelers, forcing average consumers to consider budget carriers.

"We're going to have the Lexuses and the Tauruses," he said.

Delta Air Lines Inc., based in Atlanta, said that beginning Jan. 1, SkyMiles members will earn between 5 and 11 miles for every dollar they spend on tickets — the low end for general customers, and the biggest bang for elite Diamond Medallion members. All of them will continue to get a bonus for buying tickets with a Delta-branded credit card.

Other changes, Delta said, include more availability of reward seats at the lowest mileage-requirement levels, one-way awards at half the miles needed for a round-trip reward — American does that now — and more options to combine miles and cash when buying tickets.

Jeff Robertson, a vice president who oversees the SkyMiles program, said that nearly all hotel and credit-card programs already base rewards on money spent, and Delta's change was designed to better reward the airline's most loyal customers.

 

 

[bgtp]

This caused quite an uproar here in the USA yesterday. With so much going on in the world, it's kind of bizarre when changes to a frequent flyer program make such a newsworthy impact. Along with the recent devaluation at United, maybe the 'golden-age' of getting something for next to nothing is coming to an end. I don't fly much any more and get most of my miles/points and resulting awards via the credit card churn game. The benefits of having a Delta Airlines branded AMEX card don't seem to be affected in any way, yet. Not surprising since the selling of miles to the credit card companies is a big money maker for the airlines. So, if as Delta's claims (?) they are going to release more lower redemption award seats while at the same time reducing the miles awarded to passengers buying the cheap tix, will this actually hurt someone like me. Time will tell.

 

I know people mock Delta's 'Skypesos', etc. But, I've done alright getting awards with a little flexibility either on Delta or Korean. Living in the southeast USA, I prefer either of those airlines as it's a short hop to Atlanta for me and then I can sleep on the long leg from Atlanta to Tokyo/Seoul before heading on to BKK. Delta's business class product on this route is nice in their B747, especially with the 1-1 seating upstairs.

 

Delta's rewarding their higher revenue passengers more may not be such a bad idea from a business perspective and Delta's stock has risen from $9 to $33 in less than two years, so maybe they think they know what they are doing. For now, the mergers, reduction in capacity and increased demand have swung the pendulum in favor of the airlines over the flying public. We'll see what happens if/when it ever swings back the other way.

 

 

[LeyesHombre]

I'll be very curious to see how this pans out. Hopefully it will backfire. United recently hosed me for an extra 5K in FF miles for an intra-Asian flight (12.5K to 17.5K).

 

BHP

[yugot]

Good reason to abandon Delta. A typical LAX-BKK now nets almost 17,000 miles, but on new RULES only give 5,000 miles on a $1k ticket. And at 80,000 miles for a rt redemption to Asia... I'm bad at math, it's gonna take a long long time to earn even one coach reward ticket. Only the frequent business travelers are going to come out OK in this.

 

Even after the big United FF devaluation, they're still looking a whole lot better right now. Too bad United seems to be a sheep to Delta, so it's just a matter of time before they match.

 

Maybe time to get loyalty on an Asian carrier? Or maybe not, because most of their cheap fares only earn a fraction of flown miles too.

 

More reasonably it's time to ditch any loyalty and just go for the cheapest flight, whichever airline is offering. The days of free flights for us plebeians are going gone.