This week, Delta Air Lines announced a major change to their Skymiles frequent flier program, while many in the industry speculated was coming. The changes to the Skymiles program will see an end to their current (and, some would say, traditional) points earning process, to now be a revenue-based model.
Similar to airlines like Jetblue, Southwest, or Virgin America, it no longer comes down to how far you fly, but rather how much you spend.
As of January 2015, Delta will move from a “1 mile flown = 1 point earned” model, to a new revenue-based system where for every dollar you spend on your airfare you will receive 5 points (though they are still using the term “mile” for some reason). As with the current program, the higher your elite status, the more miles you get as a reward. By using a co-branded Delta credit card, you can earn yourself a few extra points as well.
But we wanted to share our opinions from both the perspective of a miles and points junkie (Mal) and someone who doesn’t really care about miles (David).
Without delving to deep going into analytical data of the changes (for that, we suggest you check out some of the blogs as they are better qualified to make those assessments), we want look at it from two opinions, that of the mileage junkie (Mal) and someone who could generally care less about miles (David).
APATHETIC MILEAGE EARNER: DAVID PARKER BROWN
I like the idea of airline miles, but I do not go crazy over them, nor do I have many. I enjoy earning miles, but I just don’t go out of my way to do so. Many people are surprised to find that even with all my flying, I have no status with any airline. Yes, I get to fly around the world, but it is almost all non-rev, which means I cannot earn miles. I am okay with it, but it means miles have a lesser priority in my life.
I have rewards cards, but they give me cash back (which I then spend on travel). I know I probably should care more about miles, but I have just been lazy about it. Always on the to-do list. In the back of my head I have always thought that all the mileage games were a bit like cheating. The people who actually fly should be rewarded more than those who play the system. Now, I am not judging here, just I decided not to take part in the games.
It seems that airlines are starting to agree with my thoughts. Delta’s move is big. Sure, other airlines have already taken similar steps, but not the world’s second-largest airline. I see this move by Delta to likely represent the new industry standard.
With it being so easy for anyone with some time and motivation to earn miles, does that not then de-value those miles and the status. I hear so many passengers complain that they never are able to get upgrades because there is a list a mile long.
I think this is an effort for airlines to increase revenue (they are for-profit businesses, remember) and reward those passengers who they actually make money on. Why should an airline reward people who have found loopholes, such as taking advantage to discounted mileage runs? It’s logical to reward those who help your bottom line. To me this just makes sense and I am surprised it hasn’t happened sooner.
MILE MASTER & LOVER: MAL MUIR
The new Delta revenue-based program is not a good thing for the mileage junkie. Gone are the days where you could pick up a dirt cheap fare, extract as many miles out of it as possible, and use it to get some pretty decent points out of it. Although Delta has copped some flack in recent times over just how tough their program can be to redeem points (some mileage junkies call them “Sky Pesos”), they have had a number of sweet spots where they are the leader in being able to earn points.
Delta was the first of the legacy airlines to add a spending requirement to their elite status requirements, and that made sense. Delta wanted to make sure that they were not only rewarding those who flew a lot, but also those who were spending a lot. No longer could you use those cheap/mistake fares to make elite status. Some people think they are going from airline loyalty to airline disloyalty. I am not so sure about that.
Earning five points per dollar spent kind of makes it easier for you to know exactly how much you are going to get from the start. What isn’t quite evident is if the value is still going to be there for passengers. In the past you knew, no matter how much you spent, that if your award was 25,000 points, you needed to earn 25,000 miles (be it from spend or from flying itself).
Now if your award is 25,000 points, you need to spend in the worst case scenario $5000. This is definitely a devaluation, but that depends on the type of flyer you are. If you fly regularly on full fare tickets, purchased by your company, this probably won’t affect you all too much, but for the individual flyer this is a huge change.
Although in the same announcement Delta said they would be adding one-way awards (they currently don’t offer them, though you can book them and you end up paying the same round-trip price). But will that be enough of an incentive to keep flyers in the program?
For a flyer like me, at the moment, I can credit Delta flying to other programs, like Alaska (though who knows how long that will last), Virgin Australia, or other Skyteam partners (Korean, KLM/Air France) but in the short term things don’t change. As of January, though, this might all be a different story.
Since the new program comes into affect with other changes (like new tiers for redemption, though they haven’t yet been released) it is still a long way off to see if this is going to be an overall downside or just a new way forward. If the system works for other airlines, I can’t see it not working for Delta.
People are going to scream loudly over this, and they will walk to other airlines, but it won’t change where I put my miles… yet. Plus, it can’t be long until other airlines follow suit.
In the comments, we would love for you to share your thoughts. Is this the right move? Will others follow? Would this make you look at changing your alliance?