Delta to Merge "Grandfathered" Miles with Newer Ones

Delta to Merge "Grandfathered" Miles with Newer Ones

Delta Air Lines is telling longtime customers that its oldest frequent flyer program is going away next year.

But don’t worry; the points will still be perfectly usable, according to the airline.

Since 1995, when Delta created the SkyMiles program, it has maintained customers’ older miles, earned in the original “Frequent Flyer” program as a separate item on their accounts.

Now the airline plans to combine the totals at the end of 2006.

Delta said combining the two sets of miles would simplify things for customers and the airline. “It brings all the programs together so you only have to keep track of one account,” said Delta spokesman Anthony Black.

The message seems to indicate that both sets of miles have the same value for trips or perks, but the older miles did have one distinction — they didn’t expire.

Here at InsideFlyer, we disagree strongly with that assessment. We fully appreciate and respect that Delta Air Lines has for some time reserved the right to change this program without notice. For us, that’s not the issue. The issue is whether Frequent Flyer/SkyMiles can openly admit to false advertising. In their newsletter of that era, they boldly claim “Miles earned prior to May 1, 1995 never expire. As long as Delta has a frequent flyer program, miles earned prior to May 1, 1995 will never expire… We want you to keep the miles you’ve earned. It’s that simple.”

We know that during that year, Delta Air Lines ran an ad during the Super Bowl with absolutely no disclaimer about being able to change their rules. No fine print. The ad was for their frequent flyer program and the focus was that their “Miles Never Expire.” They were trying to leverage that specific difference between them and the expiring miles of rival programs — American AAdvantage and United Mileage Plus. That is clearly an advertisement seen by millions of people, and it contained no caveats.

Granted, the number of miles affected by this proposed change has dwindled over the years, but that is still not the point, just as expiring miles is not the point.

To date, we’ve seen no other source mention the loss of value to those miles by the change of the award chart under which these miles may be redeemed. As part of the change in 1995, Delta claimed that “All mileage earned in the current Frequent Flyer program may be redeemed for Delta awards under the Frequent Flyer Medallion Award Chart for as long as the Medallion program exists, provided you maintain elite status in the SkyMiles program and have a balance in your Frequent Flyer account.” That was ten years ago, and none of us here at InsideFlyer were able to maintain the constant elite status that earned the ability to redeem miles under the old Medallion Award Chart, but we feel those members that have maintained their loyalty and business to Delta over these years cannot be dismissed this easily. This is exactly why Delta is currently in the mess they are in — they have made some bad mistakes. Notable among these awards are a coach-class ticket in the U.S. for 20,000 miles, a first-class ticket for 25,000 miles and two first-class tickets to Hawaii for only 75,000 miles.

We staunchly support SkyMiles and Delta Air Lines as they struggle through the tough times they have had and face in the future, but this is no way to do it. We felt is was bad enough that they restricted summertime awards of any kind on their major alliance partners Air France and KLM, and this is the second mistake at a time when they simply cannot alienate any members. Look at the bankruptcy filings of United and US Airways (and even Continental years ago). Neither made any restrictive changes to their programs during that period.

In fairness, and because we do support SkyMiles, we chatted with Jeff Robertson, the General Manager of SkyMiles, and he notes, “The conversion of the older Frequent Flyer Program into the newer SkyMiles Program has been a consideration of DL’s for many years now, particularly given the complexity of managing both programs, and that other airlines with these two programs converted them years ago. The complexity that existed in managing this older program, including the hundreds of award codes we had to maintain, the knowledge required of our front-line employees to understand both programs, the technology associated with managing two different pools of mileage balances, and the limited use of these older program miles by our customers was the rationale for making this decision now. Although there are millions of customers who still have some of these older program miles in their accounts, far fewer had enough to redeem a domestic First Class or Coach Class award ticket. On top of this, we witnessed only a few thousand redemptions annually over the last couple years, which would have meant these miles stayed out there for likely hundreds of years. The combination of the reduced complexity and lack of customer usage of these older miles, drove our decision to make this change now.”

Sorry to disagree with Jeff, but not every program that had two programs has converted. United did so almost two years ago but they did not have a separate award chart as does Delta and American AAdvantage still maintains its dual programs with more than expiring miles at stake. We chatted with Kurt Stache, President of AAdvantage, and he says, “We are always interested in airline changes to their programs and this change certainly got our attention. However, at this time, rolling old miles into new miles is something we are not contemplating.”

Member reaction has been mixed. A number of longtime SkyMiles members are upset that the old miles, which they were planning to use upon retirement, will now expire. Others point out that members have now had 10 years to use these miles, and have now been given notice 16 months in advance.

We have no dog in this fight other than to try and help Delta avoid becoming a topic of angry conversation among its most loyal members. We would ask Delta to consider amending the changes to allow a one-time allowance for members in this scenario to be able to lock in awards from the Medallion Award Chart for redemption later on. Continental did something similar years ago. They could introduce a program to reinstate expiring miles similar to American AAdvantage and simply allow this group of members a fee-waiver. This will allow members to still get value from what they were told to believe. This will allow Delta to proceed with reducing the costs of maintaining two programs, but in our mind, save face for one of the major challenges in this industry — being accountable for what you directly say to your loyal members. The members affected by this Medallion Award chart change would have had to maintain substantial loyalty to Delta for ten years running. We at InsideFlyer simply can not ignore that.

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