Letters – March, 26 2014

Letters – March, 26 2014

An earn system based on miles was inevitable–inflation slowly eats away at the value of those flight miles, and everything else is revenue based. But a fixed point burn makes more sense economically.

Those seats should be the ones that can’t be sold, and last seat availability can be made outrageously pricey.
Miles [InsideFlyer blog]

Where’s the Benefit?
Let’s take a look at the announcement. New Delta SkyMiles Benefits:
One-way awards. Not new, I just looked one up and can book it TODAY.
New, easier/cheaper to use award levels: False, 25,000 still the floor. How much do you want to bet the ceiling will still be just as sky high?
Earn even more with Amex: False, we already get the two mile bonus when we book with Amex.
No blackout dates: I’ve NEVER seen a date completely blacked out on the calendar, including when I flew home around Thanksgiving a few years ago.
More award seats available: Will it be more net seats? Will it be more seats at steep prices? What are the details?
New award calendar: Seems like that is just the price of admission to being a 21st century company.
More than just flights: These already exist too. Miles and Cash: Already there, used it.

So one has to ask, where are the positive improvements to the high value customers other than those who exclusively buy first or business class tickets? I’m well over the Medallion Qualifying Miles level each year for Diamond, I earn BOTH mileage bumps on my Delta RSRV Amex (that should clue into my spend), and I fly my miles each year without mileage runs. I don’t see the benefit, especially as I start making more and more long haul flights.
Brad Johnson [InsideFlyer blog]

Blue-er on the Other Side
Good news for the guys flying on someone else’s money. I am a 1.8 million miler who paid for every one of those miles out of my own pocket and I very much have to monitor my expenses. (Read: Saturday night stays, longer commutes to/from alternate airports, e-fares, LTSU fares, etc., to control costs.) Guess this makes me one of the guys they are trying to de-emphasize.

My planning has always been :Delta first” when possible because of the value of the frequent flyer program and the points. As that value erodes/disappears, my approach to travel must include the value of other factors i.e.: price, schedule, convenience, etc., as well as the value of other carriers’ frequent flyer programs. Quite simply, it will be Orbitz, Expedia, Travelocity, on my favorites bar instead of Delta.com.

Regarding the comparison to hotel programs, all of the ones that I utilize offer the opportunity to earn points/nights through various and frequent bonus programs that are based on STAYS / NIGHTS and NOT spend alone. It seems that they have realized the importance of loyalty and volume in addition to spend alone.

Overall, this “improvement” is saddening to me as a lifelong Delta devotee. On the other hand, maybe the sky indeed IS blue-er on the other side of the terminal.
Tripcord [InsideFlyer blog]

Inevitable Part 2
I am in the same boat [as Tripcord] (DM with 1.7 million MQMS all flying) and feel the same way. These changes were inevitable given the consolidation in the industry that was for the benefit of the consumer. (LOL.) The best protection for customers is a large number of firms competing for their business.

One potential consequence of this change is the additional conflict it poses for business flyers and their corporate travel budgets and departments. Will business flyers take the most expensive flight to maximize their frequent flyer miles accrual? That is great for the airline’s shareholders, but the shareholders of the frequent flyer’s company are getting ripped off. I can definitely see that this change will increase the travel costs for corporate travel departments. And if I managed corporate travel costs, I would look at ways to ensure people were taking the lowest fares when feasible.

[Also,] airfares have much greater variability than hotel room rates. Plus Delta is offering multiples of five to 11 times the airfare. The hotel programs I’m familiar with don’t have multiples anywhere near that. Hotels also don’t have multiple prices for the same hotel room whereas airlines charge a myriad of prices for the exact same airline seat. Delta’s program exacerbates the potential conflict of interest between the company that pays and the business person who gets the benefit of the frequent flyer miles.
John [InsideFlyer blog]

Value for Loyalty
Canary in a coal mine is an apt metaphor [Editors’ note: Read the March 2014 InsideFlyer cover story: “Delta: The Industry’s Canary in a Coal Mine”.] While others have gone this route (JetBlue, Southwest, Virgin America), Delta is the first legacy airline to do so. And because of competitive pressures, I predict this won’t stand unless BOTH American and United match. Hard to say which way that will go… I think Smisek’s United would be game to try it (just as they followed Delta with qualifying spend requirements) but American Airlines is the wild card. It’s hard to guess if Doug Parker’s post-merger AA will follow the crowd or seek to leverage customer loyalty by leaving the program largely as it is.

The big-spending frequent flyers (i.e. most of my client base) DO pay attention to these things. I think airlines underestimate how closely the people with the big wallets monitor these developments. They want value for loyalty, and if they don’t think they’re getting it, they will go elsewhere.
Ryan Lile [InsideFlyer blog]

What Benefit?
The program seems exceedingly complex. Given that aspirational awards will not really exist, why not just simply offer ticket rebates or some such thing, since everything will hew to a ratio of ticket cost?

If it’s not about money, then what is it about, Randy? Your analysis is exceedingly weak here, given that these programs are profitable and Delta already offers thin award availability compared to its peers. What benefit is left to wring out of this?
Adam P [InsideFlyer blog]

Why Strive?
One thing I haven’t heard mentioned here or anywhere else is the decreased mileage-earning premium between Silver and Gold/Platinum. Today, Silver Medallion earns a 25 percent bonus while Gold Medallion and Platinum Medallion earn a 100 percent bonus–this equates to a 60 percent miles-earning premium when moving from Silver Medallion to Gold Medallion/Platinum Medallion (2 miles / 1.25 miles = 1.6). Next year, that premium drops to 29 percent for Platinum Medallion (nine miles per dollar vs. seven) and 14 percent for Gold (eight miles vs. seven). In an era of (far) fewer upgrades, why should I strive for Gold Medallion/Platinum Medallion if I’m not getting upgraded and not earning much of a mileage premium? Seems like I’d be better off trying to secure premium status on a second airline instead of shooting for Gold or Platinum on Delta.
Robert Errant [InsideFlyer blog]

“Tear” Awards
Very well written article. However, I think your comparison of the five-tier SkyMiles Award Chart to hotel award categories is flawed. Most hotel award categories factor in variation in the product (you pay twice the points for a St. Regis versus a Westin) while the SkyMiles tiered awards are different prices for the SAME product on the same route (same coach seat on the same route can be 25,000 miles or 50,000 miles depending on award availability). Hotel points are not like SkyMiles tiers–the award cost of the same hotel room doesn’t go from one price to a higher price due to limited availability of that same exact room. Hotels may charge different points levels for different rooms in the same building (e.g. Suite vs normal room) but not different prices for the same exact room.
Mcn [InsideFlyer blog]

MR is Dead
Thanks for the detailed [feature story]. Personally, I don’t think it has much of an effect on me. Sure, mileage running is dead (at least on Delta) but I think that most of us knew that it was on the way out anyways–eventually the airlines were going to figure out a way to stop it (and this seems pretty adept at doing it).

For me though, I don’t earn my Delta miles by mileage running, so this doesn’t affect me that much.
Points With a Crew [InsideFlyer blog]

Editors’ Note: We are sharing some of the comments we received from the new InsideFlyer blog about the changes coming to the Delta SkyMiles program in 2015. You can post your comments at http://www.insideflyer.boardingarea.com and they might be featured here in future issues of InsideFlyer magazine.

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