Delta Airlines SkyMiles has announced that award travel will permanently count for Delta Medallion status qualification. Where Delta leads, other airlines often follow. But should they?  Most readers will think…  OF COURSE! But here’s a few reasons why the airline should consider it too…

Aligning Incentives

All major frequent flyer / loyalty programs offer dozens of award options. However, many of those options involve paying a partner – airline, hotel chain, merchant etc. – for the reward. What any frequent flyer program really really wants… is for you to redeem your miles on a seat that the airline has itself determined that it probably won’t be able to sell.

So a very easy way to give an added incentive to members is to have award flights ON YOUR OWN METAL count for elite status purposes.

It Fits the Strategy

Although Delta is the worst offender, more and more airlines want to move towards the dynamic pricing of award flights. In essence, miles would become a cash equivalent payment method – the more expensive the flight, the more miles you would be charged.

If you want to train your members into seeing cash and miles as two similar payment methods, then it makes perfect sense to award status credit for all flights, not just the ones paid for with cash.

American Airlines

It might not appear that way at first glance, but AAdvantage already allows you to earn elite status with miles. The difference is that American Airlines awards Loyalty Points when you EARN miles from many partners.

So if you earn 20,000 miles from credit card and other eligible partners, then you will pick up 20,000 Loyalty Points.  It doesn’t really matter where or how you actually spend those redeemable miles.

 

AAdvantage was the first frequent flyer program to say the quiet part out loud. An airline’s most lucrative customers aren’t those who fly around the country /world the most; they are the ones who earn the most miles. (whether by buying expensive plane tickets or by using their co-branded credit card a lot)

Hotel Chains Do It

I believe that Hyatt was the last hold-out.  But all major hotel chains now count award nights exactly the same as paid nights (booked directly), at least when it comes to elite status qualification via stays or nights.

Hotel chains have realised that, if you want to build a loyalty eco-system, you cannot simply reward your guests only when they spend cash.

Bottom Line

Even though I will never become a Delta Medallion – with or without award flights counting for elite status – I do think that Delta has made a good decision here. Loyalty program members will love it, and it fits the strategy. Hopefully other airlines will follow…