DL Eliminates Mileage Expiration - Will AA follow ?

Discussion in 'American Airlines | AAdvantage' started by Phineas, Feb 15, 2011.  |  Print Topic

  1. Phineas
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    Phineas Silver Member

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    kudos to DL, a customer friendly enhancement

    I just got the following email

    Hello Phineas,
    [​IMG] [​IMG]




    You now can earn miles without worrying if and when they will expire as we have eliminated our mileage expiration policy - no asterisk, no fine print, no ifs, ands or buts.

    So regardless of your future SkyMiles activity, redeem your miles whenever you want for Award Travel to 350+ worldwide destinations, car rentals, hotel stays, newspapers, magazines and one-of-a-kind auction packages.

    We are proud to be the only major U.S. carrier without mileage expiration.

    Visit delta.com to learn more about your SkyMiles benefits and explore the many ways you can earn and use your miles.

    You're the reason we fly,

     
  2. wanderlust
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    wanderlust Silver Member

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    It's only because you need extra time to accumulate enough miles to actually redeem a reward [​IMG].

    Honestly, I don't see AA following Delta. Mileage expiration is a common policy, and unless other carriers drop expiration policies I don't see AA leading the charge with Delta. Makes me think of baggage fees, something most fliers dislike, but which most airlines have in spite of the fact that some airlines (e.g., Southwest) heavily advertise no fees.
     
  3. sobore
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    sobore Gold Member

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    Far be it for AA to simplify things, but it would be a step in the right direction.
     
  4. Microwave
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    Microwave Silver Member

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    I posit that mileage expiration helps keep airlines' books clean, as each mile is a liability that has to be recorded. Those that take a flight, credit it to a frequent flyer program, then do nothing ever will be accruing a liability for that airline that would never go away if there wasn't an expiration policy. I think reasonableness is the key word: it's important to me that my airline of choice has a reasonable expiration policy, but I don't expect them to last forever if I stop accruing activity. Just my two pence.
     
  5. Westsox
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    Westsox Gold Member

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    The expiration of miles each year is an income proposition for airlines. If the miles do not expire, the liability for the airline continues to grow. My guess is the super-users/collectors of miles and points rarely let them expire. I do not understand why, from a financial standpoint, Delta would not want the miles to have an expiration.

    I do not see the other airlines following suit at this time. Would you really try to collect more Skymiles just because they never expire?
     
  6. miamigrad
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    miamigrad Silver Member

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    It's so easy to keep miles from expiring, so I don't personally see this as a benefit -for me.- I don't care if AA follows or not, provided that it doesn't negatively impact the AAdvatage program.
     
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  7. gemac
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    gemac Silver Member

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    From what I hear, it is very hard to find award availability for a nice award on DL, so it may be necessary for DL members to keep their miles while waiting for award availability.
     
  8. Microwave
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    Microwave Silver Member

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    Availability is easy to find, gemac. For only 370,000 miles you can enjoy a comfortable business class seat LAX-SYD, pick your date. [​IMG]

    In all seriousness, this may have been envisioned as a way for people to take more time to accrue miles, since actual redemption levels do tend to be much higher on DL.
     
  9. tommy777
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    tommy777 Co-founder

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    Gotta tell you, couldn't care less if AA follows or not :p
     
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  10. TheIceTrojan
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    TheIceTrojan Silver Member

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    This action by Delta is a virtual admission that the Sky Pesos program has very limited redemption benefit (availability) and there is no intention of improvement in this area. AA has no need to even consider looking at such a change and needs to spend time on much more urgent issues that are effecting AA ability to compete.
     
  11. flacey8
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    flacey8 Silver Member

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    Totally agree - which is why I have not signed up and not planning to sign up with DL.
     
  12. tom911
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    tom911 Gold Member

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    Delta made $1.4 billion last year, compared to an AA loss of $471 million. Maybe they're just in a better financial position to absorb that liability.
     
  13. Microwave
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    Microwave Silver Member

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    Without getting too deep into it, the profit & loss sheets and balance sheets are different animals... For what it's worth, in taking a quick look at DL's balance sheet, they're running a billion or two more in assets than liabilities, while AMR is the other way round (looking at FY/CY09)... And the balance sheets I looked at didn't spell out the liabilities either airline is holding in unredeemed miles, so it would take more research to find out just how much of the liability side of each airline's balance sheet is weighted with miles. That said, while DL has a lot more liabilities on its books, it also has a lot more assets to back them, so may find it easier to carry this liability than AMR at this point.
     
  14. FLYERIL
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    FLYERIL Silver Member

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    The biggest problem with the Skymiles program was not the exipiration of miles (you had two years) but the Skymiles inflation that required huge numbers of Skymiles for awards.
     
  15. Miles
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    Miles Silver Member

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    Isn't Delta's change aimed mostly at infrequent flyers, who do experience expiration of miles?
     
  16. chemist562
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    chemist562 In Memorian

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    Not sure if AA will follow. A friend of mine had 110K miles & he asked me how to keep them from expiring. I did the online Bose promo video for 150 miles and now his don't expire for 18 months. I also did the survey for my wife & I and added 150 miles each. :)
     
  17. eastbay

    eastbay Active Member

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    I managing about 12 AA accounts [​IMG] and it would be nice not to have worry is account going to lose it miles.
     
  18. FLYERIL
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    FLYERIL Silver Member

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    How many wifes do you have? [​IMG]
     
  19. GUWonder
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    GUWonder Silver Member

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    Expiring miles or not, award travel pricing inflation has occurred anyway -- and that's in terms of the number of miles charged and/or in terms of money charged by way of airline fees applicable on award travel.

    Isn't DL the major US airline that collected the highest amount of fees per passenger in recent times, courtesy largely of the infrequent flyer? Then it ought not be a surprise that DL isn't interested in cutting off the nose to spite the face.

    This is about revenue rather than liability, as DL has mastered the art of devaluing miles as and when it suits DL..
     
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  20. Omar's_Coming
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    Omar's_Coming Silver Member

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    this really wouldn't be a benefit for me. twice a year (3/30 & 9/30) i go through all my accounts and the accounts of family that i manage and ensure none are close to expiring. if they'll expire in th next 7-12 months i do something about it (and still have one more review before they'd expire). takes a small bit of time, but isn't that big a deal.

    the way i see it, the less miles out there, the better chance of me using mine.
     
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  21. byroncheng
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    byroncheng Silver Member

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    I'd agree that it's most likely DL's method of tapping into the infrequent flyer. Plus, just being in the news and sounding "good" is always a plus for mindshare.
     
  22. DestinationDavid
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    DestinationDavid Milepoint Guide

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    From a fiscal management standpoint, I wonder what kind of process is used to determine the value of a mile? We know that "active" miles are counted as liabilities for the airlines, so I wonder if AA counts their miles with more dollar value then DL, therefore allowing DL to be less restricted by the expiration date?

    For example if AA values an AA mile at $1, but DL knows its redemption values are so inflated that a DL mile = .20 cents, that would create greater flexiblity with the expiration.

    Anyone know how they calculate miles liability?
     
  23. Microwave
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    Microwave Silver Member

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    I certainly am not an airline accounting expert, but typically such liabilities are estimated using mark-to-market accounting, or an estimate of something's fair market value at the time the balance sheet is prepared. The other option would be to measure the liability using book value, but since airfares (and therefore the "cost" to the airline of redeeming a mile and satisfying the liability) are fluid, and redemption rates are also not fixed (think mid-tier awards), using book value for this type of liability wouldn't make much sense as it would tend to overstate the dollar value of the liability over time. Thus, not only could DL's market value of each mile be lower than AMR's, as DL continue to devalue SkyPesos into SkyLira, their outstanding miles liability on each subsequently released balance sheet could go down as the average cost to their business of each redeemed mile goes down.
     
  24. eastbay

    eastbay Active Member

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    I wish it was 12 .........[​IMG]
     
  25. gemac
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    gemac Silver Member

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    If you have the right one, one is plenty.

    If you have the wrong one, one is too many.
     

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