Scoop: Delta announces new revenue program for all earn.

Discussion in 'Delta Air Lines | SkyMiles' started by Randy Petersen, Feb 25, 2014.  |  Print Topic

  1. Randy Petersen
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    Randy Petersen Founder

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    Looks like the InsideFlyer blog has the scoop on a HUGE Delta Skymiles change.

    InsideFlyer blog.

    Delta Becomes the Industry’s Canary in a Coal Mine
    It’s been three years since rumors first began leaking out of Atlanta that Delta was considering modifying their popular SkyMiles frequent flyer program from a “mileage-based” program to a “revenue-based” program. (“Popular?” you might ask, but what else would you call a program with 90 million members?) Over the three years, the topic leaked from internal communications and front-end employees and was blogged about from countless points of view. Although the topic was news for many, for Delta, this was not a new development.

    It was in December 2002 that Delta sent its SkyMiles Medallion members a letter outlining the program’s revised qualifications for earning elite status. The letter stated that beginning January 2003, the program would “… better align loyalty benefits and rewards with the fares customers pay.” Again, this missive was sent to members in 2002. So it has been a long journey for SkyMiles that will culminate on Jan. 1, 2015, when the recently announced changes to the program will begin.
    ...
     
    Last edited: Feb 25, 2014
  2. WilliamQ

    WilliamQ Gold Member

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    Wow. This looks like the final nail to the coffin for MR as we know it.

    It totally chucks out the current logic of flying non-direct routes to earn more miles as it will no longer be awarded based on distance travelled but instead on fares paid.

    Certainly push for more to take direct flights and creates resistance to flights with layovers.

    I am confident that the FF community will be creative enough to think of new ways to earn (Delta) miles with minimal spent eventually but it is a change that requires a lot of rethinking for me.

    Off the top of my head, it will be even more harder (expensive) to get the million miler status. If it was highly unlikely before, now it is now likely impossible.
     
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  3. BamaGirl
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    BamaGirl Silver Member

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    Mileage runners and lower elites without the DL Amex are going to be very unhappy. As a Diamond who has the DL Amex and buys high fares, I feel like I've dodged the bullet (for now).
     
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  4. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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  5. WilliamQ

    WilliamQ Gold Member

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    Thank would be people like me who currently floats between Silver and Gold and is based out of US, so no US DL Amex cards too..
     
  6. BamaGirl
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    BamaGirl Silver Member

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    I hear you...and believe it or not, I feel for you. Like I said, I feel like I dodged a bullet. Many folks are not going to be so lucky.
     
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  7. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    That seems rather punishing, but on the other hand you are also not subject to spend limits, right?
     
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  8. MSPeconomist
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    MSPeconomist Gold Member

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    Most people that do MRs focus on status miles, not redeemable miles. Status miles still, with MQDs or the AmEx waiver, define elite status level. Higher status means more miles per dollar spent on DL, so there's still an incentive for some to do MRs.
     
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  9. WilliamQ

    WilliamQ Gold Member

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    Not exactly. Based out of US, flying Delta means International Flights and hitting MQD is actually never the issue.

    Example.
    A simple round trip between ATL and SIN is USD 2,536.00 before taxes (USD 2,666.30 after taxes).
    Would have hit Silver Medallion even based on US flyers requirements i.e. with MQD.
    Two such basic trip qualifies for Gold easily as well.

    upload_2014-2-26_14-27-58.png

    upload_2014-2-26_14-12-23.png

    upload_2014-2-26_14-13-2.png
     
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  10. WilliamQ

    WilliamQ Gold Member

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    I might have missed it but will MQM be based on miles flown (20,240 in the above example) or based on fare flown (12,680 out of 25,000 for Silver) which will not make sense as it would then be similar in principle to MQD (2,536 out of 2,500) but obviously harder to attain.
     
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  11. ballardFlyer

    ballardFlyer Gold Member

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    Well crap. Good thing I burned it up.
     
  12. jetsetr
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    jetsetr Gold Member

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    I'm not sure you can comfortably, nor confidently say you have dodged a bullet. While any Diamond with a DL-affiliated cc may earn up to 13 miles / 1 USD, that doesn't mean that the redemptions, especially for premium cabin seating, will be easy to attain. If indeed award flight award redemptions will be based upon "average revenue for the route" (much like hotels move up or down in redemption categories based upon hotel RevPAR), then routes to popular destinations, like business class to Paris in summer, for example, may be much more expensive than today's "fixed mileage" based pricing.
     
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  13. jetsetr
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    jetsetr Gold Member

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    To make it easier to understand the new earning and redeeming structure, based upon the info in Randy's post, here's my take on summarizing:

    Effective 1/1/2015

    How one earns SkyPesos:
    *Earnings are similar to how one earns points in hotel programs
    Base members earn 5 miles / 1 USD
    Silver Members earn 7 miles /1 USD (represents 40% bonus over base members)
    Gold Members earn 8 miles / 1 USD (60% bonus over base members)
    Platinum Members earn 9 miles / 1 USD (80% bonus)
    Diamond Members earn 11 miles / 1 USD (120% bonus)
    *Use of a DL-affiliated credit card will earn an additional 2 miles / 1 USD (in addition to miles earned from cc usage itself)

    *Miles earned based upon base fare + carrier-imposed surcharges

    *Initially, miles earned from revenue flights on SkyTeam and other air partners will be based upon booking class, but this is still opaque


    How one spends SkyPesos:
    * FIVE tiers of mileage awards (up from current three tier structure). Similar to how hotels move up or down in a category each year based upon average annual room revenue, flight award tiers for a given route will more closely track the average revenue for the route.

    *Critically, the effect on premium cabin award pricing may see significant rises in miles needed to redeem

    *one-way awards introduced

    *miles & cash option introduced


    Bottom line:
    DL will operate its program more like hotel loyalty programs have operated. Aspirational awards will still be possible, but it will be much harder to reach the mileage balances needed to get to those awards, even if, at the top Diamond level and using a DL cc, one is earning at the 13 miles / 1 USD level.

    Clearly, this program will reward high spenders, and diminish the impact of and cost benefit to mileage runners.
     
    Last edited: Feb 26, 2014
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  14. MileCards

    MileCards Silver Member

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    Here is one cut of break-even round-trip coach airfare versus one-way mileage for the new program vs today. It assumes a $350 airfare for today's mileage earning in the Amex calculations. For a clean number, look at the non-Amex calculation. Read it as...for a general member flying a 1,000 mile flight each way, the airfare needs to be $400 to break-even with today's earning (2,000 miles).

    There are more charts here

    http://milecards.com/10171/see-the-math-of-whether-you-win-or-lose-with-new-skymiles-earning/

    Basically need to spend $20-$25k as a Diamond who flies 125k to earn the same miles under the new program

    [​IMG]
     
    Last edited: Feb 26, 2014
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  15. jetsetr
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    jetsetr Gold Member

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    ETA: Your chart has matematical errors. For example, "Gold w/Amex flying 500 miles" on a non-bonus earning fare class, under the current system would earn 1000 RDMs with the 100% bonus. So the breakeven is $100, NOT $235. Did I miss something?

    Exactly. DL has effectively raised the CPM for its MQMs and requalification tiers.

    But it also is even potentially worse, because we don't yet know what the redemption rates will be. So the rate of acceleration of miles needed to redeem for a premium cabin seat to a popular city during high season (which, from my reading, will be based upon average revenue for a route) may likely outpace the potentially increased earning rate one might attain under this revenue-based scheme.
     
    Last edited: Feb 26, 2014
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  16. MSPeconomist
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    For those with DL AmEx credit cards, I haven't seen a clear statement of whether the two additional redeemable miles per dollar are in addition to the miles that we already earn or not. For example, my card gives one miles per dollar spent (including DL airfares) and an additional mile per dollar spent on DL tickets (roughly). Are these the two miles that are part of the thirteen for DMs with DL AmEx cards or not?
     
  17. eponymous_coward
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    eponymous_coward Gold Member

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    I felt a great disturbance in the Force, as if millions of frequent fliers suddenly cried out in terror, and were suddenly silenced. I fear something terrible has happened.
     
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  18. jetsetr
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    jetsetr Gold Member

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    Yeah, I am confused about this, too. My initial read / interpretation was that by having the card (and using it to purchase tickets?), one would earn an additional 2 miles / 1 USD on top of whatever one's earning rate is (so for a Diamond, 11 + 2 = 13 miles / 1 USD), and that this was in addition to the miles earned for using the card itself.

    But the other, less generous, interpretation is also a possibility.

    I'm sure over the next 10 months, more tweaks and clarifications will be forthcoming.
     
  19. NYBanker
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    NYBanker Gold Member

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  20. NYBanker
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    NYBanker Gold Member

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    Funny how Delta now feels it is ok to announce changes to award prices ten months in advance. Didn't they say through much of the last three years that ore-announcements of such changes was unlawful? Anyone have a citation where they claimed that in writing?
     
  21. NYBanker
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    NYBanker Gold Member

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    That will perhaps be a mystery for some time...

    All of Delta's worldwide redemption charts will be updated to reflect the new options in the last quarter of 2014 and will be effective for new Award bookings beginning Jan. 1, 2015
     
  22. MSPeconomist
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    A DL official representative started a thread on FT to announce the changes. There it says clearly that the two miles are the two that we already get from AmEx for ticket purchases. So DM with a DL AmEx card ends up with 13 miles per dollar, not 15 in total (unfortunately).
     
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  23. NYCUA1K

    NYCUA1K Gold Member

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    The piece at InsideFlyer Blog did more cheerleading for the proposed revenue-based program and DL's balls for proposing it than providing clarity about what was actually going to happen...
     
  24. MileCards

    MileCards Silver Member

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    The mileage amounts are one-way but the fares are roundtrip. So today a Gold would earn 2,000 miles on a 500 mile each way roundtrip. Plus an extra 700 miles for a $350 fare.
     
    Last edited: Feb 26, 2014
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  25. DTWBOB

    DTWBOB Silver Member

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    Where even more confusion will come from (and of course I can't find it) is these 'new' pesos won't include anything from having to pay taxes on tickees. I can hear the phone calls now, I paid you x amount of money, but I didn't get x times n points where x includes the taxes, departure fees.

    DTWBOB
     
    Last edited: Feb 26, 2014
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