SkyMiles massive upcoming change?

Discussion in 'Delta Air Lines | SkyMiles' started by autolycus, Mar 21, 2012.  |  Print Topic

  1. autolycus

    autolycus Gold Member

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    OK, so I've seen a growing number of references to some potentially HUGE changes to the SkyMiles program later this year. I understand that there's a lengthy thread on TOBB discussing it, but I would like to encourage the start of some discussion over here so that the substantive content is here too--we are all trying to create the best community we can over here, right?

    So, I ask that people respond with several different things, if they're so inclined:

    1) What details of the rumored changes have found their way to the grape vine?
    2) What are your thoughts on the changes? Will it kill Delta? Will other airlines follow suit?
    3) What are you going to do to plan/prepare for the rumored changes?
    4) What will you likely do moving forward after the changes? Switch airlines? Switch CC spend? etc.


    The most detail I have seen is on The Points Guy's blog. From that, I'm a bit nervous about the possible changes. I am primarily a leisure traveler. I fly maybe 1-2 round trips a year for work. I am clearly not someone who Delta would be targeting as the biggest beneficiary under ANY loyalty system, but I am a bit hub-trapped in Atlanta and am generally very supportive and loyal to the airline. I will be a big loser under a revenue-oriented program.

    If the change is to a system that is similar to Southwest's Rapid Rewards, then my inclination will be to start treating Delta exactly like a treat Airtran: I'll fly them only if they're the cheapest option, and I won't put forth any effort to gain miles/points through any means other than what I get flying with them on those cheapest fares. I'd probably move entirely away from any Delta-branded Amex card and likely away from MR as well, unless Amex can add another big transfer partner.
     
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  2. rwoman
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    rwoman Gold Member

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    Hasn't this been discussed ad naseum on FT? IIRC, it was a rumor thread from another rumor thread on a.net...
     
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  3. LarryInNYC

    LarryInNYC Gold Member

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    My opinion (and this is the way I think it is and will be, not the way I want it to be!):
    1. Frequent flier programs have gotten far away from the purpose the airlines conceived them for (rewarding high value customers) and we are going to see many adjustments to bring them more in line with their original purpose.
    2. Even if these changes don't happen at Delta according the rumored schedule they are still coming.
    3. Delta is only the first-mover in this area; others will follow in the coming years.
    4. Mileage accrual will become more revenue-oriented with either or both of the following happening: accrual will be directly based on revenue / profitability of a given ticket and / or accrual will be based on fare class, with discounted fares earning only a fraction of the normal miles. This will lead to the near-elimination of mileage running opportunities.
    5. Mileage redemption will also become more revenue-oriented, with the costs for premium travel redemptions going up substantially.
    6. The mix of seating on planes will change to make it more likely that every seat above the basic economy product will provide marginal revenue to the airline and the number of non-revenue upgrades will go down. There will be larger "premium economy" cabins or sections and smaller business / first sections on those routes that often have empty seats or front-ends that are populated with free-upgraders.
    7. The real frequent fliers among us may actually benefit once the hangers-on (like me) are eliminated since competition for the (reduced) prizes will be lower.
    8. Credit card mileage accrual will remain since that's a straight profit to the airlines, but the value of the miles for redemption will decrease to something approximately equal to what the credit card companies pay the airlines.
    Basically, the programs have gotten fantastically generous and in the era of full planes and reduced profitability they're unlikely to continue in their present form.
     
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  4. autolycus

    autolycus Gold Member

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    Probably, but I was hoping for a filtered, more intelligent, more pleasant, and more direct-to-the-point version of the discussion here. Besides, that thread is up to 41 pages!!! I don't honestly have the time to read through that much to pick out information and thoughts that can be presented in just a few posts here. Or put another way, I like to read the opinions of people here since I spend more time here so I know y'all better. I really don't have the time to try to pick out where you, rwoman, have posted in that 41 page thread, but I do read a lot of what you post on milepoint, and I do enjoy and learn from all of it. As an aside, thanks for all your contributions here! :)
     
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  5. rwoman
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    rwoman Gold Member

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    I have not bothered contributing the the fodder there, either. There's something about 3 degrees of rumor I do not have an appreciation for. ;)
     
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  6. autolycus

    autolycus Gold Member

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    And I completely understand that attitude. So I'll put you into the category of: do not care about the rumors until there's an announcement and are doing nothing to plan for the possible changes at this time. :)
     
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  7. LarryInNYC

    LarryInNYC Gold Member

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    I'm in favor of this thread:
    • I don't read FT.
    • I think the degree of specificity especially at TPG makes this a rumor worth talking about.
    • Even if Delta doesn't make these changes as rumored, I think the more general subject of airlines moving to align their frequent flier programs more closely to revenue is a timely and interesting subject.
     
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  8. mtkeller
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    mtkeller Silver Member

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    I'm basically ignoring the other two a.nut threads over on TOBB, but the devaluation thread has contained enough information (in particular job postings DL has made or IT contractors have made referencing work for DL) to suggest that some major negative changes are afoot.
     
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  9. rwoman
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    rwoman Gold Member

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    One thing that amuses me about this if DL moves toward a revenue-based model is the outcry that it's so different, whereas it is actually MORE like ST partners, especially AF/KL than not.

    :)
     
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  10. rwoman
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    rwoman Gold Member

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    Of course the nature of most discussions does tend to differ. :)
     
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  11. Ed Ip

    Ed Ip Silver Member

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    I am primarily a leisure flyer with less than 5 business trips each year so my opinion/thoughts on the topic is likely different from the road warriors...

    I don't have a problem with DL going to a rev based mileage accrual like AA (fare vs. percentage of miles earned) because after all, they are in the business of making money. It is not great but I understand. However, I think I will have a problem if the award level is rev based as well; Higher spending to earn miles that are even harder to use is not "rewarding" anyone but DL. Handing out miles like candy but redemption rate is very high or Hard earn miles with low redemption rate, they have to pick one. High-high is a killer.

    Would I fly with someone else instead? Hard to say but my gut say no. I find DL fare is the cheapest (for now) to most places we want to go to and we can easily justify the price differences with the benefits of having the DL AMEX or having low-level elite. For example, another major airline may be $50 cheaper each ticket but we get free baggage on DL which is a wash. I might ditch the DL AMEX anyway in the near future since we seem to be able to maintain Silver without much trouble.

    Like mtkeller said, there are a lot of evidence to support "something" is coming but will take the wait-n-see route.
     
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  12. autolycus

    autolycus Gold Member

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    I am not familiar with their programs, including even Flying Blue, of which I'm technically a member. How are their earnings and redemptions structured? Are redemptions a nearly-fixed ratio of points per $ like Southwest? Or is it still a fixed table like Skymiles and other US legacies but with more of a connection between revenue fare classes and award redemptions?

    I completely understand that the international norm is that the cheapest economy tickets get you less than 100% of the mileage in RDMs and sometimes nothing at all. But the details of this rumor seem to indicate that it'd be 100% revenue-based and would not include mileage at all.

    Incidentally, I voiced my opinion to DL through their web complaint form. The response, which I wasn't expecting at all, was somewhat amusing because of how clear it is that Delta has real people answering complaints and not a robot. :) See especially the 2nd paragraph as quoted below.

     
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  13. rwoman
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    rwoman Gold Member

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    Right, with FlyingBlue, it's more of an accrual of miles than a redemption. Many of the lowest fares earn a fraction of RDM and Elite miles vice the SM program where we typically earn at least 100% RDM/MQM. As far as redemption, it seems like there is less complaining about SOME of the European programs, but if it's harder to earn the miles in the first place...that will naturally have an impact on redemption availability.

    I would speculate (guess I'm getting sucked in ;)) that it's possible DL could try to follow the FB model in order to further align the programs...sort how they did so with fare buckets last year.

    :)
     
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  14. mtkeller
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    mtkeller Silver Member

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    I think rwoman has missed the bit about fare-based award ticket redemption, which is totally unlike any other carrier with a long-haul international network that I know of. Earnings in FB are like you suggest, with the LUTE equivalents earning 0% or 25%, HQK equivalents maybe 50%, etc., and I could see DL doing this. I wouldn't like it, but it's definitely the direction things are heading. FBATR, however, could be awful if it's like WN's program. FB's burning scheme is like DL: 50K TATL in Y (vs. 60K with DL), 100K TATL in J, etc. but with fuel surcharges collected. Honestly, I'd rather see fuel surcharges collected on all award tickets before something that links the number of points needed for a ticket to the cash cost of the ticket. Aspirational redemptions totally vanish in such cases for all but those who spend all their time flying in international premium cabins for work, and I'm not sure what an aspirational redemption would be for someone like that, maybe flying to a different part of the world than where they normally go for work and being able to fly an Asian carrier's F instead of a US carrier's J?
     
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  15. LarryInNYC

    LarryInNYC Gold Member

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    Which is probably exactly what the airlines want to incentivize and recognize. Presumably they'll still be plenty willing to sell miles to credit card companies although that will be less of a bargain if the redemption rate for Europe in business class is based on the actual fare of the ticket.
     
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  16. rwoman
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    rwoman Gold Member

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    To clarify...I've definitely missed something (perhaps by passing on the FT thread)...it sounds almost like Pay with Miles?
     
  17. DiverDave
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    DiverDave Gold Member

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    There have been rumblings over the past year about focus groups and negative changes on the way. Given the source of the information in the thread and the job postings, I consider it quite credible.

    David
     
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  18. autolycus

    autolycus Gold Member

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    Here's a quote from the first page of the FT thread, based on info from a source within Delta, trusted by the poster--I do not know the poster, don't know many non-milepoint posters over there, so I am not vouching for their sources.

    The FBATR is what I think is really worrying people, like me.
     
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  19. rwoman
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    rwoman Gold Member

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    Wow...looks like a PITA...
    In other words....empty our SM accounts now...and plan for less-than-awesome things in the future...
     
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  20. autolycus

    autolycus Gold Member

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    Maybe so. Hence me starting this thread. :)

    There is always still the chance that this will be an additional redemption method, but who knows.

    So mtkeller, DiverDave, and anybody else who may have actually read through all 41 pages... what are the big highlights/lowlights of what has been discussed over there amongst the littany whines?
     
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  21. MSPeconomist
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    MSPeconomist Gold Member

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    I've read the big thread on TOBB, although I've posted very little and nothing of substance in it.

    My own personal speculation is that I can see a business rationale for unifying inventory management of revenue and award tickets, perhaps by charging miles based on what fare class is available. In the current system, there seem to be a lot of cases of empty planes but no low award tickets. I just hope the enhanced elite inventory feature is retained. I also would see a rationale of continuing the practice of releasing additional low inventory late when purchased tickets cannot meet the advance purchase requirements of deeply discounted fares as a way to move those seats without cannibalizing revenue from purchased tickets.

    I could also envision DL trying something like the UA trial balloon with fairly minimal spend requirements for elite levels, IIRC $2000 for Silver, $4000 for Gold, $6000 for Plat, and $8000 (or was it $10,000?) for 1K. Alternatively, DL could say that sufficient spend translates into elite status regardless of MQM and MQS. If the thresholds were set high enough, it could mean that nothing more than elite handling in IROPS is being given to purchased FC and BE tickets on balance, just some bling beyond saying that all FC and BE is SkyPriority and giving such habitual purchasers the secret DM phone number, etc.

    Personally I hope DL doesn't go back to a fuzzy invitation only White Envelope program as I appreciated the transparency and fairness when DM was started just postmerger.
     
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  22. MSPeconomist
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    MSPeconomist Gold Member

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    THE FUTURE IS HERE?

    I've been saying for a while that I suspect DL is already creating multiple internal tiers on DM, sort of like the rumored seven levels of PE under NW. Others have reported that DL has a sort of secret HVC score on us taking almost continuous values.

    Personally, I've had three experiences this month that in retrospect make me think that perhaps DL is accelerating this program. OTOH, perhaps there are significantly fewer DMs this year and hence we can all get more and more individualized attention.

    Data Point #1. All coach CRJ, almost full with mostly tech savvy passengers. I picked an exit row seat and the preferred seat next to it stayed vacant. I wonder whether it could have been blocked at the time preferred seats became available to everyone at OLCI as I find it hard to believe that no one without a seat selected it, not did anyone move into it at OLCI. This was a flight with every seat taken in the last several rows. Why didn't someone try to be assigned the nice exit seat next to me during the last 24 hours before the flight? I don't think much about this at the time, but in light of the next two data points, I suspect that the seat was blocked off. If this happens again, I'll try to view the seat map when not logged in to check.

    Data Point #2, deliberately vague. IROPs happened and DL screwed up badly, although other passengers, perhaps less elite, in similar situations came out well. They couldn't totally fix it without being unfair to someone else but I did receive very nice attention from a superredcoat and extremely generous compensation that was costly for DL. My situation also delayed the flight.

    Data Point #3, again deliberately vague. A DM phone agent volunteered (without my daring to ask or even hint) to do something amazing that the fabled former UA GS and AA EXP/CK agents sometimes are willing to do and it worked.

    Contrary evidence. My last TAPC flight was the only time I can remember that the purser did not go around and thank all the DMs in BE, not did any FA do anything similar. It wasn't a great crew; I would use the word indifferent to describe it with people preferring to do the minimal amount they could and not seeming at all to like their jobs. Very disappointing and it emphasized to me that the people matter more than the aircraft: hard product doesn't make up for soft product.
     
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  23. rwoman
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    rwoman Gold Member

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    Admittedly, I'm a relatively "cheap" DM, although I do hit 125k+ BIS.

    On two of my TATL's last month, I suspected they blocked the seat next to me...you never know, but it did seem that way...SC agent reiterated I'd be by myself. Prior to EC, the SC in ATL (old BE lounge) voluntarily blocked the seta next to me for flights to LHR that were not completely full.


    Fortunately, no IROPS ... yet...


    For my TATL's this year, it's been a mixed bag...some very good and others, as you stated, indifferent. Of course, there were a lot of stand outs in 2011, so my expectations are pretty high and I notice when it does not happen. In J, I think it's happened each time - the last time was JFK-CDG, and the purser said, "Wow, you must fly a lot..." with a smile. I've even had them come back to the Y cabin and thank me for my business. DL has some fantastic pursers out there!! :)
     
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  24. MSPeconomist
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    MSPeconomist Gold Member

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    I agree in general with your comment about DL pursers, but IMO there's one guy who should have been fired a long time ago. I also once was on a flight where the purser seemed to be making it tense for everyone. I asked a FA whom I know well about this later and the FA agreed with my assessment and said that this was usually the case with that purser.

    More recently, except for my last flight and I really hate to say this, but I've been having much better experiences on the 777 with DTW rather than MSP based crews. The DTW crews have had more 777s and for longer, so they seem more comfortable and efficient with the aircraft. Also, and this has driven me nuts on every nonstop 777 flight I've taken to and from MSP, they insist on using the bins directly above and more generally around my favorite seats for their storage of galley equipment. I do not want to be awakened by a FA retrieving tablecloths for breakfast, nor do I wish to be inconvenienced by FA personal items such as purses and luggage over my seat. This especially matters on the 777 because one must step into the slightly raised floor area around the seat and almost lean up against the flat bed to reach the bin. This in an aircraft that clearly has one bin for each seat and IIRC they are even labelled that way, although one could interpret it as simply that the seat numbers are located on the bin doors.
     
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  25. DHalltheway

    DHalltheway Active Member

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    Basically, the fear of most FT-ers, including myself: is how will this affect award redemption in the long run?

    The model most assume that will be used by DL is something similar to WN and/or B6 FFP model.

    If DL does push this through, that means that you will basically earn award ticket at fixed redemption rate vs your total spent. In lay man terms you will earn rebates of 5% and probably more the higher the tier level you achieve.

    Some HVC are for this idea, some are against this idea. Then you also have someone calling out all the DYKWIA.
     
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