Point Me to the Miles

Delta Makes More Unfortunate Changes

BACKSTORY
Back in March, I posted about the rumors of Delta overhauling their SkyMiles program into a revenue-based system.  I argued that Delta miles are already referred to as “SkyPesos” for a reason, and felt that this policy would be-humanizing because you passengers would become the rate they pay.  I was then humbled when I received kudos on FlyerTalk for this post.

In fact, it may be helpful to read the FlyerTalk thread my post, and Brian’s post to understand the major disadvantages of such a system.

DELTA’S CHANGE
Well, I am quite frankly afraid Delta may be taking another step down that road.  As of September 1, 2012, special or so-called “unpublished” fares will earn miles at a reduced rate, (see below) for both redeemable and Medallion Qualifying (elite) miles.  These fares are usually purchased through an agent, a third party, (i.e. Hotwire) or are part of a group rate.

Unpublished Mileage Earn Table

Examples of Fares Earning Reduced Miles:

• Student fares
• Consolidator fares
• Flights included as part of a cruise package
• Discounted tour packages
• Group fares

Also, special and unpublished fare tickets will not be eligible for bonus miles or MQM promotions.

Fares Still Eligible for Full-Mileage Accrual Include:

• Corporate/Government Fares
• Sport/University Fares
• Purchases made through Delta Vacations
• “Unpublished” fares in the Asia Pacific Region

TERMS & CONDITIONS
Delta’s policy goes into effect September 1^st, for travel booked on or after this date.  So if you booked unpublished travel now for September or later, you would still accrue mileage on these fares at the normal rate.

According to Johnny Jet, Delta will implement this policy as such:

“Unpublished fares, when ticketed, will be matched with an account’s ticket designator, resulting in the adjusted mileage accrual rate.”

The full Terms & Conditions of Delta’s new policy can be found here.

ANALYSIS
I making this move, Delta may be ultimately be taking a step in the wrong direction.

First, Delta is losing something quite unique about their program:  Unlike United and American Airlines, full mileage could be accrued on these special fares.  While Delta has been lambasted for their broken award booking engine, declining number of meaningful partners and cheap miles, it was a unique selling point for the program.  I guess all good things must come to an end.

Second, making earn rates dependent on the fare (and by extension cost) is the first step in implementing a revenue-based loyalty system is having.  Which is exactly what Delta is doing in this case!

Sure, unpublished fares form a small subset of Delta’s inventory, but who’s to say they would stop here?  All loyalty programs are starting to look for creative ways to get miles off of their books, and giving out less is a good way to start.

NOT JUST DELTA
And finally, I don’t think this is just a Delta problem.  The fact that Delta is not the first to adopt this policy is a bit concerning.

I have heard rumors that much of the airline industry may be headed to a more revenue-based system.

Airline loyalty programs started out in the 80s as a marketing strategy to fill planes. Since then, airlines de-regulations, mergers, the ease with which can earn award miles have pushed airline capacities to the max.  Naturally, award capacity controls had to be introduced to keep the airlines profitable.

But this still doesn’t change the capacity, and the economic downturn is driving airlines to squeeze out every penny possible.  Now I will admit I am no economist or business analyst, but it seems that one of the solutions to doing so would be to limit award tickets by making it harder to redeem.  In other words, there is a higher cost, because of greater demand.

Therefore, it seems fully plausible to expect three outcomes:  Devalued award charts, decreased earning potential—at least for flight activity, making long-haul award more expensive by pricing them based on how much the paid fare would be.

For example, a First Class award ticket valued at $15,000 that once could be redeemed for 100,000 frequent flyer miles might require 1,500,000 miles in a revenue-based model.

CONCULSION
The fact Delta and others have taken the first step toward a revenue-based system should cause some apprehension.  We are already seeing this full-blown revenue-based model from programs like Virgin Elevate and Southwest Rapid Rewards, and unfortunately many of the other airline programs may soon follow suit.

Tip of the hat to JohnnyJet and ThePointsGuy.

Be Nice: Delta May Prevent the Rules From Over-Ruling Common Sense

A while back I wrote about Delta’s new TV ad, despite frequent criticism about their loyalty program.  I especially liked the tagline “Predict the unpredictable, anticipate the unexpected, and never let the rules overrule common sense,” because from my experience with them, they do a fantastic job of living up to this creed.  And the other day was no exception.

I had received a mileage award, but felt that Delta hadn’t really honored their side of the deal in exchange for my hard-earned SkyPesos, and what I was getting was screwed.

So I called about an award re-deposit as I felt like Delta was slightly to blame, and the Delta agent simply told me there may be a change fee, before putting me on hold for a minute or two.  She then came back and asked about my credit card.

Now, if push came to shove I would have paid the $150 (as a Gold Medallion–maybe next year I should go for Platinum) in order to get my miles back at a very favorable rate.  But I figured I would at least plead my case and ask for a fee waiver.  I summarized that I wasn’t getting what I thought I would be, and was turned over to a supervisor.  I explained to him my full situation, and despite stating Delta’s award redeposit policy and a little bit of its rationale (being able to sell those seats), he granted a one-time exception.

Why do I share this tale of near-missed ticket changes?  I think the thing that helped most was just being nice and polite.

I’m a firm believer in the old adage that “You catch more flies with honey than you do with vinegar.”  So I was very courteous and polite in explaining the situation and my side, despite the fact that I felt like Delta wasn’t living up to it’s side of the bargain.

I mean if you are a corporation or supervisor, who are you more likely to grant exceptions to:  Customers who are reasonable and polite, or someone who lambasts them with vile words and foul language?  I know some people that fall into the latter category, and it usually doesn’t work in their favor.  And so I think if I had tried a much “harder” approach and yelled and screamed, he wouldn’t have been all that motivated to help me out, let alone even desire to cut me a break or help me out.

So while it never hurts to ask, may you please do so ever politely-

http://fieldofburch.com/2012/03/07/a-tale-of-two-delta-videos/

Delta’s Possible & Unfortunate Changes

Delta is rumored to be considering making quite drastic and horrific changes to its mileage program, per this FlyerTalk post.  The changes would start within the next month or two, and take full effect by the end of the year.

The proposed roll-out would work as follows:

Announcement

My Thoughts

So essentially mileage earnings from flying would be a largely distance-based formula, to more of a revenue-based format.  And to some extent, Delta already has this in place with paid first and premium fares(specifically M, Q, H, and K fare codes) earning a 50% mileage bonus over regular fares.

Where I think this hits the hardest is you as a passenger, and by extension your elite status, become defined by the fare that you pay.  So flying around on cheap T and E fares would be much less advantageous for earning status, in addition to the lack of advanced seating on said fare bases, according to Ben.

Plus, this devalues the use of miles for aspirational travel.  The amount of mileage required for award redemptions would be based on the cost, and thus would be come an inapropriatee and (cheap) replacement for replacement for money.

Conclusion

Overall, I think these changes would reflect poorly on Delta, especially given the inability to redeem for international first class, award booking difficulty–both of which have given them the name “SkyPesos.”

Hat tip to The Points Guy.