Delta Makes Radical Changes to Skymiles Program
Nearly a year ago, Delta Airlines Inc., announced that its frequent flyer program would have an added requirement in order to achieve elite status. The requirement announced last year required flyers seeking elite status to fly a certain amount of miles and spend a required amount of money on Delta flights within the year in order to achieve (or keep) elite status. For example, if you wanted to attain Silver elite status you would have to fly 25,000 miles and spend $2,500 on a ticket within the year. Today, Delta announced a revamp version of their mileage award program – making it harder for non-business customers to get reward miles for flying as it will be revenue based as of January 1, 2015.
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Delta Air Lines Inc., taking a page out of loyalty programs offered by smaller U.S. carriers, said it would revamp its SkyMiles frequent-flier plan starting Jan. 1 of next year so that passengers will earn miles based on the prices of tickets purchased, not the distances flown.
Delta, the nation’s No. 3 airline by traffic, is the largest U.S. carrier to make the shift, following similar moves by Southwest Airlines Co., JetBlue Airways Corp. and Virgin America. Delta, whose SkyMiles program has 91 million members, said the changes are intended to reward frequent fliers who spend more money, and that fares today aren’t correlated as closely to distances flown as they were in the early 1980s, when U.S. airlines pioneered these programs.
Under Delta’s new rules, scheduled to be announced on Wednesday, passengers with no elite status in SkyMiles will receive five miles for each dollar spent on tickets, excluding government taxes and fees. Those in the highest elite level will receive 11 miles per dollar spent. For fliers redeeming their miles, Delta will continue to award tickets by pricing them in miles, not in actual cash fares, offering different levels of availability as it does today.
Tim Winship, publisher of FrequentFlier.com, who was briefed on Delta’s plans, said, “There is no question there will be winners and losers. The losers will be infrequent, price-sensitive travelers.” Still, Mr. Winship said he thinks it is just a matter of time before larger rivals American Airlines Group Inc. and United Continental Holdings Inc. follow Delta’s lead.
References:
Carey, Susan. “Delta Plots Major Rewrite of Frequent-Flier Rules.” MarketWatch. The Wall Street Journal, 26 Feb. 2014. Web. 26 Feb. 2014.
