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I really enjoyed psychology and sociology in college. So much so I minored in sociology. I just love people and culture. I have found knowing and studying both of these has been a huge advantage in travels as well as in business over the years of my life. Interesting – but so what, you ask?
Enter Skymiles2015. I am really getting tired of folks (Hi Eric 😉 ) saying things like Skymiles2015 will be good for some. Hogwash – they are mistaken. Let me show you why the choices by our monthership are some of the dumbest moves any airline has made in 50 years.
First the company’s “idea” behind the change. They say:
“When you pay a higher price, you’ll be rewarded with more miles” – Delta.com
But the big catch is that it is only up to $6,818. After that the higher price you pay means nothing at all. The bottom line is they are saying we will love you more the more you spend with us, but only to a point. That just sounds peachy on paper but let me show you why this is just the height of stupidity and what is SURE to happen come 2015.
Elites, even big spenders, will be upset next year. I have said this before but most flyers are happily oblivious as to just what is on the way. Sure they got the company e-mails, have seen the notice on the Delta.com home page about the new program, but really have not taken the time to look because for now everything is still status quo (maybe it will not affect ME after all). Come February of 2015 they will see their Skymiles statement and start yelling FOUL! As long as American Airlines has not yet destroyed their frequent flyer program by then expect to see a BUNCH of flyers requesting status matches over at AA. Then we have the big spenders, that is those who are overpaying for tickets, that are smugly saying Skymiles2015 will be so great for them. Oh, did you all happen to miss this little tidbit?
“The updates to the 2015 SkyMiles program will not impact how you earn Medallion status.” – Delta.com
AKA there are going to be just as many medallions fighting for upgrades as EVER (unless a ton go over to AA that is). Delta was sorta smart to not yet decimate this part of the program because then the backlash would have been so much worse than it has already been at this point. So congratulations you 2%ers, you will have lots more Skymiles to spend! Let’s just hope Delta has been honest that more low level seats will open up under Skymiles2015 (but if not you at least will have more points to spend for seats, right?). And don’t think Delta is done cutting. When there is no more to be made on the rest of the 98% of us, just who do you think revenue management’s focus will change “altitudes” toward? We should ALL be VERY afraid of what is next.
Now let’s look at what Delta should have done to really effect change and what I think they will eventually do. They will change MQMs earnings over to be 100% tied into spend (and elite levels). This WILL have a huge impact and dramatically thin the medallion “herd”. The downside is they will succeed in infuriating the rest of the business travelers who really don’t care about Skymiles at all but stuck with Skymiles2015 because they DO care about status and upgrades. Then, other than the 2%ers, everyone else will be relegated to leisure travelers and be scrounging and fighting for the “best” coach seats. Upgrades will consist of exit row and aisle seats or maybe Economy Comfort seats if you are lucky (what a great name for yesterday’s reasonable coach seats for everyone). The other funny thing is doing this will have unintended consequences to Delta earnings. With dramatically fewer top level medallions, Diamonds & Platinums can then buy the cheapest ticket on the market and know they will score an upgrade (that will surely make revenue management happy).
Why do I think destruction of Skymiles is sure to happen? Delta culture! Delta has been hitting home runs for years now and making more money than ever. They can do no wrong. Every choice seems to be working great (and they quickly change the ones that don’t). Worst case they can just “park” planes if they need to and still fly 100% full. Plus, at this point, the cuts to the frequent flyer program have been tolerable or not yet come to full fruition. Also, management wise, many key people who were in place during this rise and the path they charted have moved on. Those filling their shoes must ALL think the choices were the reason for this rise and follow the same great course not knowing they are inheriting the IMPLEMENTATION of these choices that will be very different from the pre-implementation reality. Those folks in charge now will have to decide next year if flyer outrage will simply fade away like a jet stream in a clear sky and Delta numbers will continue to soar or if they need to quickly “divert” to an alternate airport and fix what is clearly a broken 2015 frequent flyer program! – René
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What about for the business traveler doing the short hauls on company paid Y-fares? I think they will benefit from this change.
@Matt – reread post 🙂
This article seems like an overreaction by someone deep in the miles and point world. No doubt many people will be hurt by this changeover but overall Delta’s team seems to have done a pretty good job running the airline and I don’t think this changeover is really going to change that. I dont know a single corporate travel maneger who intends to change travel plans due to this news and the federal GSA, the largest single purchaser of airfares in the United States, certainly isnt going to stop buying Delta tickets because of this. So while it may affect business on the margins, I think it will just be a marginal thing. One also has to wonder if American will follow suit at some point once the merger is completed.
Well said ! AA has already given me status til. Dec 2015. It’s strange to not have/care about DL status for the first time in over 10 years.
The changes *might* actually be good for me. I have it in mind to next summer do a long vacation tour from California with family of four. Close to a million SkyPesos already, will be above it by January.
So being able to setup a series of one-way awards is an asset. I could do a many-leg trip, get to East Coast, then hitting routes like JFK-KEF, then filling in with Iceland Air to England, and so on. Perhaps Paris to Washingon DC on the A380? Without having to endlessly fuss with open-jaws and stopovers to try and stitch the same thing together.
I usually flew on M class tix, and DL has already taken away the MQM bonus on that. Since then they just keep chipping away at the benefits of loyalty, so I have flown DL MUCH less and gone for the cheapest tickets, even if it meant going w/ another airline. This year, I don’t even have status. However, I still collect miles through credit card.
The mergers and resulting decreased competition allows them to more easily get away with the devaluation of their FF program. With less competition, you don’t have as many options as you used to, making the big guys that much more powerful and cavalier. It’s one of the most basic concepts of economics. The DOJ merger oversight is pointless.
We’ve already seen the detrimental effects in the form of less routes, less flights, more crowded flights, higher fares.
I think you make excellent points. Those licking their chops over the mega miles their companies and clients will be buying for them next year don’t get that delta ain’t done. No one knows what the next round of enhancements will bring. You can bet it won’t be good for customers. As a DM I resent the fact that the new program seems to diminish my medallion mileage bonus relative to other elites since the ratio of 11 miles per dollar to the bonuses of other elites is not as good as the current ratio of 125% to the bonus percentages of other elites. Maybe the strongest argument for the position that the 2015 program is a dumb idea is the fact that it was adopted by United.
What Delta does not realize is that most of us in business have to use corporate travel agencies to book our trips. Delta keeps on charging more and more for flights and will drive out most business travelers. We will have no choice but to change to another airline. The hubris of delta will be their downfall. Give me an airline that wants my business because they are desperate. Delta is flush with money right now and doesn’t care about their frequent flyers. The other airlines are focused on keeping flyers. Time for the switch. I am set up to make diamond this year with delta. I am only doing it to leverage a status match with another airline that is trying to keep me as a flyer.
If DL changes MQMs to a revenue-based formula, they’ll lose me as a Medallion. I’ll favor the new American, even if American changes its elite model as well, because its fares consistently are cheaper on the city pairs which I fly most often. At the present time, I often spend more in order to fly Delta and expect to be recognized for that atypical loyalty. Should Delta discontinue such recognition, they’d need to invent a new type of chronometer to measure how quickly I’d switch to AA.
were is the $6,818 limit coming from I can’t find it?
@Ryan – max 75000 points thus the math.
So you spend 6800 on a single ticket and you end up with 75k points… That’s definitely not the average flyer, sorry but that is not “the big deal” in this story.
The real problem is that it’s no longer a mileage rewards program, it’s a spending rewards program. It will take a long time for that change to be accepted, but ultimately we’ll all get used to it.
I for one and glad to spend as little time on an airplane as possible in order to get my upgrades. No more booking extra legs, I can now start picking the direct flights even if they cost more 😀