Delta to begin awarding miles based on ticket price

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Earthquakes are getting more common in the frequent flyer world.  As recently as a few years ago, all we had to worry about were occasional benefit changes and small increases to the amount of miles needed to redeem for tickets.

And to think we used to complain back then!

Today Delta Air Lines has initiated a shift that many insiders long thought was coming.  Delta’s SkyMiles program, which I’ve gone on record calling the worst large airline frequent flyer program, will soon award miles based on what you pay for your ticket, not how many miles you fly.

This is not unprecedented. Newer, discount-oriented airlines such as JetBlue, Southwest and Virgin America also reward their frequent flyers based on how much they spend.  And it is for precisely this reason that these programs are less to your advantage than the legacy airline programs run by American, United, US Airways and – for now – Delta.

Many of us thought that after last year’s implementation of spending requirements for elite status (by Delta and United) and a massive mileage devaluation (by United) the airlines might leave us in peace for a year or two. Think again.

Delta shifts the landscape

Here’s what you need to know about Delta’s changes:

  • They are effective from January 1 of next year
  • Flyers will earn between five and 11 miles per dollar spent on tickets (varies depending on elite status, if any)
  • Delta will expand its redemption system to five tiers from the existing (and already confusing) three
  • One-way awards will finally be possible using Delta miles (assuming you can find award space, of course)

The people most hurt by these changes will be those who fly long distances on relatively inexpensive tickets.  For instance, last week I flew from Portland to Europe, earning about 22,000 miles (with my elite bonus) on a $1,000 ticket.  This would be reduced by half under Delta’s new scheme even if I were at their top (Diamond) level.  Non-elite members would earn a whopping 2,500 miles for a roundtrip flight to Europe.

Short-haul flyers on expensive tickets and people who routinely pay for business or first class may benefit a little bit.  But with Delta’s miles already nearly impossible to spend at the saver award level, this is a final nail in the coffin for Delta SkyMiles.  It is a program to be avoided.  If you must fly Delta, I recommend posting your miles to the Alaska Airlines Mileage Plan or a SkyTeam partner.

Important open questions

  • As yet unclear is how these changes will impact Delta awarding miles to partner airlines.  My flights to Europe last week were on Delta, but were posted to my Alaska Airlines account. Will Delta continue to award miles to partners based on distances flown?  This is a consideration not just for us Alaska Airlines members, but also for all of SkyTeam.
  • If there are five redemption levels, what constitutes a “saver” award?  This also is a big issue when using a partner’s miles to book Delta flights.  Delta is already unique in having a three-tier system.  Adding two more tiers increases complexity and leaves open questions about how to redeem partner miles for Delta flights.
  • The most important question is if other programs will match this move or not. I expect that United will, since CEO Jeff Smisek would run across an active runway to pick up a quarter. American is the big open question.  They have yet to match the spending requirements or devalue their miles.  We won’t know AA’s strategic decisions about its program until the new, post-merger AAdvantage program is announced sometime late this year or early next.

Contrary to what some bloggers might be saying, the game is definitely not up. Remember that this is a competitive marketplace, and that most airlines actually make money from their frequent flyer programs. SkyMiles might be leaving the game, but that doesn’t mean the game is over.  Stay tuned.

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Ryan has been a travel expert for more than ten years. His journeys have taken him to all six inhabited continents, including living in the Middle East and backpacking across Australia, Asia and Europe.

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