Wednesday, February 26, 2014

Delta Airlines announces major change to SkyMiles program

In a move designed to lure more business travelers, Delta Airlines has announced a major change to its SkyMiles frequent flier program.

Instead of crediting passengers for the number of miles flown, Delta (NYSE:DAL) will credit passengers based on the cost of their ticket for flights on or after January 1, 2015. While airlines have been offering bonus miles for Business and First Class passengers for a number of years, this change will apply to all tickets sold in all cabins.

"The move from distance to dollars represents a huge benefit to the elites in the form of lots of free tickets," Shawn Tully, Senior Editor for CNN/Money, wrote in his Feb. 26 article on the change. "The non-elites who relish flying long-haul on cheap fares, in many cases, will suffer."

Read Shawn's complete article here.

Several other accounts of this news included equally breathless commentary from so-called experts. CBS quoted Tom Parsons from Bestfares.com as saying, ""It appears that Delta is coming out and saying ... the more money you spend, the more we are going to take care of you."

Well, duh.

Frankly, I don't know why this is such a surprise. What is somewhat surprising is that it took so long for one of the major airlines to adopt this approach. Hotels have been doing it for years.

The HiltonHHonors program, for example, awards points for dollar spent, which are redeemable for future room nights. However, one's tier -- Blue, Silver, Gold, or Diamond -- depends on the number of nights spent in Hilton properties over the course of a year. Those tier levels confer additional benefits.

In real terms, that means a person who books a more expensive room will earn more points, but may not achieve a higher status if they don't travel frequently. It keeps someone who books, say, eight nights in the penthouse suite of the Waldorf Astoria at $1,300 per night from being granted the same status as someone who spends 90 nights a year in $115 per night rooms.

Miles for dollars is also how airline affinity credit cards have worked for years. Generally, cardholders get one mile credit per dollar spent, redeemable toward future travel. Delta's changes, in my view, may actually bring the two ways of earning miles closer to being in sync.

Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.



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