RealDLInsider

Hope everyone is having a great new year, and within our SkyMiles team, we have been very busy. I’ve been reading some postings over the last few weeks and from today, and wanted to share some background and potential thoughts around a few of these …

Issue 1: A posting around whether “RealDLInsider” would ever come back online based on some of the negative flyertalk feedback around the SkyChoice change.

Answer: I’ll definitely come back, and just because people have an opinion about a specific program, promotion or program change that we’ve made or are considering to make (whether positive or negative), it will not deter me from listening, reading and occasionally chiming in. In the end, that’s the point of this website.

Issue 2: In response to my last posting around suggested changes to our loyalty program as the result of any merger scenario.

Answer: Thank You! The feedback was overwhelming, difficult to absorb all in one read, but was and will be valuable. Speculation continues to run wild in the industry about various merger scenarios, and in due time, things will become public. However, in any type of merger where Delta and the SkyMiles program survive, I assure you that this airline would do everything possible to retain a program that would ensure we retain every existing customer and potentially win other airline customers over. The loyalty program generates over $1.1B annually in mileage sales at Delta alone, and drives more than 60% of total flown revenue. The numbers alone and the importance to our customers will ensure it remains a viable and competitive player. Our target is best in the industry.

Issue 3: Information was released in an email today to millions of customers, and was also issued in a posting initiated by “DLres2006,” regarding a new Pay with Miles program and a new three-tiered award structure. Wanted to clarify a couple issues and will break this into a few areas:

DLres2006 – not sure where this flyertalker is getting their information, but unfortunately, it’s not fully accurate. They mention things around minimum fares and how the program will work – and the information they have is incorrect. Just because the username assumes they are an insider, I’m not convinced they are “in the know.”

“Pay with Miles” program – as the email mentions, more information will be coming in the next two weeks, but I’ll try to provide you all an overview. The program will apply to Gold and Platinum Delta SkyMiles cardholders (which is a very sizable portion of our active database), and provides them yet another option to use their frequent flyer miles. The miles that can be used are not just those earned on the credit card, but they can use all the miles in their bank (regardless of where they were previously earned). The member can use 10,000 miles for $100 off a Delta ticket, 25,000 miles for $250 off a ticket, and so forth. For the customer who likes to use 90,000 miles toward a Business Class ticket to Europe or 250,000 miles for BE SkyChoice, they wouldn’t choose this burn option to redeem (as several of you are aware and have mentioned). However, the vast majority of customers and many millions of them in our program may not be like some of you. Instead, they have less than 25,000 miles in their accounts or use their miles toward domestic award travel only (with many of them wanting award seats in domestic markets with relatively low fares). Thus, for customers who can’t find award seats in many markets at the 25,000 mile SkySaver level, but can find fares in the $250 range, they will basically receive less restrictive if not unlimited access to a 25K award seat. Although it may seem difficult to believe, you would be shocked to know how many seats we sell in the domestic U.S. for less than $250. These customers now have access to a 25,000 mile “Pay with Miles” award instead. Again, more information will be on the way around the entire program, but again, for the customer who tries to use their currency to get 4 or 5 cents worth per mile by flying Saver to Hawaii, BE Saver to Europe or SkyChoice to Vail, they’ll see this as another redemption option. However, for potentially many millions of customers, we believe it will become a used option.

Three Tiered Award Structure – more information will be released on this later this quarter, but as I’ve hinted to in previous statements, the SkyChoice change that was made back in December was only interim and three-tiers was always the plan. This new award structure that has been in the works for 12 months, will give customers more choice, greater access to seats at more reasonable levels, and by retaining the “combinability” option of award levels, will create a program that matches award levels to availability.

All in all, I’ve mentioned before that in 2008 our plan was to provide customers more options to use their frequent flyer miles and greater transparency in finding award seats. The Pay with Miles program set to launch soon, will provide a large population of customers more choices and options in using their miles, the three tiered-award structure will provide everyone multiple ways and levels to use their miles, and the online award calendar expansion will give them immediate access to all of this at the click of a mouse. By the end of this year, our best customers will have the ability to redeem a Saver, Choice and/or a third tier award, an award at our online auction, merchandise or an experience at Medallion Marketplace, or in our new Pay with Miles program. The level of interest will vary for each of these depending on how a customer wants to use their miles, but choice and options is what we believe in. Also, having all of this available online makes it simple, easy to find and more user-friendly.

Enjoy the next few weeks and keep posting. If you keep writing, I’ll keep reading.

Jeff

vasantn

Well, I was wrong in saying that you wouldn't be back (but I did change my opinion further down in that thread). Welcome back and I look forward to hearing more.

RSSrsvp

Jeff, we will all look forward to your update.

BTW, it is a shame that a few FT'ers had to eat crow.

Gargoyle

We knew you'd be back. We just hope you'll come back again in this thread in a couple days, to directly answer the main points which will be brought up by this extremely perceptive group of flyers.

OK, confirmation- the company values miles at 1 cent per mile, and for the average customer that is also the valuation. However, FT'ers seek better. (4 or 5 cents per mile).

How about instead of a 3 tier award system, institute a 4 tier system. The fourth tier is open only to medallions who are active FlyerTalkers, and the 4th tier Pay Per Miles redemption will be at 3 cents/mile. (a nice compromise, and note my post in the other thread, that's in line with your SkyTeam partner AZ's redemption at 2.7 cents/mile).


And one important question- Please answer this. If we use Pay Per Miles, do we still earn MQM's?

me4yankees

I am a "US Airways refugee" and I want to thank you for reading and contributing to this forum. I enjoyed reading your article in Delta Sky Magazine. I am very happy to be back with Delta and Sky Team!

geoflyer

Thanks for clarifying some of our questions Jeff, especially on the pay/miles option. I appreciate the nuggets of reliable information you offer, and especially the cascade of wild speculation and angst in the posts that follow. My favorite spectator sport.

AndyTLe

Thanks for the update. You don't address your most loyal flyers or show how this isn't a futher devaluation of the program.

My problem is you kind of contradict yourself. The large majority of those holding Gold and Platinum DL AMEX are also very frequent flyers and high spenders. Most of us accumulate more miles than we know. So who has a DL AMEX and has less than 25,000 miles?

Erasmus

Here's hoping that this mysterious third choice has decent availability at recent redemption levels. As it is, this multi-year PM and his multi-year GM wife have flown exactly zero miles on DL since the SkyChoice change, while flying well over 100K on UA. I'd love to come back to DL, but we will continue to vote with our feet.

(Did I mention we have two business-class saver (90K) tickets to PEK the week of the Olympics with our UA miles? I shudder to think how many miles that would cost on DL, if indeed it ever becomes possible again.)

rylan

A couple comments/feedback:

I hope the 3rd tier isn't a super miles-gouge level.

Not earning mqm/skymiles on the pay with miles option is really crappy since a lot of the time we'd still be paying something. It should be proportionate to the amount actually paid... for example if you use $250 worth of miles and still pay $250 for the remainder of the ticket, then you should get 50% credit MQM and miles earned.

soitgoes

This post was as close as Jeff has ever come to addressing issues raised on FT at least semi-directly in a timely manner.

rylan

Yes, it was very nice to see his post with the info included. I hope he communicates with us more often.

obscure2k

Welcome back and thanks for the updates.^

Beckles

How is adding options to the program, even ones we may not see as useful, possibly a devaluation?

Maybe Jeff could share exact numbers, but I personally do not think "a large majority of Gold and Platinum DL AMEX" members are also frequent flyers. Many people I know who use airline affinity cards are not frequent flyers, they're saving up for an award every several years.

mersk862

Agree with this assessment. A lot of people I know use the miles to supplement their once-or-twice a year flying, which might earn them 5000-10000 miles a year max (not a whole lot at all). At that rate, it would take multiple years to see any benefit to using miles (it's not like us FTers, where as a Silver I earn 50,000 RDMs a year from flying). They use their cards to maybe make it possible to earn a free ticket on a more frequent basis so that if they take 2 trips a year, they might be able to burn miles on one trip every 2 years or so. There are a lot of affinity card holders out there and I would guess that a lot of them aren't Medallion (for many of them, I doubt they even know what Medallion is). Just a guess from my view and experiences though.

AndyTLe

Why on earth would you spend money on the annual fee for the DL AMEX if you're only getting a few thousand miles a year? The fee for the Platinum DL AMEX is $135 per year. To "breakeven" you would need to spend at $13,500. So what use is the card to those that have it and don't fly?