One More Thing Not To Copy Delta On

 
Old Jul 30, 08, 9:54 pm
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One More Thing Not To Copy Delta On

I hope CO doesn't follow this trend that Alaska and Delta have moved to in their mile redemption programs. What say all of you?

From the NY Times -

"Delta Revamps Its Frequent-Flier Program
By MICHELINE MAYNARD
Published: July 31, 2008

Delta Air Lines on Wednesday became the first major carrier to revamp its frequent-flier program, introducing a three-tier system that will require as many as 60,000 miles for a last-minute domestic coach ticket.

The changes will take effect in early September.

The move comes a day after Delta doubled, to $50, the fee it charges for checking a second bag and follows an earlier decision to impose a fuel surcharge of up to $50 for booking a ticket using miles.

Tim Winship, editor at large at SmarterTravel.com and a specialist on mileage plans, said it was too soon to tell whether other airlines would shift to three-tier mileage systems. But he was concerned that travelers would have a more difficult time booking award tickets.

“The real question is, what miles will people pay on a round-trip basis to take the trip they want to take? We don’t know,” Mr. Winship said. “Certainly, the world doesn’t need any more complexity when it comes to frequent-flier programs.”

Airlines are taking a variety of actions to generate revenue, imposing charges for checking bags, booking tickets and selecting seats.

Alaska Airlines announced a similar three-tier program last week that will take effect in November, but other big airlines have not yet made major changes to their programs.

Previously, Delta offered frequent-flier tickets for domestic coach travel at either 25,000 or 50,000 miles. Under the new system, travelers will need 25,000, 40,000 or 60,000 miles, depending on when they book their ticket, and where they are traveling.

Delta reinstated a feature called “last seat,” which allows a frequent flier to book any remaining seat on a plane, whether or not it is designated for a member of its mileage program.

These seats require 60,000 miles for domestic coach travel, and 100,000 miles in first class, the airline said. Delta first offered the feature in the early 1990s, but discontinued it in December.

Jeff Robertson, the managing director of Delta’s SkyMiles program, said the number of miles issued by Delta had grown 24 percent from 2004 to 2007, but the number of seats available on its planes did not increase.

“The capacity is just not there,” Mr. Robertson said.

Up to 80 percent of Delta’s award tickets are issued for domestic travel, and most are not issued at the highest levels, Mr. Robertson said. “But you have some customers who say, ‘I want the last seat, and I’m willing to give you 60,000 for that.’ ”

Under the new system, a basic coach ticket to Europe will cost a minimum of 60,000 miles, 90,000 or 125,000 miles for the last seat, compared with 50,000 and 100,000 in the past.

A premium class seat to Europe will require at least 100,000 miles and as many as 350,000 miles, compared with 90,000 to 250,000, but that old maximum level did not guarantee the last seat, Mr. Robertson said.

Details are available at http://www.delta.com/skymiles/ about_skymiles/skymiles_ program_updates/index.jsp# upgrades."

http://www.nytimes.com/2008/07/31/bu...1delta.html?hp
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Old Jul 30, 08, 10:21 pm
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Thumbs down

Does this really surprise anyone?

Seriously.

DL's been happily selling their currency - SkyMiles - to partners and now their having to pay the price. My bet is their having to too many EasyPass (SkyChoice) awards being redeemed and are noticing serious revenue erosion as a result (never mind the fact the #%$ sold the miles in the first place for revenue - that does not count ).

You see airlines can only offer so many last-seat rewards (aka EasyPass in CO land) before something has to be done. As capacity controls don't apply to such rewards something else has to control the redemption rate - and that means a higher threshold. And when DL bent over for partners (e.g. Amex) and the partners subsequently showered gobs and gobs of miles to the membership at large the traditional barrier to capacity free rewards - and again that's a high redemption threshold - was compromised.

Suddenly more and more people found they have enough miles to redeem SkyChoice awards, and as not everyone's a FT'er, they choose the dates they wanted, paid the premium for a capacity free award and DL suddenly realized something had to be done as the thresholds to capacity free awards had to be maintained.

Hence rates go up.

DL, you can't have your cake and eat it too -- oh and you might want to review the concept of the goose that lays golden eggs too, assuming it's still alive.

Last edited by J.Edward; Jul 30, 08 at 10:28 pm
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Old Jul 31, 08, 5:26 am
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They've been working on this for a few months now, so it isn't surprising. And AS is already following them down this path (though the article implies that AS was first).

Over the past 2 years CO has increased rates on EasyPass J seats to Europe and Asia, as well as domestic F requirements. They haven't been quite as bad as DL is with this move, but it isn't all that much different. At least DL finally put back last seat availability.

Last edited by sbm12; Jul 31, 08 at 5:47 am Reason: added link
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Old Jul 31, 08, 8:22 am
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As fares increase does the value of miles. I don't like this move by DL for many reasons. Mostly though, FF are already to complicated. Wouldn't they actually save some money by simplifying them?

I think this is DL way of taking additional seats out of reward buckets and forcing higher mile reductions.

It maybe time for airlines to value milies in BIS as premium milies with less needed for rewards then the ones they sell.
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Old Jul 31, 08, 8:24 am
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Originally Posted by otralot View Post
It maybe time for airlines to value milies in BIS as premium milies with less needed for rewards then the ones they sell.
It's nice to think like that, but in reality, they need to value the areas where they make the most money.

Presently, I would guess the FF program likely makes them more money than running the airline.
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Old Jul 31, 08, 8:47 am
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We've danced around it, but no one has said it...

Will CO Match????????????????????????????????????????????? ?????????????????????????????????????????

Delta needs to ask all the African countries who have decided that the solution to their problems is to print money, how that has worked for them...

Last edited by colpuck; Jul 31, 08 at 9:13 am
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Old Jul 31, 08, 10:29 am
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CO better not match. They've already got a sh*tty redemption program. DL = . If CO is headed towards DL, which I doubt, because they are going into *A, then I'm going back to UA
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Old Jul 31, 08, 1:04 pm
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Originally Posted by channa View Post
It's nice to think like that, but in reality, they need to value the areas where they make the most money.

Presently, I would guess the FF program likely makes them more money than running the airline.
I don't think they make more money but they generate cash. Clealry all milies the seyy come with the liabilty of actually providing a seat sometime in the future to be determined by the holder of the miles and the holder of the seats. The more the FFP can increase the number of miles used per seat the better the deal for them and the worse deal for the holder of the miles as well as the disperser of the miles (CC companies, affliation programs etc.)
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Old Aug 1, 08, 8:46 am
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If CO matches, they had better loosen up somewhere else, like allowing OW rewards, or eliminating the draconian Saturday night stay requirement for rewards.
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