respectable_man

Not really. The guy who chooses DL 30 times over another airline is more valuable than the guy who is forced to fly DL 12 times, irrespective of the fare paid. The FFP is there to influence the choice of carrier when other things (fare, schedule etc) are nearly equal.

As to LH: their strategy works only because of the geographical quasi-monopoly of the carriers in different European regions, and because of comparative lack of competition in FFPs. After all, if you don't like M&M, where do you go? FB?

pmaddock

I certainly hope not. DL's current myopic management that can't see past this quarter's bottom line would probably define a new low in the industry that would make the current 2nd to last issue the 'happy time.' I'm sure both the pro and con DL people would just 'love' the resulting ill will spilling over here. It would be like 2003 all over again - maybe worse because I think things are getting close to that point as it is.

playbbg

I'm going to go with false on this one. I know a lot of companies that currently pay for their professionals to travel in business at least. Most consulting firms still have a policy that if the flight is over 5 hours or over an ocean (or something of the like) they can fly in business. consider it a perk for having to travel so far. Further, most financial companies' standard is to send everyone in business or domestic first. Again, perk of the job and an offset for the sacrifice you make to your firm (see 100hr weeks, last minute travel at non-standard times, etc...).

UA Global Services or the like would not exist if your hypothesis were true.

Supersonic Swinger

I read an article (for which I can't remember the link) which said that the manager of every airline loyalty program since 1981 has cursed the decision of American Airlines to base the first loyalty program on miles flown not dollar spend. While everyone likes miles and has become conditioned to them, dollar spend is more aligned with an airline's economic interest. Two economy return flights LAX-SYD for $1,560 earn Silver Medallion status, yet 14 return flights LGA-DCA in First for $9,220 don't?

Changes to programs such as Emirates and Jet Blue, Singapore Airlines PPS Club being based on Business and First Class $ spend, status earning being weighted to business class fares on Qantas, British Airways, AF/KL etc feel like part of an inevitable shift.

runninaway

On the chart you linked to, if you click on the Sun Trust link you'll be directed to a page with the bold headline:

BHArt

As someone who takes the occasional gov't fare trip and audits a lot more gov't travel vouchers, you'd be surprised how incredibly high city pair fares are. I've flown on a full Y fare even booking 3-4 weeks out. We are encouraged to normally book the lower fares when available on our own though.

SamuelS

I wouldn't say false. There are some companies that will still pony up for Business international. Many are now economy only. An increasing trend is to allow Premium Economy (and why would you go on DL when you could go on BA, VS, VX or any other number of international carriers with a decent Premium Economy product).

For domestic travel, the number of companies allowing paid F travel I'd say would be definitely the minority these days, not the majority.

More and more companies are watching their travel budgets carefully.

The UA Global Services crowd will still exist - but they represent less than 5% of the frequent flyer base. If I were DL, I'd be very hesitant to rejig the whole program to royally reward just 5% of the FF base and make varying degrees of cuts for the other 95% (think current Plat, Gold, FO members)

edscholl

well, hotel programs (at least starwood and marriott) use a hybrid- status based on nights/stays (loyalty), but points based on spend. makes a lot of sense to me.

MikeMpls

Bingo!

Yup!

The competition will clean Delta's clock if they do anything this stupid. We've already seen both UA & CO realign their programs to attract Delta's disenchanted customers. Expect more of the same if this radical proposal take place.

Liar.

They got rid of hundreds, probably thousands, as "synergies" from the merger that just happened to coincide with the recession for which they downsized (or in airlinese, reduced their schedules).

Hauenstein is the head beancounter. If you think SkyMiles has gone downhill lately, it appears he's only just begun.

GUWonder

DL wishes it could lead the airline industry in the US into marching to the British Airways and Air France-KLM tune when it comes to earning miles and/or status.

In other words, DL's customer-unfriendly ways aren't coming to an end anytime soon. DL management marches down an increasingly customer-unfriendly path.

BenA

I'm not opposed to Delta creating a Global Services-like equivalent - for those who fly full fare business/first tickets, they obviously deserve the most recognition and benefits.

You have to consider though that there is another group of elites that pay for their own tickets - people whose travel is mostly or exclusively leisure travel. In my case, I moved to Seattle from the east coast and much of my travel is to stay in touch with family and friends; I also fly fairly regularly for vacation travel. All of that travel is a- elective, and b- price elastic. With the mileage thresholds as qualification incentives for SkyMiles, it means that a $200 SEA-LAS fare gets me onto an airplane filling an otherwise empty seat for an unplanned trip to Vegas, and a $850 SEA-SYD fare convinces me to take an (otherwise very empty, judging by the seatmap) off-peak vacation to Australia.

Neither of those two sample trips would have been booked on Delta without the SkyMiles program - I'd otherwise be flying *A for slightly less money in both cases, if I decided to travel at all.

It's also worth noting that I do travel on occasion for work - almost but not quite enough to make SM, independently of my other travel - and I often accept odd connections or times to fly Delta instead of other airlines. Again, revenue that would otherwise have been lost to competitors without my status gained from leisure travel - and this time, the ticket prices are typically SkyHigh due to last minute booking.

I think the existing 150% class of service bonuses strike a nice balance for both groups of travelers. Whether you take a few fabulously expensive full-fare J trips on your employer's dollar or you grind it out with lots of leisure travel on T fares... both customers represent important revenue for Delta, and arguably the T fare passenger is more elastic and open to incentivization in choosing whether to travel.

My $0.02...

fgirard

I'm not entirely sure where I fall into the mix with regards to accepting or rejecting this "new philosophy."

On the one hand, I travel very frequently--primarily International J (in fact, on Thursday, I'm heading to Brussels for a last-minute conference), which does eat a lot of capital. However, on the other hand, a lot of my domestic flying is done for pleasure (visiting friends of mine and family), and therefore the tickets aren't usually the most expensive.

Before I started dealing with SM (on a full time basis), I was with FB, in which I ended up earning Club2000 status, which is a lot like United GS. The intent of Club2000 was to reward those who have "thrown a lot of dollars/euros" in the direction of AF/KL. One of the great things about it was that with Club2000, one could get upgraded from J to P.

GUWonder

Delta already did that.

Of course that didn't stop DL from devaluing elite status (and related benefits) and the miles earned by DL customers from flights. Even such customers have not been spared DL's customer-unfriendly ways.

Robert Leach

I have no problem with an airline rewarding its high dollar customers with special services and benefits.

But anyone who thinks a loyalty program would be beneficial to the carrier if it was only based on dollars is misguided.

The way an airline attracts high dollar customers is with service and frequency. In the vast majority of markets, you can't have frequency without the low dollar/high volume customers (whether they be leisure travelers, self-employed business travelers, or employees of companies with fiscally strict travel policies). To attract the guy willing to pay $1000 for a one way ticket to LGA, you have to offer him the frequency he needs, which is why we have these ridiculous hourly flights there now. The only way you can support that frequency is with a lot of butts on the plane who did not pay $1000.

Transition the loyalty program to a dollars-only setup and you immediately risk losing the low dollar flyers. Lose them, and you lose the volume needed to maintain the frequency to attract the high dollar flyers, or else you have to reduce plane sizes down to barbie jets that are likewise not attractive to the high dollar traveler.

The two groups, while distinctly different, are co-dependent on each other. You can add a system that rewards dollars spent, but it will not work in the long run if you trash the old system that rewards mileage flown.

Klm is Dead - Long Live KLM

I am glad that you are not managing my investments.