bubbashow

Then, drop capacity a bit. That has done WONDERS for DL's books so far.

SamuelS

Most likely being in the single digit percentile of FTers who will "LOVE" paying 1,100,000 miles for a longhaul J award (which is what you're looking at a la SkyBonus revenue based model), it will be interesting if DL will find that there are enough folks like you in that single digit percentile category to make up for the 80% of folks who choke and say screw-it.

Whether DL comes out looking anything the same when the "gamers" on their "cheap" H, Q, K, L, U, T fares choose to book with whatever airline is the best fare remains to be seen.

Not being rude. I guess we'll have to see where the chips fall on the rate of accruals and redemptions.

doubleA

I think it's important to remember that 1.1M points in SkyBonus have zero relationship with SkyMiles accrual from flying distance alone. If fare drives accrual, it would seem that a revamp of current valuation will be necessary.

bubbashow

......and raises the issue...who generates more to the bottom line: A low-margin "elite" that is going to get perks and benefits, or a non-status flyer on a deep discounted fare that going to pay for each and every service and product?

StayingHomeIsBetter

I have been meaning to ask this of a number of you folks who speak so glowingly of DL's recent profits... has no one ever explained the folly of trying to draw a line through a limited number of data points that are very close together?

Don't get me wrong. I wish DL long-term financial success. I'm just not willing to assume that current management have found the secret for achieving this.

And, continued capacity cuts in order to stimulate short-term profits would logically seem to be a strategy that loses efficacy if you continue to apply it long enough.

"OK, Smith, you get to fly the (only) airplane today. It's my turn tomorrow."

AA_EXP09

Not every elite uses all of their benefits though.
I have helped kettles check in bags (they were flying YVR DFW) because I was only taking carry on to LAS.
Lounges in YVR that I use aren't even AA or CX lounges.
(I will use the MLL or the PP lounges, because I have been able to get in just by presenting my *G card or PP card)

bubbashow

But aren't ALL airlines doing this? Has anyone increased capacity recently?

HongKonger

What makes you so SURE?

There are too many elites, but that's because of the Amex-based MQM, MQM sales, and "fly 2 flights and get gold!" promos. Get rid of those and there wouldn't be too many elites. A radical change like the one that seems to be coming isn't required.

I understand that DL wants its elite ranks to be the same list of people who bring in the most profit. But as many have mentioned, the incremental revenue that determines profit or loss--and the demand for seats that allows DL to have such an extensive route network and schedule--comes from leisure travelers and sLUT fare FFs. Here's a clue that those people are just as important as "HVCs": all-F/J airlines have been tried before, and they all failed.

AA_EXP09

NK, VX

FederalFlyer

I suggest for anyone with a DL branded American Express card that opposes the possibility of this change to contact American Express.

I just did myself, as I do not wish to place my spend (or pay the annual fee) on a DL Amex Card that will be earning SkyMiles if those SkyMiles are to be devalued as the rumors here suggest. If that's the case, I'd rather put my spend on a Chase card.

Of course, I doubt American Express will offer any insight, but perhaps if they realize that their loyal customers plan to cancel their cards and switch to Chase if these alleged rumors come to fruition, American Express will exert some influence on DL to scale back.

AA_EXP09

I will too, although my AMEX isn't the Skypesos amex.

SamuelS

SkyBonus is already based on fare paid however and accrual is based on how much you paid for your ticket not distance. So a revenue model does exist, albeit there is fixed redemption ratios on SkyBonus currently, whereas I think that what DL might be looking at is a "cent per mile" (or fraction thereof!) redemption for the prevailing fare.

Anyway, we'll see what comes down the pipes, but it wouldn't surprise me to see a SkyBonus type of system for accrual based on fare paid. Interestingly, SkyBonus offers even lower credit for fare originating from fortress hubs. I wonder if that would go down well in the new SM program

bubbashow

NK - an airline that is for all practical purposes the tightest-seating, highest-fee airline in the North American skies.

VX - an airline that NEVER gives away its F class.


Both with limited route networks.

blug

Anyway, I think the miles will be devalued for everyone.

Currently a DM can earn 120K miles by flying 2 TPAC roundtrips, which can be used to redeem a TPAC roundtrip in BE (although it's very hard to do so).

Judging from WN's RapidRewards, in the future, I guess one will need to fly a lot more to get a free ticket (maybe 4-10 roundtrips to get one free roundtrip in BE, depending on whether one is a so called "HVC").

I'm not saying that one deserves to get a free BE r/t after flying two r/ts in coach, but it's definitely a devaluation for everyone, including the HVCs. I just can't imagine somebody will actually like and appreciate it.

AA_EXP09

Lots of throwaway ticketing will occur, then.