mooper

DL had a very high margin on the Amex card deal, which is why they are willing to give away MQMs to spur more spending. Remember, $1,000 in revenue at a 75% margin is the same as $10,000 in revenue at a 7.5% margin.

Even in the extreme where miles were worth 1 CPM flat, spending $30K on a DL Reserve gives you 1.5 miles/$ (worth 1.5 cents/$ in this scenario) and 15K MQMs... the MQMs might be worth the forgone $150 you'd pick up by spending with a Fidelity 2% cash back card, for example. Of course, the annual fee is a factor, but if you can get $450 value out of lounge access and using the free companion cert efficiently, it still makes sense for some people. Of course, I'd prefer to keep using my Skymiles the way I have been... 25K for first class domestic I can confirm within my window and change/cancel free if I book in advance (requires status to do this, of course). I've been getting 3CPM regularly using them this way to replace last-minute business and leisure travel costs I would have paid cash for otherwise.

AA_EXP09

And it would force YQ to be paid on US originating itineraries.

mother-

You obviously don't understand how pricing power works, or how perishable high fixed cost industries (airlines) make money. This has been explained ad nauseum in this thread, it doesn't need to be repeated.

FACT: Buying a seat from Delta at whatever price they are selling it for puts Delta in a better position then if you didn't. If that isn't nearly always the case, you can bet someone will be getting fired.

MSPeconomist

I think the post you quote is about FF benefits, making the observation that if DL could sell the same total number of tickets at the same price to people who never made 25,000 MQMs in a single year, their costs would be lower due to the savings from not having to provide any elite benefits.

Your point is that DL would never sell any seat for less than its marginal cost, which is also true (except if there are mistakes).

mother-

Perhaps, but even that is a fallacy- your seat would probably not have been sold if you purchased it at a MR-worthy fare. There won't be a low LUT fare on a connecting itinerary if there isn't that lower fare bucket available on all segments. Since the fare and available seats in various buckets is all managed to maximize rents for any given flight at any given time, it can be assumed that the seat would probably not have sold anyhow.

Even if it did- What is the additional cost of an elite?
-The club existed
-The priority line through TSA was already staffed
-The first class section existed,
-The first class "meal" was catered

So what are we really talking about- the amount of snacking and drinking done by DM's who free-load into the Sky Club?

MSPeconomist

Fee waivers, additional elite line agents, cost of FC catering and booze on flights that aren't fully booked (so that FC seats would otherwise go empty), that wallet candy to produce and mail to elites, HOOU coupons if the passenger would have otherwise paid for that drink in coach, etc.....but I suspect that fee waivers for checked bags, seat reservations, etc. are increasingly the big one. Most elites don't pay any fees except to change a cheap ticket, which most other people pay lots of fees and the airlines find these fees to be very profitable.

FLYPWM

Just a little FYI on this never ending thread. I was travelling in Europe this past week with a friend of mine who's works in Marketing in NYC. He was on the DL Advisory Board that this topic is all about and indeed said changes are coming but not until next year. Yes, they will be going to a more revenue based FF program.

mother-

The second the seat wouldn't be filled by someone else (the situation with almost all cheap tickets) the majority of this doesn't matter...

Outside of that would be the email, but the expense of the email (it's creation) exists c.p. the MR.

RealHJ

Qualifications or redemptions, though? Or both? (With FBATR seems like both. I just still can't quite see how it'll work with other ST airlines: DL will pay 1c per each SM for actual revenue fares, or those will still need to be available in their award class?)

StayingHomeIsBetter

That could well be the most cynical statement that I have ever seen made in this forum.

Sabai

It's probably on a cross-stitch hanging behind C.E. Woolman's desk.

generaltao

And ahh get ta lick it, eeeeverdayyy.

canadatosiberia

The fact that this debate is still going on is so awesome! Sorry, but even though I stand to lose out on some value I find the speculation (some based on good research) to be a great read. I bet that DL is watching this and coming up with new ideas on how to mess with the program. Rest assured, they will make changes, but beyond that there are no guarantees. Lucky for me, I just made FO for next year again - wonder if this change will affect my awesome priveleges.

HongKonger

Revenue or profit? The question is important to many, but here's why it's important to me:

My spend: $12-18K depending on how much I need to travel. Very pedestrian number. BUT, it's all on TPAC M fares that I use SWUs/miles on. So that $12-18K is on very few segments, and I sit in a cabin that almost never sells out (BE). I'm a PM by miles but wouldn't make FO on segments.

Compare that to someone who spends $25K but flies a huge number of segments/miles on sLUT fares.

I believe I am a more profitable passenger. I have no data to back that up. But assuming I am, will I be treated as such? Or will the $25K sLUT passenger get better status?

Bottom line actually is not whether the $25K sLUT passenger is higher status than me; I don't care. The bottom line is whether I will get SWUs every year or continue to earn enough miles to use them instead of SWUs. If the answer is no, it's goodbye DL unless they happen to be the lowest fare.

No point in getting hysterical because DL can and will do what it wants with its program. But hopefully (for my sake and many others) DL will recognize that valuable customers have lots of different travel patterns.

FLYPWM

I didn't ask him about the revenue or profit angle of it, but I tend to agree with you on your position. I'll reach out to him and see if I can get some more clarification.