Skymiles Change Rumor?
#2641
Suspended
Join Date: Aug 2010
Location: DCA
Programs: UA US CO AA DL FL
Posts: 50,262
Can't expect any business, including DL, to build a business model around the flawed thinking of businesses which reimburse their employee travel in odd & outmoded fashion.
Rock bottom, it was a big mistake during the last recession to keep capacity at all-time highs and cut fares and increase perks in order to get people to fly.
So, people started making elite on low $ spends, competition is down (see NW), capacity is down and something has to give.
Smartest think is to link status to $ spend or at least make $ spend a qualification. My prediction, watch the next 12-18 months. And, not just at DL. Those who swear they're going to jump ship, won't be doing it to UA, US, AA (or whatever that is in 18 months) because those carriers will do the same.
Rock bottom, it was a big mistake during the last recession to keep capacity at all-time highs and cut fares and increase perks in order to get people to fly.
So, people started making elite on low $ spends, competition is down (see NW), capacity is down and something has to give.
Smartest think is to link status to $ spend or at least make $ spend a qualification. My prediction, watch the next 12-18 months. And, not just at DL. Those who swear they're going to jump ship, won't be doing it to UA, US, AA (or whatever that is in 18 months) because those carriers will do the same.
#2642
Join Date: Aug 2011
Location: ATL
Programs: Delta GM, Marriott Platinum, Hertz 5*
Posts: 2,530
Rock bottom, it was a big mistake during the last recession to keep capacity at all-time highs and cut fares and increase perks in order to get people to fly.
So, people started making elite on low $ spends, competition is down (see NW), capacity is down and something has to give.
Smartest think is to link status to $ spend or at least make $ spend a qualification. My prediction, watch the next 12-18 months. And, not just at DL. Those who swear they're going to jump ship, won't be doing it to UA, US, AA (or whatever that is in 18 months) because those carriers will do the same.
So, people started making elite on low $ spends, competition is down (see NW), capacity is down and something has to give.
Smartest think is to link status to $ spend or at least make $ spend a qualification. My prediction, watch the next 12-18 months. And, not just at DL. Those who swear they're going to jump ship, won't be doing it to UA, US, AA (or whatever that is in 18 months) because those carriers will do the same.
But why would they "give away" non-BIS miles for next to nothing, while raping loyal BIS customers at the same time? If the AmEx mileage earling doesn't go down (or BIS earning go up), then the earning structure is meaningless. It will still favor tangential purchases (partner/AmEx spend) over loyalty to Delta.
And if those tangential businesses are more profitable to Delta than customers who fly K+ fares weekly, their is something fundamentally flawed with the business model that no loyalty program is going to fix.
#2643
Suspended
Join Date: Sep 2005
Location: SEA
Programs: UA Silver, BA Gold, DL Gold
Posts: 9,779
Disagree. Certainly one can make the argument that 5 transcon RTs at $300 each today earn 25,000 miles. Save those miles for 3 years and the price for the ticket is now $500. You can claim that your miles have increased in value by $200. However, those 5 transcons, whether flown three years ago or flown today, should still be worth another transcon.
Miles don't increase in value.
#2644
Suspended
Join Date: Sep 2005
Location: SEA
Programs: UA Silver, BA Gold, DL Gold
Posts: 9,779
You are just figuring this out? The airline business is fundamentally flawed, or at least it was as recently as 3 or 4 years ago. The jury is still out whether the current model is sustainable, but FF program rationalization will be part of any sustainable model.
#2645
Suspended
Join Date: Aug 2005
Location: BOS
Posts: 15,027
I found a $1,500 ticket for 25k miles the other day. As always mileage tickets are not always correlated to the cost of a revenue ticket. Especially on competitive routes like NYC-FL or west coast to Hawaii. People always make the incorrect assumption that the two should go hand in hand when in reality it is revenue managements job to try and maximize profits. If they only want to allow 8 tickets at low level on a flight and they reach that number, the next ticket goes to 40,000 even though it may be T9 and there may be a $49 T fare available: See LAX-LAS. Often 40-50k miles and under $100RT....
If anything, when a simple TCON is $1,500 it probably means the plane is close to sold-out. At that point, revenue management probably will pull award availability.
#2646
FlyerTalk Evangelist
Join Date: Apr 2009
Location: Bye Delta
Programs: AA EXP, HH Diamond, IHG Plat, Hyatt Plat, Marriott Plat, Nat'l Exec Elite, Avis Presidents Club
Posts: 16,278
It's a loyalty program, not a currency. I expect the punch card from my pizza joint to still get me a free pizza after ten punches whether I take it in today or a year from now.
#2647
Suspended
Join Date: Aug 2005
Location: BOS
Posts: 15,027
The pizza joint can change the terms mid-way and say the punch card is no longer valid. Have you not followed the WN "free-drink-coupon-without-exp-date" lawsuit?
#2648
Join Date: Oct 2004
Location: BZN
Programs: AA:LT Platinum DL:LT Gold UA:1P MAR:LT Titanium
Posts: 8,291
You're saying that as if it is a good thing. To the average business traveler, who is on the road 80-100% of the time, but cannot open a personal AmEx to use instead of their corporate card or TA direct-bill (a.k.a. the "bread and butter" of the airlines), this is a very, very bad change. To ma and pa kettle, who (maybe) fly a few times per year, this is great.
...
I could care less about the miles, as I have to spend over $6k to have enough miles for a free $200 ticket. My most recent redemption (40k) cost me roughly $10k to earn, but would have been $400 to purchase. (Yes, this is after dozens of hours of searching over a two month period.) With that kind of value, the redeemable miles are essentially worthless.
...
I could care less about the miles, as I have to spend over $6k to have enough miles for a free $200 ticket. My most recent redemption (40k) cost me roughly $10k to earn, but would have been $400 to purchase. (Yes, this is after dozens of hours of searching over a two month period.) With that kind of value, the redeemable miles are essentially worthless.
Why did you choose to redeem 40K miles for a $400 ticket? Weren't there options for fewer miles on other airlines? Do you have status and/or a little flexibility?
The 25K miles replace the cash you'd have to expend for a domestic coach (or first class if you have status) ticket. If that ticket costs $200 in year one and $400 in year two, then indeed your miles have increased in value... they save you $400 in airfare when they used to save you $200.
#2649
Join Date: Oct 2004
Location: BZN
Programs: AA:LT Platinum DL:LT Gold UA:1P MAR:LT Titanium
Posts: 8,291
Also, while an airline or a pizza shop can change the terms of their notes, the government can also change the value of a currency. (Fed with the dollar, etc.) Really no different.
#2651
FlyerTalk Evangelist
Join Date: Apr 2009
Location: Bye Delta
Programs: AA EXP, HH Diamond, IHG Plat, Hyatt Plat, Marriott Plat, Nat'l Exec Elite, Avis Presidents Club
Posts: 16,278
(Deleted)
#2652
Suspended
Join Date: Sep 2005
Location: SEA
Programs: UA Silver, BA Gold, DL Gold
Posts: 9,779
The 25K miles replace the cash you'd have to expend for a domestic coach (or first class if you have status) ticket. If that ticket costs $200 in year one and $400 in year two, then indeed your miles have increased in value... they save you $400 in airfare when they used to save you $200.
#2653
Join Date: Oct 2009
Location: MCO
Programs: DL DM/MM, Marriott Plat Premier, HH Diamond, Hyatt Plat, Hertz PC
Posts: 4,081
You're suggesting that consumers are better off when there is overcapacity and many airlines hemorrhaging cash on the brink of bankruptcy. Fewer, stable, profitable airlines can be a good thing for consumers, too. It took several years to work out the excess capacity and get fares up (they are still not much above historical lows in real terms) to a point where some airlines could actually make money.
As for fares, most of mine are at least 50% above where they were a few years ago, well above historical lows. The airlines, not the inmates (FFers), are very much in control now.
#2654
Join Date: Oct 2002
Location: LAS
Programs: PA FT, TW Gold, NW/CO PE, VK Eagleflyer
Posts: 7,173
#2655
FlyerTalk Evangelist
Join Date: Jan 2002
Location: Salt Lake City, Utah, USA
Posts: 10,003
The company I work for only requires justification when the delta for Delta is >$150. In other words, I can fly nonstop on Delta instead of connecting on a different airline as long as the nonstop costs no more than $150 above the lowest priced connecting flight that would otherwise meet my needs.