Skymiles Change Rumor?
#2761
Moderator: Southwest Airlines, Capital One
Join Date: Sep 1999
Location: California
Programs: WN Companion Pass, A-list preferred, Hyatt Globalist; United Club Lietime (sic) Member
Posts: 21,624
Southwest's customers made a lot of noise when the new fare-based Rapid Rewards was introduced almost two years ago. The new program turned both earning and redemption tactics upside down. Now that we are accustomed to the new tactics some of us like the new program.
Yet there's no getting around the fact that a program overhaul like this is a huge devaluation to customers who have become expert at gaming the old program. Southwest's change devalued my earnings by a factor of 3. But life goes on, and we need to remember the years of abundance. Considering the number of years that I earned 70% to 100% effective rebates on my Southwest ticket purchases, I consider myself still to be ahead in this game.
One other point. Frequent flier programs operate on the principle that the customer perceives a value which is higher than the airline's cost to provide that value. Part of this mismatch derives from continual devaluations, so that the customer's perception of redemption value always lags reality. The airlines need to keep devaluation moving so as to keep customers fooled. In fact, the airlines need to keep accelerating the devaluation to keep customers fooled. (This is the same situation faced by governments which choose to fund a significant portion of their operations by printing money: Only by accelerating the inflation can the government stay ahead of public expectations.)
At some point the accelerating devaluation exceeds reasonable limits and customer confidence in the value of miles completely evaporates. A new program can restart the process slowly after the old liabilities are voided, e.g. in Chapter 11 bankruptcy. Until then, expect devaluation to continue and to accelerate. Economics practically demands it.
Yet there's no getting around the fact that a program overhaul like this is a huge devaluation to customers who have become expert at gaming the old program. Southwest's change devalued my earnings by a factor of 3. But life goes on, and we need to remember the years of abundance. Considering the number of years that I earned 70% to 100% effective rebates on my Southwest ticket purchases, I consider myself still to be ahead in this game.
One other point. Frequent flier programs operate on the principle that the customer perceives a value which is higher than the airline's cost to provide that value. Part of this mismatch derives from continual devaluations, so that the customer's perception of redemption value always lags reality. The airlines need to keep devaluation moving so as to keep customers fooled. In fact, the airlines need to keep accelerating the devaluation to keep customers fooled. (This is the same situation faced by governments which choose to fund a significant portion of their operations by printing money: Only by accelerating the inflation can the government stay ahead of public expectations.)
At some point the accelerating devaluation exceeds reasonable limits and customer confidence in the value of miles completely evaporates. A new program can restart the process slowly after the old liabilities are voided, e.g. in Chapter 11 bankruptcy. Until then, expect devaluation to continue and to accelerate. Economics practically demands it.
#2762
FlyerTalk Evangelist & Ambassador: China
Join Date: Aug 2005
Location: DEN
Programs: DL DM/MM, UA 1K, AA Exp, HH Dia, WOH Glob, IHG Plat, Marriott Gold, NA EE, Hertz PC
Posts: 17,423
#2763
Join Date: Aug 2008
Location: MCO
Programs: DL-DM/1MM, HILTON-DIA, .HYATT-DIA/GLOB , IHG-PLT,HERTZ 5*, NATIONAL ES
Posts: 8,691
#2765
A FlyerTalk Posting Legend
Join Date: Jul 2003
Location: Yiron, Israel
Programs: Bates Motel Plat
Posts: 68,927
As things stand right now, an M fare runs me about $1000 more than a K fare would, 50,000 SkyMiles gets me upgraded across the Atlantic in both directions and on most (if not all) of my domestic segments, the M fare is much more flexible than the K, and I earn 1.5 SkyMiles and MQMs for my M fare -- and with Gold or Platinum status, that means that I get almost as many SkyMiles as the upgrade costs me, and I can make Gold with two itineraries per year or Platinum with 3 -- and that gets me four SWUs.
I also have very little difficulty right now in getting upgrades, but if they are allowed on K fares, the competition for them will increase sharply.
#2766
FlyerTalk Evangelist
Join Date: Jul 2003
Posts: 23,057
#2767
Suspended
Join Date: Dec 2009
Location: HKG
Programs: DL FO, UA, AA, AsiaMiles, SPG, HHonors
Posts: 7,982
If I were DL I'd make sure any changes for the next year were completely different, just to screw with the heads of the speculators.
#2768
Join Date: Jan 2009
Location: ATL/LAX
Programs: Delta Diamond 2MM, AA EXP
Posts: 703
I'll believe it when I see it.
#2770
Suspended
Join Date: Dec 2010
Location: LAX
Programs: DM
Posts: 1,067
You are absolutely correct.
The fact that they did not announce the change before the end of 1Q12 is proof positive that there will be no change.
Similarly, the fact that I am a few days overdue in returning my library book is proof positive that I never, ever intend to return it.
It's all so much more clear now.
The fact that they did not announce the change before the end of 1Q12 is proof positive that there will be no change.
Similarly, the fact that I am a few days overdue in returning my library book is proof positive that I never, ever intend to return it.
It's all so much more clear now.
#2771
Join Date: Dec 2005
Location: Likely being followed...
Programs: DYKWIA Extraordinaire. TrollSlayer Mega Diamond. [insert esoteric sounding status level(s) here]
Posts: 5,240
Maybe the mob with pitchforks and fire scared him away? Consider the post by another member here recently calling out the rumor and LedgeT specifically. Was quote, well, not nice.
http://www.flyertalk.com/forum/delta...otal-croc.html
http://www.flyertalk.com/forum/delta...otal-croc.html
#2772
Suspended
Join Date: Dec 2010
Location: LAX
Programs: DM
Posts: 1,067
Maybe the mob with pitchforks and fire scared him away? Consider the post by another member here recently calling out the rumor and LedgeT specifically. Was quote, well, not nice.
http://www.flyertalk.com/forum/delta...otal-croc.html
http://www.flyertalk.com/forum/delta...otal-croc.html
#2773
Join Date: Dec 2005
Location: Likely being followed...
Programs: DYKWIA Extraordinaire. TrollSlayer Mega Diamond. [insert esoteric sounding status level(s) here]
Posts: 5,240
#2774
Join Date: Jul 2012
Location: LAX
Posts: 298
Not for me -- at least not if it meant that a K fare could be upgraded with SkyMiles but DL wants almost as many SkyMiles as it does for an award ticket.
As things stand right now, an M fare runs me about $1000 more than a K fare would, 50,000 SkyMiles gets me upgraded across the Atlantic in both directions and on most (if not all) of my domestic segments, the M fare is much more flexible than the K, and I earn 1.5 SkyMiles and MQMs for my M fare -- and with Gold or Platinum status, that means that I get almost as many SkyMiles as the upgrade costs me, and I can make Gold with two itineraries per year or Platinum with 3 -- and that gets me four SWUs.
I also have very little difficulty right now in getting upgrades, but if they are allowed on K fares, the competition for them will increase sharply.
As things stand right now, an M fare runs me about $1000 more than a K fare would, 50,000 SkyMiles gets me upgraded across the Atlantic in both directions and on most (if not all) of my domestic segments, the M fare is much more flexible than the K, and I earn 1.5 SkyMiles and MQMs for my M fare -- and with Gold or Platinum status, that means that I get almost as many SkyMiles as the upgrade costs me, and I can make Gold with two itineraries per year or Platinum with 3 -- and that gets me four SWUs.
I also have very little difficulty right now in getting upgrades, but if they are allowed on K fares, the competition for them will increase sharply.
They're clueless. My guess: AMEX isn't giving good referral bonuses for SkyMiles cards.
#2775
FlyerTalk Evangelist
Join Date: May 2008
Location: CHA, MAN;
Programs: Delta DM 1 MM; Hz PC
Posts: 11,169
OMG - I thought this thread had gone to meet its maker.