jetsetr

Since I haven't seen a "clean"-ish summary of the changes, here's my take to hopefully spell things out:

Effective 1/1/2015

How one earns SkyPesos:
*Earnings are similar to how one earns points in hotel programs

Base members earn 5 miles / 1 USD
Silver Members earn 7 miles /1 USD (represents 40% bonus over base members)
Gold Members earn 8 miles / 1 USD (60% bonus over base members)
Platinum Members earn 9 miles / 1 USD (80% bonus)
Diamond Members earn 11 miles / 1 USD (120% bonus)

*Use of a DL-affiliated credit card will earn an additional 2 miles / 1 USD (in addition to miles earned from cc usage itself)

*Miles earned based upon base fare + carrier-imposed surcharges

*Initially, miles earned from revenue flights on SkyTeam and other air partners will be based upon booking class, but this is still opaque


How one spends SkyPesos:
* FIVE tiers of mileage awards (up from current three tier structure). Similar to how hotels move up or down in a category each year based upon average annual room revenue, flight award tiers for a given route will more closely track the average revenue for the route.

*Critically, the effect on premium cabin award pricing may see significant rises in miles needed to redeem

*one-way awards introduced

*miles & cash option introduced


Bottom line:
DL will operate its program more like hotel loyalty programs have operated. Aspirational awards will still be possible, but it will be much harder to reach the mileage balances needed to get to those awards, even if, at the top Diamond level and using a DL cc, one is earning at the 13 miles / 1 USD level.

Clearly, this program will reward high spenders, and diminish the impact of and cost benefit to mileage runners.

TheBOSman

Also, one complaint I've heard from some of the heavy BIS, high money flyers I've shared space up front with: they have more miles than they can use. Heresy to many here, but a lot of these flyers already fly too much for their own liking. The last thing a lot of them want to do is voluntarily fly more using award miles. Giving them more miles does not really help them. So, those extra miles are simply no good. For someone whose company spends $50k a year on tickets (not unreasonable for an international traveler in premium classes), they will likely earn a heck of a lot more Skypesos under this new program. But if they aren't spending the miles they have, does it actually do anything for them?

xliioper

I'm probably extreme (> 50% MQM's last year), but I do it mostly for the status not the RDM's. I'm sure there are different motivations, but I suspect that many also do it for the status primarily. When you can buy RDM's for 3.5 CPM, it doesn't really make much sense to mileage run just for the RDM's (IMHO).

mooper

Many posters and blogs are painting this as doom and gloom for everyone. It's not.

On the earning side...

There's a breakeven point (I'll let others do the math) for each elite level where you earn the same number of miles as you do now. For upper elites, I think this is somewhere around 20 cents per mile. So yes, for those who mostly purchase fares under 15 or 20 cents per mile (especially with low or no status), you'll earn less. Possibly a lot less. Mileage running (at least for RDM purposes) is dead, if it wasn't already. But if you spend 20+ CPM on fares (especially with upper-tier status), you end up ahead. There are winners.

On the redemption side...

It's a given they are going to open up availability and probably (hopefully) finally fix the award calendar. With 5 tiers, the question is how availability will line up under the new system with what you get for the same number of miles now. If, for example, 25K miles gets you a fairly open domestic coach chart (versus now, where you have to be flexible), it will *increase* the value of miles. If earning by credit card doesn't change much or at all, then those who earn via CC and those who have stockpiled miles could benefit especially, as they won't be as affected by the earnings changes. The one-way awards are a gain, too.

Berto

Actually that reminds me, that I should probably set a few later alarms myself!

I'm just thankful I started spending down my account a few weeks ago by booking a trip to South America in J for May.

HatAndJacket

Ok, I'm done whining for now until more details are confirmed, namely how to requalify for status... I have a serious question now:

What do you guys think this will mean for the DL Amex cards? Plat and reserve cards now offer MQM spending bonuses... what do you think they'll replace those with?

javabytes

Are you sure about this? I figured the 2 miles/USD were from the CC spend, and not an additional 2 miles/USD on top of that.

javabytes

Thanks for the chuckle. I needed a moment of levity in this thread.

Ambraciot

I suspect DL sticking its neck out this way will hurt its load factor, average fare, revenues and therefore profit, much the way UA's program cuts hurt their performance. We're going to see very low fares and a lot of empty Y seats on DL in the near future... if anyone's always wanted to spend $12.5k to fly 300k BIS it might be a way to keep DM and a chance at upgrades.

I doubt DAL's 2014 reported profit will be even 10% of its reported 2013 profit and 2015 will be even worse.

adam1080

So, if i am understanding this correctly...

with the ~120,000 BIS miles (195k MQMs) and the ~$27,000 MQD spent last year, I would have earned 351,000 miles instead of 270,000 that I actually earned. (everything purchased on Amex).

I am slowly calming down...

Still upset, but the 5 tiers appear to be added in the middle of the current 3. As long as there are still as many low-level awards open to DM, I'm not as freaked out i first was.

We'll wait and see i guess...

HatAndJacket

And would they be MQMs?

pbd456

how much value do i lose from my half million delta skypeso again?

DeltaWings

I feel that this thread needs to be re-titled, specifically with the terms PANIC and DOOM.

Oshkosh105

Disappointed but not surprised. This move was coming, I was just hoping to get more than a year out of the hobby. Oh well...perhaps AA or AS for the rest of the year.

jetsetr

I am NOT sure about it. This was my take after reading Randy's blog post.

But it COULD make sense because it incentivizes having and using the cc to book DL flights.

But the other interpretation you present is equally valid and just as likely.