Cholula

Thanks for asking.

I've always been in favor of rewarding revenue over miles flown. And I've felt that way as I've always been ready and willing to pony up the extra $$$'s to get the exact seats and flights on the specific dates I require.

While we have a small degree of flexibility in the dates of our our travel, we require certain specific flights and seats to get from Point A to Point B. And we're willing, to a point, to pay premium $$$'s for them.

Right now we're about ready to pop for a pair of $3K DL B/E seats to South America. Not the cheapest way we could come and go but we want to fly DL, we want to fly, together, up-front and we need to travel on a tight set of dates.

A lot of the plane will be filled with folks on $500 coach RT's getting just slightly fewer miles than we will up-front. It would ease the pain of paying $6K for a pair of tickets if the mileage was based on revenue gained rather than just BIS miles flown.

I'm probably one of the lone voices here for a revenue versus miles based system but I'm guessing you want to hear both sides of this debate.

divrdrew

First off, thanks for taking the input. Even though I have my miles with NW, I fly DL quite regularly (now that I'm in TPA, probably around 70-80% of my travel, even though I don't get any upgrades as a NW Elite ). I have been Plat for 7 years now (with CO until the 50% EQM, and NW since then). I tried to get a match to DL this year, but SkyMiles wouldn't do it since I had one years back that I couldn't use (any chance you could get me a match, I'd happily move all my business to DL ).

I stopped flying DL a few years back (late 90s, early 00s) when I had frequent trips with nothing but bad attitudes and treatment by GA and ticket counter staff. Now, I can happily say that the staff is fantastic...a full 180 from where they were just a few years ago.

Regarding earning miles, I left CO when it instituted the 50% EQM issue and will not fly an airline that penalizes me for buying discount fares. CO used to have almost 100% of my travel, now it's 5-10% or less. The reality of today's world is that information is now transparent regarding fares...used to be that the travel agents were the gatekeepers, but that's no longer the case. Because of that, many business travelers are forced to buy cheaper fares / discounted fares and I simply don't think it's fare to penalize people by giving fewer miles.

For redemptions, I have personally blown through close to a million miles on myself, my wife, and family and friends over the past six or seven years. I've been able to snag everything from free tickets to upgrades and have only had to use the high-mileage rewards on last-minute tickets for family. Every time, I got to go where I wanted, when I wanted. I think the key for the airlines is more effective communcation. Make sure that people know if they call and want a free ticket for next weekend and are fixed in their plans, it will likely cost more. However, if they are more flexible with regards to timing and/or location/destination, that they can usually get where they are going. I think much of the griping comes from people that simply don't understand the issues around reward travel and it's the job of the airlines to do a better job of educating. Of course, we can always use better availability of business class seats, but not at the expense of revenues.

Finally, the main issue with re-vamping the programs is one of expectations. So far, the airlines have programmed the travling public that if we fly, we get miles based on distance and will get bonus miles for higher fares. Then we in turn burn them on free tickets and/or upgrades. If that were to change over to a revenue-based model, I think there would be a lot of outrage and unless all airlines did it around the same time, there could be some significant defections. I think that instead of finding different ways to allocate miles, Delta should be thinking more about how else we can use our miles. Perhaps an auction (like the one done by Continental), or a merchandise catalog (not just magazines), or even free vacations (not just airfares, but Delta Vacations for example), at 'reasonable' levels would be great. I don't mean 750,000 miles for a 4-day cruise. I definitely think that the discounter model (points per segment and free trips) isn't the way to go for the full-service airlines.

Just my 2c.

Thanks again for all your work. I think that it's great the airlines are getting people like you to really get face to face with the traveling community (or at least one sub-segment of it) ^ ^ ^

keeton

I would actually like seeing a revenue based track to elite level. There are some marketes (e.g. CVG to anywhere or ATL to a non-FL market) where the fares are _quite_ high. The people buying those high fares are generating a lot of revenue (profit$) for DL and deserve consideration for the money they are spending.

Of course, this should be in addition to the current MQM track. Even the folks who chose DL frequently over some LCC deserves consideration and you want to retain their business.

DeltaFlyingProf

I can echo a lot of things people have said already and give my own point of view with a distinct flavor.
I have been flying DL for 17 years. I have spent quite a lot of money on DL over those years and the only reason I used DL is that DL gave me Medallion status when they bought the Pan Am European lines and gave me an upgrade I was able to use to Europe on ANY fare. Before DL extended that offer, as I had moved to Colorado, I thought I would switch to UA whose base is in Denver. But the Delta FrequentFlyer program is what got me to fly and stick with Delta. For 17 years, my employer has been trying to get me to fly UA but I have systematically tried everything I could to use DL. I have been able to do so and DL can thank their FF program for getting me to fly them. It is clear that if I am representative of any segment of flyers, a FF program does get an airline a revenue.

Why did I stick with DL so long? The upgrade program worked for me... But now I think I have ignored the changes and have totally done a wrong evaluation of the value of the program to my need. What has changed?

1. First I am starting my own business and now the money comes directly out of my pocket.
2. The SWU disappeared, removing a lot of value to the program. Since I became a PM, I fist got the idea that PMUs compensated, but...
3. PMUs have become value less to me. Frankly it is a LOT easier for me to shift my travel to *A and get F awards to Europe. I can find F awards a lot more easily on *A than a reasonable upgrade on DL (Let me think... there are NO reasonable upgrades to Europe left on DL) Worse for DL: It is better for me to buy a premium ticket on *A and get the triple miles (or more ) that some *A partner offer than buy cheap tickets on DL and build the miles for a DL award. The money I save from paying an M fare pays for the difference between Y and J or F on my paid *A ticket.
4. The CRC membership to PM has disappeared... one more value gone.
5. I have been buying premium tickets (J and F) for my international tickets and have reduced my domestic (mostly purchased in Y) to a minimum.

As a consequence, my former staunch loyalty to DL has shrunk to about nil. In fact I have a DL ticket in J that I started, and after posting half of it to DL have decided that it was better to post to NW now and acquire Plat on NW than to stick with DL. I can only let you imagine where my next J int'l ticket will post.
Strangely enough, the removal of CRC access for PMs makes me also look at program such a AZ or AK/KL to get access to the CRC/NW WC/CO PC rather than buy a membership with DL.

It is pretty clear to me that all this costs DL in revenue (they have to pay NW for the 12k miles, not counting bonuses of the return of my ticket) and in word of mouth advertisement. Years ago, I would defend DL when people criticized it. Now I do not. I have no reason to feel defensive about DL. The product is much lower than CO in F (I have voiced this several times already) and the SM program does not have the attraction it once had for me.

From all this rambling, here are some thoughts directly related to Jeff's questions:

1. Revenue based system? Forget it. My J tickets involve as much as 5 different airlines. How do you count that? Do you count the $ for what I fly on another airline if the ticket is on DL stock?
2. Revenue based system? Forget it. Most Frequentflyers will swiftly move to either CO and NW or to LCCs if all airlines follow. What a score for legacy carriers.
3. Availability? I think the whole thing is a bit of a joke. From what I understand Credit Card miles bring the airlines in the neighborhood of 1.5ct/mile. So a 25k miles award is 375$ before taxes in value. Most discounted ticket are cheaper than that. Why should it be difficult to get a SkySaver award?
4. Modify the mileage credit? I would be in favor of 2 things: at least double MQM and redeemable miles for C/J class and even imitate LH, BD, AF and giving triple miles for flying in F/A. That would not drive away flyers and instead make higher revenue flyers happier. You can bring the PM back to 100k if you do that.

And of course, my number one pet peeve: make PMUs usable...

I doubt things will go that way but if they did, I'd come back to DL.

Wise people have said before that one should not view a FF program as anything but a system by which to reduce the cost of flying. To do that, you need to analyze your situation. I have done so and now the analysis says DL is not a good option for me.

JT8D-217

Jeff, I have a problem with rewarding fare paid on a particular trip vs rewarding long term loyalty.
You would shower miles (or other perks & upgrades) on, say, an attorney whose secretary booked the only open flight to ORD versus the long-term loyal customer who has purchased thousands of DL fares over time, some high, some low, some TATL BE, who insists on flying DL, even in opposition to company policies, even when DL is at a less convenient time, even when DL means those Barbie Jet torture chambers, even when DL means connecting (or worse, missing the connection).
If you want to run a loyalty program, give us reasons to fly DL even when there are rational reasons not to.
If all you want to do is reward high fare flyers, why not just hand those folks a $100 bill at the boarding door?

wsflyer

Jeff,

Thanks for participating in FT. What I would like out of SkyMiles is more transparency. Frankly, I can't criticize the program too much because I don't know the details. I understand that Delta makes profits from vendors who offer miles. So, I would hope that Delta increases Saver seats available in proportion to miles distributed. If not, then the program is abusing its customers.

From my experience, awards are sometimes available, but I have had better luck with US Airways and United. I'm sure others have different experiences.

I look forward to using the Awards Calendar. I enjoyed it for a few minutes this morning.

Palal

Hi Jeff,

Showers in key airports like JFK and ATL would also be nice.... sometimes coming in on a red-eye from the West Coast, or from Europe, showers would provide a great opportunity to freshen up a bit.

This is probably way out there, but have you considered allowing the redemption of miles (Skysaver) on the day of the flight, on a stand-by basis (in addition to what's there already)? If a seat is available - you got it. Perhaps, if the passenger wants to book a ticket, have them go to the website and see how much availability exists at that point 24 hrs before the flight. Passengers would then be allowed to redeem miles and would take a chance at the airport. Ranking would be done by status level. Now, obviously, the drawback is that if someone had not done this, would they have purchased a skychoice ticket using 2x miles?

Reduce the number of ways one can earn miles on the non-airline 'partners' side. Leave everything else as is. I haven't had problems redeeming miles yet. Just one note -- make sure the mileage levels are the same across all SkyTeam members.

If you want, give more to Y- and F-class pax. Don't de-value the lower fare classes, as that is where [according to my gut instinct] the majority of your status-bearing pax is. They'll (I should say "We'll") jump ship in a second if a better alternative exists. Perhaps combine this with limited earning capacity, and reward frequent flying.

You have x Y pax and 1000x non-Y coach pax. Most that fly on their own dime will switch programs (myself included). Obviously from your point of view, you want to maximize revenue and reward the best customers. Perhaps that is the right thing to do. However, consider the fact that some of those non-Y coach pax may some day become Y-paying pax. If they have been with Delta all these years, they'll stick with DL. However, if you shut them off and they're not likely to come back to DL, once they start paying big bucks for air travel.

As I mentioned above -- if you want to reward ultra-profitable customers, go for it! Just don't under-value all others, as they may become ultra-profitable at some point.


One final thing...

Please respond regarding awards to Eastern Russia. All other US-based ST carriers value these awards at 60K. Why doesn't DL allow them or value them at 60K? I am seriously considering switching programs and am awaiting for DL's clarification on this.

sdadept

I quit flying Delta about a year and a half ago after I had two flights back to back where I had purchased a full Y fare @ $1200 RT and ended up in a middle seat of the very back row right next to the bathroom (both times, what are the odds....). I fly somewhat frequently and was silver/gold medallion on delta for many years but not enough to get the front of the plane on full flights.

Most of the tickets I purchase as well as those of my employees are full fare or FC if I'm travelling cross country and I felt that on Delta I was getting treated worse than leisure travellers who have infinite time to book and work the system. Instead I now fly United due to the coach+ seating. I know that no matter what, when I pay full fare, I'm almost always going to get a good seat. I realize this doesn't matter that much to the $ sensitive leisure traveller, but it's huge to me. I'm fairly tall so having the extra seat pitch is just crucial.

I did fly your airline for the first time in over a year this past weekend ORD-SLC where I purchased a full F fare to get me home when my United flight was cancelled and I will say that it was a very good experience (not enough to make me suffer your Y cabin again though).

So to sum up my rambling here. Treat your high fare passengers much better and consider adding coach+ even if its just the first 4 or 5 rows of coach and only let high fare passengers in it.

RSSrsvp

Hi Jeff,
I also wish to thank you for your active presence here on the board. The mere fact that you are taking your valuable time to post here tells us something about the current mindset at DL. Your efforts on our behalf is sincerely appreciated by all. ^

Echoing what the others have posted, any plan to give us less than 100% MQM's will result in a large number of us defecting. Look at the history of Save Skymiles and the end result. Napoleon made the mistake of invading Russia and so did Hitler. The one lesson that you can take away from this is that history repeats. Please don't make the same mistake that Rob Borden did as it will cost DL business.

I have my own business and when I purchase my tickets I always look for the lowest fares. Most companies force their employees to do the same. If you wish to reward someone for a higher priced fare class that is ok. However do not punish the majority of us that will not follow that path.

There has always been an issue on the availability of B/E seat inventory. It is disgraceful that you have non-revs able to board while Medallions with mega miles in their accounts are stuck in Y. Day of departure upgrades at the gate for international flights must be properly addressed.

There has to be a fairer way to obtain Skysaver awards. One idea that you may wish to pursue is to offer greater availability for award seats when using MQM's type miles in our accounts as opposed to Skymiles that are earned elsewhere. @:-)

In addition, you should offer us one way awards also.

Finally, some time ago there was a two week experiment where there were no restrictions on award availability. If you can reveal the outcome of that test without getting into trouble I would be curious as to the results.

PCMflyer

Jeff,

Your program as it stands now is pretty good. The one year I really had a hard time with was 2004 when you had the half credit for low fares. That year I flew well over 30,000 BIS miles on Delta and ended up with no status. I would have quit using Delta except that you had the only non stop service between TPA and LAX.

Now that you give full credit for discounted fares I'm pretty happy. This year I should fly over 100,000 BIS miles. Hopefully Delta will get a big percentage of that.

There are times when I find it difficult to obtain Sky-saver awards. That might be due to the fact that I live in a tourist destination city. So here is my one suggestion to improve your program:

For every 25,000 MQM's earned, you could issue a certificate (good for two years) that would allow you to use Sky-choice at the points level of Sky-saver. Each certificate would be good for one passenger for a round trip. So if I wanted to fly my whole family somewhere and only had Sky-choice available I would need to have flown 100,000 MQM's to have earned four certificates. The net effect would be that I could then use the unlimited opportunities available with Skychoice but burn the lower amount of banked miles which come with Skysaver.

If a Sky-saver award is already available, then the member could save those certificates for a later opportunity.

I think if you could make this feature part of your program, that hands down you would have the best program available. You would then be rewarding flying and earning MQM's with the best chance for Sky-saver awards.

I would do my best to fly Delta at every chance if I knew I was earning those over-ride certificates.

zedthedeadpoet

I agree with this wholeheartedly!

EchoVictor

Jeff --

The one thing that people seem to forget here is that over a long-period (10-20 years) eventually the 1:1 earnings ratio for credit cards has to break. Airlines have been gaining huge revenue streams selling the miles, and to you guys, it is a big profit center because airlines believe (per SEC filings) that there is virtually no "cost" to these sales.

Think about it -- the distance between two cities or the distance your customers fly ultimately is relatively fixed. LGA-ATL will always be about 761 miles. But on the credit card side, we constantly have inflation that drives up spending every year -- Amex talks about it on their conference calls that average spending on branded cards like the Delta cards goes up every year. I'd wager that because this 1:1 ratio (or better, since many Amex charges get 2 miles per dollar) hasn't changed, the percentage of total Skymiles earned coming from non-flying sources has gone up every year.

This is great for the airline to a point, because you sell the miles and hence gain an additional revenue stream. But ultimately, unless you recognize this revenue stream has a true cost (the need to allocate more seats to award tickets), you are just punishing those of us who get a majority of our miles by buying Delta tickets -- not shopping at some random retailer and using a Delta branded Amex.

If you go back to making the frequent flier program about frequent fliers, then that ultimately solves your problem. If you want to keep selling miles to partners, that's great -- but recognize this revenue has a cost! And the cost is the need to allocate more award seats to not piss off your loyal fliers.

So bottom line -- my preference would be to make it tougher to earn miles from not flying (ie charge your partners more) while linking mileage sales to award seats. Where you do sell miles to partners, you should have a definitive link in your system somewhere so that for every XX miles you sell, you grant an incremental XX award seats somewhere in your system. Today's generally positive revenue/pricing environment for airlines presents the opportunity to move more of your program back towards fliers.

anc305

I normally dont look at the Delta thread that much anymore. I was a loyal Delta man for 15 years . Over 2 million miles . Switched to American about 5 years ago as I did not feel that me nor my company was getting a good value for the 10-12 international full J fares. About $80-$100k per year in revenue. No possiblity for upgrade to First as that class was eliminated on international flights. Lots of 767's with the narrow 2x2x2 configuration. The Skyteam partners were nothing to write home about. But the final straw was when calling Delta one night to try and get an award ticket in Bussiness for my wife to come see me in Europe ( Paris to be exact ). No avaiilbility for 3 months ( Apr-Jun ). When I asked what was the first availble ATL-CDG flight , she said I do not have time to check . That was my last call to Delta.

Delta folks , keep your flame throwers in your holster. This is not ment as a rant or a slam . Just a case of not giving a high yield customer enough reason to stay loyal. Even if you are a leisure , low yield traveller , it is in your best interest for your airline of preference to keep their highest revenue fliers happy . You cant expect to fly first and business class on an award if thier isnt anyone willing to pay for it on a revenue basis . If I spend $100k per year flying Business class , I expect an award seat in the same class and not for 250k.

zedthedeadpoet

I have to agree with this as well. Why not additional inventories for PMs and/or GMs in the front cabin? Or maybe instead of a PMU, give us a one-time or two-time voucher to "upgrade" a SkyChoice to a SkySaver.

Good idea too.

mtparadis

No it doesn't. Something has to change, but it could just as easily be award mileage inflation (already happened and will continue to happen) and faster expiration of miles (already happened).

I personally would like to also see it become harder to earn miles, but I think an airline that tries to do so is going to really lose a lot of customer goodwill. I've been able to do well redeeming my miles but only because of the knowledge I've gained here at FT. Your average mile-holder will probably just call up or get online and if they don't find any SkySaver in 5 minutes they'll either: 1) book the SkyChoice, 2) buy the ticket, 3) not take the trip, or 4) come onto FT and b*tch about the lack of SkySaver (or maybe a combination of the four).

Back to the original post, I don't think a revenue-based FF program will be popular anytime soon. Independence Air tried it, and some other airlines sort-of tried it or are trying it with 50% EQMs. Many hotel chains are able to have a revenue based program (fixed points/miles per $) by compensating slightly with stay/night credit toward elite status, along with options to earned fixed points/miles per stay. Without segment credit, that trade-off would not exist on DL.