bocastephen

Maybe I'm trying to analyze this too late at night, but with the recent massive devaluation for international awards, how exactly can the average customer ever earn enough miles/points to redeem free tickets?

A 1k who just hits the unpopular 10K spending threshold would earn what, 10pt*10,000 or 100,000 miles per year? Right now they earn 200,000 miles per year with the 100% bonus. This would be a 50% devaluation.

Sure the big spenders will win big, while the lower spenders will lose big. How do we factor in credit card spend? Good manufactured spend opportunities would restore a level playing field and trick the airline at its own game.

So the first step (PQD) was designed to tell lower spenders they cannot have their Elite status anymore, and this second step is to tell lower spenders they cannot redeem free tickets anymore - essentially making these programs worthless for Kettle flyers and creating a serious devaluation for rank and file frequent flyers - and just leaving a valuable and useful program for those who are buying F/Y/B fares and nothing else.

We're only see one side of the coin without having access to the new redemption charts - that will be the most interesting part of the change given how DL also devalued their international redemptions before UA.

sinoflyer

First, award devaluation, and now, up to 50% reduction in mileage earning? Sounds too radical to be credible. Besides, if DL goes through with this, it will turn "loyalty" on its head. For most of the traveling public that doesn't fly full-fare on the company's dime, this is actually a disincentive to stay loyal.

I'll take a wait-and-see approach, but I kinda like the idea of being liberated to fly with whomever and no longer feeling the constant pressure to stick with one airline or alliance.

spin88

I am reading this as being (a) smart if they keep status miles they way they are, and (b) being neutral as to miles awarded for the typical business traveler (who DAL wants to attract). Delta's average yield (what they actually get) was roughly 15 c/mi in 2013. So assuming a business passenger is paying 20 c/mi on average, then they will end up getting about the same miles they get today (e.g. PLT Med gets 150K miles/year currently, gets 150K miles under the new system at 20 c/mi).

Globally:

(1) those flying shorter more expensive (c/mi) flights win
(2) those flying more expensive Coach fares (which don't currently get a bonus) win
(3) those flying discount transcons/mid-cons lose
(4) those flying discount Y on overseas flights lose big

All of this assumes the mileage chart/availability does not change. My guess is DAL improves that, otherwise it is not going to pick up high value fliers who are concerned by the SkyPeso program's poor award rates.

nall

For many hotel programs (e.g., Starwood, Marriott, .etc), you receive points based on spend but elite qualification is based on nights/stays.

uastarflyer

So $2,000 in airfare and you earn. 10,000 miles. And you still need 25,000 to redeem a RT award.

That is how I interpret DL's turd. Is that how others interpret it ?

javabytes

Pretty much, if you're a general member. If you are a Diamond using a DL AmEx, that $2k in airfare nets 26,000 miles.

However, the number of tiers on the award chart is going from 3 to 5. While the charts themselves haven't been published, and it sounds like they won't be for another 6-9 months, the move from 2 tiers to 3 was not beneficial to DL flyers and I wouldn't expect anything different this time around.

sinoflyer

That's exactly what I was thinking. Perhaps they really are blinded by the promise of "HVFs," but this will effectively end the loyalty of anyone below DM, which is like 90% (probably higher) of the current program members.

whakojacko

Bloodbath. Can't wait to see everyone flock to AA when they release their slightly less bad program. Aren't oligopolies fun?

mherdeg

Ugh. A move to "spend based earning and price based redemption" for frequent-flyer miles represents a 50-90% devaluation for savvy travelers and represents no change for consumers who fly 2x/year and think "obviously a spend-based program would make more sense than this Byzantine maze."

Well, folks, it has been a fun few decades for frequent-flyer programs. Looks like we can all stop worrying about maximizing mileage now and just buy the lowest fare from the cheapest carrier, Hipmunk style.

Will the last one out turn off the lights?

hirohito888

I have absolute faith that Smisek and his crew will follow DL's changes.

LaserSailor

Yikes, it's nasty over on that thread.....

Is there really anyone in the universe that thinks the three legacies are not going to move in lock step in FFP?

I do think that top tiers will get decent benefits on all three. There will be no more spend/churn/MR/cc paths to these top tiers. People doing 6 trips to Asia won't hit top tier without big spend.

Capacity controls will be tier dependent and flying up front on miles will be nostalgic

lhrsfo

It was good while it lasted...

demkr

Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 7_0_6 like Mac OS X) AppleWebKit/537.51.1 (KHTML, like Gecko) Version/7.0 Mobile/11B651 Safari/9537.53)

Smisek's motto is to copy DL, with the exception of IFE installation of course.

Yep. Sadly, FF programs are basically finished. Perhaps all these mergers shouldn't have been rubberstamped

mh3265a

Sadly I see United jumping on-board with this type of change soon.

If UA were smart they'd keep the current program to differentiate with DL and try to ply upset DL fliers but that's NOT UA's model. Hope AA will come out with their new program soon.....

DWFI

DOJ should be patting itself on the back for looking out for consumer interest and letting the industry consolidate and collude.