Delta Continues to Chisel Away At SkyMiles Program- Announces Mileage Accrual Based on Spend

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Delta has been devaluing their SkyMiles program for years by increasing the amount of miles you need for award tickets to outrageous levels on some routes. There have been rumors (that I wrote about in 2012) about them going to a revenue based program and it appears that they are very closed to announcing drastic changes to the program beginning in 2015.

Delta announced today that you’ll likely be earning less SkyMiles than you normally do based on a new revenue based earning program. While full details are yet to be released, CNN reports that the base earning will be 5 miles per dollar spent and it will increase with elite status. So bottom line- you will no longer earn miles based on how far you fly, which is a fundamental change for a legacy frequent flyer program (Southwest/JetBlue/Virgin America currently have revenue based programs and, to me, they take the fun out of being able to maximize and leverage your points for great value. Apparently the amount of SkyMiles you’ll earn in the new program will increase by your elite level, but even at the highest levels you may still earn less miles than in today’s program, plus you also have to take into account that there are two more award chart devaluations to come making those miles even less valuable than they are today. 

So basically, if you’re flying short-haul/expensive flights you may earn a lot more miles than you would by simply flying the short distance. But for most travelers, you’re probably going to net a lot less miles. 

I’ll wait to judge until I see details, but basically this will be horrible for most consumers, except those who pay exorbitant amounts for their flights may see a slight increase. But even if your company foots the bill for expensive business class seats, I urge you to not be swayed into thinking Delta values you more. Remember: SkyMiles are among the least valuable frequent flyer currency in existence. You may do much, much better flying another airline whose miles are valuable. Delta blocks all international first class awards and has an atrocious website- not all airlines are the same.

Mainstream Misunderstanding
I see the initial reaction by the mainstream media to be “well they’re catering to their best customers, so that might actually make sense”, but I think there needs to be a more pro-consumer voice warning that this is actually just another slash to a program that has been decaying for years. I wonder if those high-spending business travelers also love the new increased SkyClub fees and inability to bring free guests. Or that Delta blocks them from redeeming for international first class on partner airlines? And even if your company is paying for your business class fares, Delta makes upgrading your partner/friend/spouse exorbitant if they want to come along on one of those international business trips. Or that Delta no longer gives complimentary upgrades on transcontinental flights. So basically, I think you need to take a high-level approach to analyzing SkyMiles against other programs before coming to the simple conclusion that this change is positive for business travelers (let alone anyone else, because I so believe that airlines should also value non-full fare paying passengers).

I used to be a Diamond Medallion and have since dropped to Platinum, but have focused instead on building Executive Platinum on American Airlines. After hearing this news I’m extremely glad I’ve dropped loyalty to Delta, because I prefer to accrue miles in programs that are also rewarding for the consumer. I personally do not believe that loyalty should be one way. However, I do understand why people continue to remain loyal to Delta, especially for those who are hub-captives and don’t have the same route network. However, the only way Delta might stop devaluing their program is if they see a  loss in business and if you never voice your concerns or actually take action, then you’re partially to blame for the devaluation.

A Neverending Devaluation
In addition to jaw-dropping award levels (which will be even worse after their two devaluations to come this year), Delta also recently announce the Medallion Qualifying Dollar program that adds another hoop to jump through to attain elite status- US SkyMiles members not only need to accrue Medallion Qualifying Miles to achieve elite status but also hit MQD spend (10 cents per mile, so Platinum Medallion reuiqres $7,500 spent on Delta ticketed flights in addition to accruing 75,000 MQMs. Members can be excluded form the MQD program if they spend 25k or more ontheir Delta Amex, but there’s an opportunity cost to spending that much on a Delta Amex that only earns 1x on all purchases vs. cards like the Amex Premier Rewards Gold that earn 3 points per dollar on flights booked directly with airlines, 2 points per dollar on US supermarkets, and one point per dollar on other transactions and groceries and the Barclaycard Arrival that offers 2x on all purchases. So even though you may be able to hit that $25k in spend, think about the points youre leaving on the table by not using better earning cards.

Anyway, the full details are supposed to be released at 5am Eastern Time and I’m about to board a 9 hour (non-Delta) flight from Honolulu to Newark, so I’ll do an updated post when I land- after I wake up hoping this was all a bad dream and that no other boneheaded airlines match this policy!

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