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Is Delta Really The Best Airline For Premium and Business Travelers?

by on February 28, 2014 · 92 comments

in Delta

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As part of its sweeping SkyMiles changes announcement, Delta said that part of the reason it is instituting a new revenue-based mileage-earning structure is, “The updated mileage-earning plan, for travel beginning Jan. 1, 2015, will better recognize frequent business travelers and those less frequent leisure customers who purchase premium fares.”

I wholeheartedly disagree with the sentiment that Delta is all about focusing on premium and business travelers, but sadly many people are taking the bait, including Randy Petersen, editor of InsideFlyer magazine and founder of Flyertalk, who told the AP: “If you’re a corporate traveler, the IBM guy, this is good for you. The infrequent traveler clearly is the loser here. Frequent-flier programs are no longer for them at all.”

This is just silly for a couple reasons – not all business travelers are buying super expensive tickets. In fact I know people who work at IBM and you can’t just purchase a full-fare first class ticket for any flight you want. As for the statement that frequent flyer programs are no longer for the infrequent traveler, that is just not true considering the easiest way to rack up a boatload of frequent flyer miles is by getting credit cards. You don’t even need to step on a plane to start flying on award tickets around the world, so how can you say that these programs are not for infrequent flyers? I’d argue the opposite – that it isn’t even about flying anymore, but rather spending.

While I don’t think anyone will argue that the new fare-based earning system is geared toward travelers who purchase premium tickets, but is the entire program as a whole more generous for those travelers compared to other frequent flyer programs?  Let’s take a look at the SkyMiles program and various changes and announcements Delta has recently come out with to put it to the test.

The Business Traveler

I spent four years as a road warrior recruiting top university students across North America for Morgan Stanley, so I definitely come from a business traveler mindset. In my opinion, work travel can be exhausting, and my primary concerns were having flexibility and feeling like I was being taken care of with personalized service and things like elite recognition and lounge access. I also recognized that it was an amazing opportunity to rack up miles and points so that on what limited time off you do have, you can blow it out of the water and have some amazing trips. Having met a lot of TPG readers and heard from you, I know a lot of you are in the same boat.

So with that in mind, let’s see if what Delta has done to the SkyMiles program lately is really mean to woo and keep business travelers who want to maximize their time on the road to take great leisure trips.

Has Delta's recent devaluation got you rethinking your elite status?

1. Medallion Qualifying Dollars: Delta also hailed this sweeping change to its elite status program – where you must spend between $2,500-$12,500 per calendar year on airfares depending on your elite level, or $25,000 on a co-branded Delta Amex in addition to flying the miles/segments necessary – as a boon to business travelers. According to SkyMiles Vice President Jeff Robertson, “Adding a revenue component to the SkyMiles Medallion program ensures that our most valued customers receive the best program benefits and a more exclusive experience.” But I do not see any actual benefit to this – it’s just another hoop to jump through. Some people might say that this will thin the elite herd, and perhaps that is true – we’ll have to see what the Medallion program looks like come 2015. But in the process, the airline is also turning its back on a huge segment of its most frequent flyers who fly a lot but on discount fares that are often mandated by corporate policy. Corporate travel also often mandates flying on the cheapest carrier- even for those super-expensive business class international fares. To add insult to injury Delta does not count partner travel towards MQD’s unless you book them through Delta and make sure they are Delta codeshares,  so a KLM ticketed $10,000 ticket to Europe might earn $0 MQD’s if you’re not extremely careful! I know a lot of business travelers who are at the mercy of their corporate travel department and cannot justify spending more to get their flights ticketed as a Delta codeshare, so sadly the MQD program is negative for many business travelers who need to rely on global alliances and partnerships. See: Determining What Spending Counts Toward Medallion Qualifying Dollars

2. Diminishing Partnerships: Global airline alliances and partner airlines are key to business travelers who need to get around the globe and earn elite status while doing it. However, Delta recently moved to punish travelers who need to fly on partners by slashing the amount of  Medallion Qualifying Miles they earn, and flights ticketed on partners (rather than through Delta) do not even earn MQD’s, which could severely hamper elite status and thus mileage-earning in the new 2015 program. Is punishing traveling for flying on partners something that is good for international business travelers?

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3. Lounge Access Restrictions: Delta recently jacked up the price of lounge membership from $450 to $695 (for the same level of membership/guest access), and that new basic Individual memberships at the $450 price level as well as access from co-branded credit cards like the Delta Reserve and partners like the Amex Platinum would only include the cardholder him/herself, so no bringing work colleagues on work trips, or your sweetheart on your leisure trips in for free with you thanks to your membership anymore. Do you think business travelers enjoy paying more for lounge access and not being able to bring in any guests for free via credit card memberships?

Delta's new award chart.

Delta’s new award chart, but more to come

4. Award Chart Devaluations: Not only did Delta announce a major devaluation to its award chart that would increase redemption levels on most premium international awards (by up to 25% in some cases like North America to Europe and Southern South America) and go into effect for travel booked for on or after June 1, 2014, but a few months later, it decided that that was not soon enough and announced another smaller devaluation that just went into effect February 1 where domestic business/first and both economy and premium awards to Hawaii among several others went up 5,000-10,000 miles. So if you were racking up all those miles from work in the hopes of using them on a great international award…you better keep saving because you’ll need more of them!

Now, part of Delta’s announcement yesterday was that it would be restructuring its awards into a five-tier system, but the airline didn’t release any details on those, which leads me to believe that they, too, will be negative. However (and I’m no PR professional here), I think that if the redemption changes were truly positive, they would have released them yesterday to counterbalance the bad news that they dumped at midnight on a Tuesday. Something leads me to believe that after Delta has revamped both its earning structure and elite status program to be revenue-based, though, that it’s not going to be long before the redemption side is as well meaning those business class awards are going to skyrocket- potentially at a greater pace than the earning ratios have been increased/decreased based on the fares and routes you fly. So basically your business travel could get a whole lot less rewarding.

Same Day Changes

5. Same Day Confirmed Changes: As I said, one of the most important considerations for business travelers is flexibility. Meeting times change, projects come up, emergencies happen – you’ve got to be able to change your itinerary at a moment’s notice, and it’s important to pick an airline that lets you do so easily…or at least doesn’t penalize you with huge fees for doing so. In April, however, Delta seriously gutted the ability to use Same Day Confirmed flight changes, mandating that a traveler’s originally purchased fare class must be available on the new flight in order to switch to another flight on the day of departure. The airline positioned this as an enhancement because they opened up the window to change your flight to any flight on your day of departure versus just within 3 hours before or after. However, the $50 fee still applied to Gold/Platinum/Diamond Medallions who wanted to change outside of that 3 hour window – so clearly the move was a revenue play for Delta. Under the new rules, you could still standby for a seat ($50 for Silver Medallion and non-elites) or if you wanted to confirm and your fare class was not available, you’d have to rebook into an available class, usually at a $150 change fee plus re-fare. Well, they must have gotten an earful because they did backpedal on this one and allow Gold and higher Medallions to confirm onto a flight within 24 hours of departure. However, the fare class requirement still stands, which is a major downside in my opinion. I’d rather have the option to pay $50 to Same Day Confirm within 24 hours under the old rules (as long as there is any availability in your cabin) than having the fee waived, but having to switch into your same fare class.

Additionally, Delta has pulled upgrade availability from ExpertFlyer (a favorite tool amongst business travelers), which is not an enhancement, no matter how you slice it.

6. Restricted Transcon Upgrades: The transcontinental routes from Los Angeles, San Francisco and Seattle to New York are among the most heavily trafficked and profitable for Delta (and the other legacies), and are usually brimming with business travelers. While upgrades used to be complimentary based on Medallion status, back in December, Delta announced that complimentary upgrades for the transcontinental BusinessElite routes (currently assigned at the gate based on availability) will no longer be a general Medallion benefit. Instead, Diamond Medallions can select to upgrade on those routes (and other international routes) using new Global upgrades or miles. They may be redeemed for the named Medallion member and up to one travel companion in the same reservation, and the named member and the companion will each require a separate certificate. On the plus side, Global upgrades will be eligible on pretty much all paid fare classes for International and Domestic BusinessElite routes): Y, B, M, S, H, Q, K, L, U, T, X or V classes, and upgrades to Hawaii from LAX/SEA/SFO and SLC are now eligible for complimentary Medallion upgrades, which is a nice change for leisure travelers, but probably not too many business travelers. The bottom line is that Delta is making people pay a premium for their BusinessElite product. I’ve personally spoken to a lot of business travelers who are not happy that this has been taken away, and have asked Delta to explain how this is an enhancement for business travelers. No answer yet that I know of.

7. Website Issues: One of the most frustrating parts of being a Delta customer is trying to use its website to book awards. The Delta award search engine is broken, plain and simple. Not only is it impossible to search for both economy and business class at once, or to use the calendar function with most partners, but it is extremely difficult to find much partner availability – even when it exists – and you have to be very specific about routing and what your search requests contain in order to find the space. Delta also blocks all partner first class awards, meaning you can’t even book them at all. If there’s one thing you want as a business traveler, it’s an efficient, functional web site to book travel, and Delta’s is fairly miserable on this count.

Delta's transcon lie-flat BusinessElite seats.

Delta’s transcon lie-flat BusinessElite seats.

8. No International First Class Product: I keep reading that Delta is making these changes to cater to “big spenders.” Even if you’re a lucky business traveler whose company pays for business class – that is as good as you’ll get. On carriers like United and American, you can upgrade from business to first class, getting an even more exclusive experience (think AA Flagship service) and a roomier seat. If you’re a super-rich leisure traveler wouldn’t you want the ability to travel in first class internationally? Beyond that Delta also blocks all partner first class awards so if you like high-end travel, SkyMiles is not the program for redeeming for those sorts of travel experiences. For instance, if you’re an American Airlines flyer, at least you can use your miles for a first class award on Cathay Pacific or British Airways, or you can use your United miles for Lufthansa or ANA first class (granted, at exorbitant levels now), but Delta won’t let you book that Korean Air first class award. How is that business or premium-traveler friendly?

Lipstick on a…Plane?

I’m not saying all this to bash Delta again and again. They’re a business and they have shareholders. But I do believe they feel like these SkyMiles changes will improve the bottom line because they will be giving less value back to their frequent flyers. This is a revenue play, pure and simple, and not simply an enhancement of benefits  for the “premium” and “business” traveler.

It is within Delta’s rights to devalue their program, but it is also within the consumers’ rights to vote with their wallet, and that’s what I’d encourage anyone to do if they’re unhappy with Delta’s recent spate of devaluations and negative policy “enhancements.” If not, you can be sure that other airlines will continue to devalue their programs at alarming rates, which I’m hoping United and American don’t do, and Delta learns a hard lesson that consumers do want value from their frequent flyer programs. I started breaking up with Delta last year and I’m happy I did. No airline is perfect, but there are hugely valuable programs out there and I think they should be rewarded. So, Delta, as far as I’m concerned, you’re officially dumped.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • bltn95

    Worth repeating:

    … but it is also within the consumers’ rights to vote with their wallet,
    and that;s what I’d encourage anyone to do if they’re unhappy with
    Delta’s recent spate of devaluations and negative policy “enhancements.”
    If not, you can be sure that other airlines will continue to devalue
    their programs at alarming rates…

  • Chris

    “The bottom line is that Delta is making people pay a premium for their BusinessElite product”

    What a horrible idea from a business point of view to charge more for superior service…

    Seriously, I think this blog has given you an odd view. Airlines have FF to make their business more profitable, not to give away free premium flights to random people.

  • Justin

    They are painful. I’ve all but given up on them and no longer carry any Delta cards. Since I’m based equidistant between PHL and EWR I’m going to focus my air travel on US Air/AA from now on.

  • thepointsguy

    Who is giving free premium flights to random people? Sign me up!

    The point is that these frequent flyer programs are hugely profitable and frequent flyers bring a disproportionate amount of business to an airline. Delta has slashed their program’s value significantly over the years and there are other airlines/programs that have not- at least not to the degree of Delta. So from a pro-consumer standpoint, you can take it or go to a different airline that might be better for your needs. Not sure what is so revolutionary about that concept.

  • Chris

    Giving free flights to random (from the airlines point of view) people is what this whole credit card sign-up / mileage run business is all about. Now Delta is cracking down on this and restricts benefits to high spenders, and all the blogs argue that this is highly consumer unfriendly. But it is not, it is just removing some of the madness from the current system. Both the airline and most regular consumers will be better off under the new rules in 2015.

  • flyskyteam

    I have been a long time Delta Platinum, based upon both business and personal travel. This new structure is an absolute disaster, and enough for me to find another program. I have an upcoming full fare business class Asia trip, and I normally would go out of my way to fly on a Delta ticket. No longer… I am now taking a mix of Cathay and BA. Why am I going to go out of my way if Delta is going to create a convoluted system with a product that doesn’t warrant it. I hope that DL gets their act together by firing whoever is mucking with the SkyMiles program and realizing that their real “sweet spot” are people like myself who fly a mix of personal / business and are extremely loyal to one carrier who want a simple system that makes sense and doesn’t treat us like third rate flyers. This is a sad day for Delta.

  • NJ

    Thank you, Brian, for highlighting the decidedly horrible approach that Delta has taken with SkyMiles. If I were you, however, I would go one step further and stage an act of protest.

    Delta’s management will likely plow forward with these changes unless consumers stop using their Delta credit cards. To that end, you should consider removing your affiliate links to all Delta cards and encourage other bloggers in the miles and points community to follow your lead. In addition, you should urge existing Delta cardholders to switch to co-branded cards from either United or American.

    It is critical that there is a consumer response to these negative changes; if the frequent flyer community does nothing but complain, then United and American’s management teams will feel enabled to follow Delta’s lead.

    As the leading blogger in the miles and points community, you have a great deal of power to persuade: use it.

  • SL

    Brian, thank you so
    very much for putting the Delta changes in perceptive. All my friends, family and collogues know that
    I follow you and therefore wanted my thoughts on the latest Delta news.

    I shared with them that I was holding out hope that even though
    it’s going to be way more difficult to earn miles, redeeming award travel will
    be allot easier. I must have been in Denial! I now agree with your thoughts that you’d
    think Delta would have tried to soften the blow with Great news on redeeming miles
    in 2015. The fact they haven’t told us, tells
    me they are waiting for folks to get back up off the floor so they can knock us
    down again. Short term I’m sure it’s going
    to move the stock price which is what they care about most. I now have done a 180 and think it’s going to
    continue to be bad and get worse with Delta, unless folks with choices truly vote
    with their wallets, which is easier said than done as they say..

    Sick feeling as I live in Atl and enjoy direct flights to
    most anywhere.

    Maybe you can find a silver lining for us stuck in a major Delta
    Hub?

  • Matt

    “better recognize frequent business travelers and those less frequent leisure customers who purchase premium fares.”

    Delta didn’t say they’re focusing on business travelers who buy premium fares – just business travelers who happen to repeat their business. The individuals who buy premium tickets were a completely separate bucket. Delta wants people who either a) travel a lot or b) buy expensive tickets. Not people who travel a lot and buy expensive tickets (although they’d take that).

    It’s a smart strategy.

  • Jennifer

    I’m a Platinum Medallion flyer and I don’t have an issue with these changes. Quite frankly I see these changes as a way to reduce the competition for upgrades. I’d rather flyers who travel frequently for business, as I do, get the benefits/rewards vs. in-frequent flyers who get perks because of credit card use. I use the Platinum Amex as well, but like the thought of getting miles based upon the cost of my ticket. In most cases, with the routes I fly and the tickets I purchase, I’ll actually benefit significantly from the changes. One thing to keep in mind is that the FF programs don’t have to exist and I’d still have to travel for work, so I appreciate the opportunity to receive upgrades and free tickets for vacation travel. I don’t feel that the sense of entitlement and overall whining about these changes is very productive.

  • SW

    Those aren’t free. If any company designs a program and chooses to ignore the redemption costs of loyalty or rewards programs, just calling them inept would be highly generous. Ignoring mileage runs and cards, you have to ask yourself as a consumer whether you’d prefer Delta over other airlines. Personally, and from what I gather many others, feel the answer is no.

  • thepointsguy

    But Jennifer, someone can spend enough on their Delta Amex cards to get 100,000 MQMs per year without stepping on a plane. And since they have the Delta Reserve, they trump any other Platinum Medallion in upgrade priority in their fare class. If Delta wanted to reward those who fly on planes, why do they make it so easy to bank elite miles via credit card?

    http://thepointsguy.com/2014/02/choosing-the-right-delta-american-express-card-for-you/

  • thepointsguy

    Silver lining right now is that you can still fly Delta and bank your miles to Alaska Airlines. Their miles are roughly worth double what SkyMiles are in my opinion

  • thepointsguy

    Delta is not cracking down on this whatsoever and is probably the biggest leader in giving away miles/elite miles via credit cards. So I don’t understand your point.

  • Jennifer

    TPG,

    I know of no Delta card that offers 100K MQM per year, unless you’re including spend + new card incentives. I’m not too worried about that particular scenario crowding me out on benefits. If there is a Delta card that offers 100K MQM per year for spend only, tell me which one it is and I’ll switch as I’m sure I’d also get the max MQM which further reduces my competition for perks.

  • thepointsguy

    I didn’t say it was one card. There is a Delta Platinum personal and business that offer 20k MQMs per year each and a Delta Reserve personal and business at 30k MQM each after spend thresholds. So technically you can mint 100,000 MQMs a year without stepping foot on a Delta plane. I know business owners who do in fact do this and have been for years, rolling over every year to ensure Diamond in perpetuity, so these people trump you for upgrades even though you fly more.

  • Caitlin

    If you are a business traveler and JFK is your base then these changes are not beneficial. I frequently fly to CA and my company is based in Washington. The fact they Delta took away the continental upgrades is a slap in the face. Most businesses and people trying to manage their P&L wont spend 3K on a ticket to fly business elite. I will switch airlines and cancel my Delta credit card if they don’t change this policy.

  • Trae Stewart

    Analytic point-by-point analysis and refutation with a sassy final line = Great first read of the morning. And, I’m with you. Delta has lost a medallion member with these changes.

  • Mehul Sheth

    Preach it! I am posting this everywhere I can as I only see the other airlines trying to spin similar changes as “business freindly” when they are the opposite

  • Greg A

    I have been a loyal Delta flyer for over 5 years. I book all of my
    tickets with my hard-earned money and have earned Platinum status with
    my own wallet.

    While a $500 ticket may be cheap in comparison to people who fly for
    business and pay thousands of dollars for a ticket, $500 is a lot of
    money to me. I need to be able to buy tickets that are within my budget.
    Punishing and devaluing those who are budget conscious and leisure
    travelers is just wrong. Those who pay more should be rewarded more.
    However, don’t punish the little guy and devalue the budget conscious
    medallions who have earned their status without relying on their
    corporation to pay for all of their tickets.

    It is even worse that they have left out the “new” award chart. Delta knows that the Delta frequent flyer is a sucker and will continue to rack up miles this year before the 2015 devaluation. Then at the last possible minute, they will bring on the news that it will be more expensive to redeem miles.

    When I am booking a flight, I TURN to Delta because I know that I will
    earn more miles if I book with them as a Platinum medallion. This is
    important to me and WAS an important perk of the Medallion program. For
    the budget and leisure traveler, there no longer is a reason to stick
    with Delta any longer. Even as a Platinum, upgrades are hard to come by
    and now miles will be hard to come by as well.

    Shame on Delta for not valuing my loyalty.

  • Trae Stewart

    What do you mean by “bank”? All I’ve seen is the match opportunity for elite status. I don’t think you can transfer the skymiles to Alaska, right?

  • Sl

    Thanks so much.
    Do you mind taking us through at a high level at least on
    the process for Converting Delta Miles to Alaska miles? Is “Converting” the right word to describe per se? OR do I book a ticket on Delta web site for an Alaska flight and use my miles that way?

  • Richard Kahn

    What we are experiencing is the end of a great golden age. There was competition and they needed FF programs to lure our business. Merger after merger happened and now from the airline’s standpoint, they are seeing less and less a need to spend on benefits. It was great while it lasted and we will really miss it when it is finally over – as the light continues to slowly dim. I don’t know when, but even The Points Guy will eventually have few things to write about. Brian, I hold up a glass to you!

  • thepointsguy

    When you fly Delta, just add your Alaska Mileage Plan number to your reservation and you’ll get miles directly deposited into your Alaska account- http://www.alaskaair.com/content/mileage-plan/partners/delta.aspx

  • thepointsguy

    You can’t convert Delta to Alaska- you simply can forego SkyMiles and instead put your Alaska number on all of your reservations and you’ll auto-earn into Alaska instead http://www.alaskaair.com/content/mileage-plan/partners/delta.aspx

  • flyskyteam

    I agree with you, and the loss of the trans con UG’s was the first (and possibly second) strike for me. I used you get 9k miles r/t to LAX but now with the new system, I would get about 3k.

  • Matt

    Based on where I live I really only have two choices for airlines, Delta and United. After a miserable year with United (& ORD) I told myself I’d never go back, well I guess I shouldn’t have said never.

  • Chris

    I don’t see how you could not think about introducing all these revenue requirements as (partially) cracking down on the practice of giving lots of benefits to low-spending consumers. But maybe we just disagree here.

    My bigger point is this. You seem to overestimate the importance of a generous frequent flier program for an airline. It does not matter as much as you think. Delta obviously believes that people will value a good inflight experience, and that they don’t need to be incentivized to fly Delta by handing out lots of free stuff. Their profits have been going up a lot recently, so they arguably have a point.

    Limiting elite benefits like complimentary upgrades is also going to be good for consumers in the long run. I know many people that would rather pay a moderate amount (maybe with a discount for frequent fliers) to sit in First than to play gate roulette based on status. Both consumer welfare and airline revenues go up in this case; everybody is happy…

  • Darth Chocolate

    Since when does someone who churns credit cards for bonus points a Frequent Flyer?

    That practice does nothing but degrade the “Premium” experience for those of us who actually, you know, FLY.

    Thinning the herd is long overdue.

    When everyone has status *nobody* has status.

  • Sl

    Thanks so much as that helps me going Forward flying on Delta by putting those miles away on Alaska.
    But my last question is if I already have Silver Status on Delta with several hundred thou. DL miles can I “convert” those existing miles to Alaska? Either all at once or when I book a Alaska Air tix? What do you suggest?

  • Darth Chocolate

    Until either Delta buys Alaska or the partnership ends.

    Take your pick.

  • thepointsguy

    I don’t think it is a slam dunk that frequent flyers don’t need/care about value and benefits. There may be less competition than there was years ago, but I do think savvy consumers will re-think loyalty when much more generous options exist.

    As for the pro-consumer upgrade angle- how are consumers better with less benefits? Delta hasn’t announced any new cheaper upgrade program. Delta has been posting profits in the billions without this change, so it’s not like they’ve been struggling to maintain frequent flyer benefits.

    This is unchartered territory- if consumers don’t know any better and don’t care about the loss of value/benefits then Delta wins. I don’t think Delta is doing anything illegal/unethical and I wish them the best. I just want to make sure consumers see what is happening so they can react accordingly.

  • TwoCoasts

    I am a current Medallion Diamond and am leaving Delta for the very reasons you’ve posted. I am sending a special handling letter to the CEO and the gentleman in charge of the Medallion program that my leaving is truly an ugly breakup. Taking it a step further, duplicates will be sent to their counterparts at AA and United. The theme of the letter…Hogs get fat and pigs get slaughtered. Somehow, Delta seems to believe that buying Virgin Atlantic somehow catapults them into the premium business category. Their greed and miscalculation couldn’t be more misguided. Not only did they generally lose my business, I will now go out of my way never to give them a dime of my money. Business school 101: the only thing worse than losing a customer is having one willing to go out of their way to tell people how much they dislike their past supplier. The mere number of negative changes cascading at us has made my head spin. Adios Delta. PS…I’d keep the ‘folksey’ theme of your welcome video with Richard Anderson sporting a southern accent…looks like that is all you got left.

  • thepointsguy

    See, Delta isn’t taking away the MQMs from credit cards. In fact Delta is making people spend on credit cards to avoid MQDs and still offering up to 100,000 MQMs per year for credit card spend. So I don’t understand why people keep saying the game is over for the credit card “churner”. If anything, its now more valuable to have credit cards since earning miles via flying is less lucrative. Right?

  • thepointsguy

    I wouldn’t necessarily say that it is coming to an end- just simply evolving (devolving?). These programs are billion dollar marketing machines, so they aren’t going away anytime soon. However, you do need to be as savvy as ever and choose to give business to the companies that give you the most value back for your spend.

  • thepointsguy

    Delta is making it clear that even travelers who repeat their business will earn less if they spend less on fares. Those who spend more (premium) will earn more.

    Whether its a smart strategy is yet to be seen- even premium travelers sometimes buy cheap tickets and they also like high end benefits (like being able to fly first class or redeem miles for intl first class, which Delta does not allow). If savvy flyers take their business to other carriers who give them better perks, then this move may not be so smart.

  • Darth Chocolate

    Assuming one actually flies for the miles.

    Personally, I have 4 trips to France and 4 trips to China scheduled for this year; that number may well go higher. I have no time to use rewards – in 2013 I redeemed 9 R/T economy tickets and used only 1 for myself.

    Also, you make the blind assumption that the rewards chart will be “worse”. Perhaps, but who really knows? Certainly not you, unless you have been sworn to secrecy.

    So the churners get to keep their “Status”, but they are bitching and moaning about how they are getting screwed out of redeemable miles. Everyone must make their own determination, but face it – if you fly for a living, you do not really want to drag your butt on a plane for “fun”.

  • Charles

    Diamond here (going to Platinum tomorrow) and on the way out the door of Delta!

  • thepointsguy

    I believe in a free market and feel that consumer choice is the ultimate protest. These changes may be good for some people (like those who fly short haul and spend a lot), but we won’t be able to tell until Delta actually reveals how the redemption process will change (later in 2014).

  • Sherman

    most people who read this blog are probably not the type of consumers Delta is after.

  • thepointsguy

    If you don’t need/care about miles.. then I can see why you don’t care about these changes.

    However, for the savvy consumer who wants to maximize their spend and value back, these changes are important. Many people do drag their butts on planes for fun to travel the world and explore new places.

  • thepointsguy

    Disagree. We’ve got nearly 800k monthly unique viewers- most of whom make 6 figures and have good jobs.

  • Richard Kahn

    Thank you Brian. In spite of it all you are a real optimist! I am not saying that they are going away soon – but they will continually go in the direction of a scam and away from the real programs of value we once knew. Case and point: Delta.

  • Rick

    Brian: I have a suggestion for a future post. I’ve been Delta’s favorite type of customer — a frequent business traveler, Diamond (earning 150+k miles/year), with a Delta-branded Platinum AmEx. I used to be at a captive Delta hub, but I’m not anymore, and since loyalty has only run one-way I am ready to jump to another airline. Which airline would you suggest, how would you do it, which credit card would get with the new Airline, and what else would you suggest with that airline? Given that I’ve flown only Delta for so long, I don’t know the tricks of the trade for the other airlines.

  • thepointsguy

    Stay tuned!

  • Atlmike

    I wish articles (not yours Brian) about Delta’s change in frequent flyer program would
    stop commenting that it benefits business travelers. What
    they should write is that it benefits business CLASS travelers which
    most business travelers are not. I work for one of the big 4 consulting firms and something you have not mentioned (no other article has either) is that my firm (Deloitte) and all other consulting firms/high travel companies have price agreements with Delta for
    reduced priced fares far better than what most people pay because of the volume of
    travel. Sometimes its half the price of what you could find normally on delta’s website. And we don’t fly business class unless its oversees. On none of my regular trips will i earn more than half what I am making now in miles

  • jkramer

    It sucks when you don’t have much of a choice of airline. Because I’m based out of MKE my choices are not very good. I could try to use UA or AA since they have feeder flights to ORD but they get cancelled all the time. and ORD is a nightmare. The only other option is Southwest and I’m too old and tired to deal with that corral business. Thus, my loyalty has been to delta for quite some time. I am PM from business and personal travel, have a reserve card and used to actually pay for the skyclub (pre-reserve card). But now all this money I shell out seems to be slowly degarding in benefit return. However i have no choice. I am bound to find the cheapest fares for work and when it isn’t on my dime that is my goal as well. yet i would always pay a bit more to make sure I was on a Delta flight. I feel particularly bad for short-haul business commuters who get their status on segments and whose flights are never that expensive. yet they spend every week on a delta plane. That sucks they can’t get some perks for that frequency and loyalty starting 2015. I’m in a quandry about how i can extract myself out of the Delta vortex. I don’t see a way at this time. Thoughts?

  • MissKeek

    There’s a petition you an sign that just went up at Change.org:

    http://www.change.org/petitions/richard-anderson-rescind-2015-delta-skymiles-program-devaluation

  • Brett

    I think you’re joking yourself if you think the new 5 tier chart is going to be anything but very bad for redemption.

  • Ted

    Great writeup!

  • Chris

    “how are consumers better with less benefits?”
    There is certainly an equilibrium in which the airline does not offer complimentary upgrades and prices for first class tickets are much lower than they currently are. I am sure this would benefit a lot of people that prefer paying a moderate amount over playing a lottery.
    By the way, this is what AA is basically doing with its 500-mile-upgrades. They are making people pay for upgrades and give a discount to frequent flyers (you can buy the upgrades, but also get free ones for flying). Most people I know are happier with that system than with the gate madness you currently have with UA and Delta.
    I agree, Delta hasn’t announced any specifics yet, but I cannot imagine that prices for first class transcon tickets will not be going down if people with “medium willingness to pay” don’t have the option of a complimentary upgrade anymore.

  • Darth Chocolate

    OK, so a credit card churner gets “status” and basically buys miles for $1 each (assuming no spend for airfares). Then, he buys cheap fares and gets few miles under the new program. Now, that’s “loyalty”?

    Compare to someone who flies for work and easily meets the MQD threshold and earns miles based upon what he pays for flights.

    I would argue the second guy is far more loyal than the first.

    Now, remind me how this differs from any of the hotel programs that award points based on spend?

  • dsamso

    Brian. I have to agree with you wholeheartedly in your analysis. I have been a Continental and then (unfortunately) United top tier flyer for the past 10 years. In the last 5 I have spent upwards of $10,000 in premium international business class for work. I would pay for my tickets in order to reach status. When traveling for pleasure I would buy more expensive coach to use international upgrades. This year I was ok with Premier 1K because I refused to do a mileage run, I can still get my reward tickets for free with United and switch them as much as I want. My strategy for 2014 has also changed:my wife and I have signed up for credit cards in the last 6 months that have netted us so far 250,000 membership rewards and airline points (aa, usair, lufthansa). My currency is a diversified portfolio of miles and points. If work allows me to qualify for Premier 1K again so be it, but I will not be making any huge efforts to attain this status or reaching million miler. I will get there eventually.
    Why you would fly Delta given the options, unless you are required to or live in a hub, puzzles me. If you fly international routes in business class you can do so much better than Delta or any other US airline for that matter!Their miles have long been devalued, this is not new. Getting tickets for the minimum mileage has been mission impossible for a few years. Now they are making it impossible to even get rewarded if you have to fly at lowest available fare domestically as required by your corporate policy. They are punishing the road warrior. Maybe they know something we don’t!

  • cotoneloc

    Brian, I can see how someone could easily meet the MQD requirements for without satisfying the MQM or MQS, but how can someone fly 75k MQM’s or 100 MQS’s and not spend $7500 MQD’s?

  • amateurflyer

    Agree with TPG. I am in the demographic he mentioned, flown over 300k miles, and I’m 30 years old. I have a good 40 years of traveling left in my life. I’ve always paid the extra buck to fly with Delta.

    I’m not saying I’ll avoid Delta, but I see no reason to fly with the unless they are the cheapest carrier.

  • Benjamin Chiang
  • OLPartners

    Brian,
    What do you think the implications are for the SPG – Delta Crossover Rewards program?

  • AK

    Delta is going the way of United just with nicer flight attendants. Their new products are not impressive aside. I’m very jaded about business travel over the next few years so much so… I’m electing to drive to San Diego from San Francisco today, so I don’t have to deal with going to the airport, waiting, flying, waiting, etc.

  • AK

    Which alliance are you headed to next?

  • Allan Klein

    As an IBMer, these changes are awful so how he can say they’re good for us is mindboggling. We only fly coach and need to buy pretty close to the cheapest fare using an online tool. I calculated what my RDM would be before/after the changes over my last six months of travel and I’d be netting 38% less miles, and that’s as a Diamond Medallion at 11mi/$.

  • Peter

    is there an email address to delta? or perhaps like an online petition or something to let delta know we’re leaving and unhappy with this change?

    i don’t want to use their website comment form, but want to make sure they know that myself and my company are leaving delta

  • John Johnson

    I have written three emails back and forth with delta and got a form letter response about how these are improvements, everyone is doing it, etc. I think if everyone here sent in their complaints perhaps things would change…

  • Bill

    Because someone flies for work they should be considered a more loyal customer than someone who flies for pleasure? Many (not all) of the people flying for work aren’t even paying for their flights [either their companies pay or they are being reimbursed]. When I fly I have to go out of pocket every time, yet I use a certain airline based upon their frequent flier program. I consider that being loyal and I don’t see how someone flying for work can be called more loyal than someone who always uses the same airline for their pleasure flights. Unless Delta is way different than other airlines (possible since I don’t use their program) I don’t see how someone is getting any real status via credit cards. Sure you may get some benefits and some miles etc, but they still come out behind people who actually fly in terms of actual status. Furthermore, Delta makes a ton of money selling their miles to credit card companies for use by consumers, so the airlines do profit from credit card consumers who often end up being more loyal to that airline even if they could get cheaper tickets elsewhere.

  • jkramer

    with carryover MQMs for one. right now i have 45,000 MQMs for 2014 but my MQD is only $2100. Thus, technically I am not even silver medallion yet even though I should be “not gold” by April.

  • jkramer

    i need advice as well! i have so many miles with Delta. Am a PM, have Reserve card and have been exclusively loyal for at least 5 years. I would love to abandon Delta. But MKE does not give me much choice.

  • Dan

    Can one have both the Platinum and Reserve cards at the same time?

  • DavidYoung2

    I bailed on Delta the minute they made me pay for lounge access for my business partner (or wife, depending on where we’re going.) I travel from the West Coast to Boise twice per month, always on Delta through SLC. Been loyal to Delta for over a decade. No longer.

    Since nixing the lounge access, we now fly Southwest connecting through Las Vegas and use the very nice Centurion Lounge. Smart move Delta, cost you 25 trips per year x 2 people x $400/ticket = $20,000 in business travel. That doesn’t count the $6,000 per year in personal travel each year.

    Sadly, Delta went from being my preferred airline to one I actively AVOID. How badly can you screw up a customer relationship?

    Did they forget that although business travel is the most profitable, it’s still the casual / price conscience flyer that pays the day-to-day bills?

  • unsurprised

    Isn’t there a very limited set of consumers who are savvy enough to actually figure out which program would really work better for them as applied to their unique personal circumstances–which that prospective customer may not even be able to predict before they are trying to decide which program to patronize? Particularly as these programs become more and more complicated and riddled with exclusions and exceptions to the exceptions? If that’s the case, isn’t there a huge risk of benefits that are lavished on people who would have made the same flight purchases anyway?

  • Danny

    I’m a business traveler and did 100 flight segments last year, got to
    PM.

    If these changes are benefiting me, I don’t see it. I’m getting trashed by these changes and now actively looking to switch, I have no idea how ‘OMG WE LOVE BUSINESS TRAVELERS’ is part of their rationale. 95% of business travelers fly in coach, only a small portion are C-level executives who buy themselves expensive tickets.

  • Benjamin Chiang
  • Bill Rubin

    I’ve never understood why any frequent/business traveler who doesn’t live in a DL hub city would ever want to fly DL if all you value is the premium class seat quality and service/food, there just isn’t that much of a difference between the US airlines…and internationally UA and AA are far superior in that they often have true First Class, which far exceeds anything on DL. In addition, Star and OneWorld are far better alliances with far better partner options in FIRST or Business class, while DL barely has availability or allows for SkyTeam partners in Business.

    Delta is horrible. Its miles are worthless. It doesn’t have international First as an option on its own metal, and it doesn’t offer availability for First on any of its partners. Its website is the worst. And its hubs are never places I want to visit.

    I suspect Delta’s losses will be United and American gains…and Alaska gains in the West, too.

  • TwoCoasts

    One World- American. As a guest, I hope you are a Delta representative feeling out the public reaction to this. I will gladly give American my money. Delta is quite foolish and will pay in lost revenue and unhappy travelers who are paying money for a company who doesn’t appreciate loyalty.

  • Darth Chocolate

    I cannot count the number of time I have been hosed by UA. Add to that the surly ground crew and the outright lies, I refuse to deal with them, even though I work from a UA hub city.

    AA and US is just not convenient for me.

    I began with NW when I was living/working in China about 8 years ago. I was worried about the DL merger, but they have always treated me well. Even got some operational upgrades to Business Elite on international flights due to Medallion status.
    It will only be a matter of time until UA and AA go to the same business model. These two companies are very good at “me too”. They will hope to profit from a similar program, but keep the same crappy customer service.
    But move if you want, you’ll be back.

  • SB

    Seconding Rick’s ask. I thought I was the customer Delta wanted (Business Traveler, Diamond, non-hub, 150K+MQM, multiple Amex/Delta Platinum cards, MQD estimate of $30K) but my 2015 miles projections are at least a 25% reduction. Tomorrow I’ll take my first United flight in five years, having locked-in DM via rollover MQM for 2015 already. I’m voting with my wallet and just need a roadmap for where to spend the money Delta doesn’t want anymore.

  • Brian Kinnard

    I agree with the vast majority of the posts. I am a business owner who travels first class domestic and business class international on paid first class/business class tickets. I am currently in Asia on business and when I had to call the 800 line because changes on their online system did not work, they have no hesitation to charge the $25 assistance fee and when Delta booked me on a KE flight, there was no mention of (although I knew it) that even my full fare business class ticket would earn ZERO miles on Delta, even though Delta booked them. I am now actively searching for a new airline that actually cares about the business traveler and doesn’t just give it lip service.

  • Michael Leoni

    Delta is obviously not cracking down on credit card sign-up bonuses, or anything to do with credit cards. There is a trend here with the last two major changes to the frequent flyer/medallion program that delta offers. First, with the MQD’s, they allow you to waive these by spending over $25k on their co-branded credit card. Second, with this mileage devaluation, they haven’t changed a thing about the way one earns miles through credit card spend. One will still receive 1 mile per dollar of spend and $2 for airfare, and the amex membership rewards program will still transfer at 1-to-1. Delta obviously sees high profits from these credit cards. Furthermore, I believe Amex purchases around $670 million of frequent flyer miles a year from Delta. If anything, Amex is the highly profitable customer that they are trying to please, and by not devaluing the credit card miles earned but devaluing the miles earned from flying to make award space more available seems to appease American Express and its customers, not so much the common flyer.

    One issue I have with this devaluation is how Delta continually explains it as a way to benefit their most valuable customers. I find this hard to believe, although partly true. I don’t believe it is necessary to reduce the majority of frequent flyers mileage earnings in half in order to give the people who pay for full fare economy tickets a few more miles. I looked up various routes that I commonly fly and overestimated the price that I pay, and every one of them had my trip earning half of the miles as it would in the current program.

    This is clearly a way for Delta become more profitable and is masked under the description as a benefit for the business traveler.

  • Michael Leoni

    EXACTLY! This has absolutely nothing to do with people earning miles through credit cards. I do not understand how this comes to mind for people. This is simply a way for Delta to earn more money. From the perspective of being a shareholder of delta, this could be good. From the perspective of being a medallion member, this makes me want to reconsider my loyalty.

  • Santastico

    UA and AA have true First Class??? You’ve got to be kidding me, right? Delta totally sucks but at least they understand that no US airline can compete with an Asian, Middle Eastern or European airline in terms of first class cabin. Thus, they just do not offer it. AA first class is probably comparable to a business class of SIN and CX. As for UA, they are in the stone age and should be ashamed to offer what they call “first class”

  • Michael Leoni

    exactly, this is hurting the people who fly on planes, not the people who use the co-branded credit cards. This, if anything is another incentive to the people who use the co-branded credit cards, if in fact, Delta actually releases more award seats.

  • Michael Leoni

    Don’t forget, United has also done an outrageous devaluation. United’s is similar to Delta’s, except United has done it on the redemption end, while Delta has done it on the earning side.

  • Darth Chocolate

    How are consumers better off? Really, you must have only a tenuous grasp of economics.

    I have said many times, and will continue to say it: When everybody has status, *NOBODY* has status.

    For example, if you are a SM on DL, how often do you get upgraded? Rarely, I would bet. Slightly better for GM, and still slightly better for PM. Even DM is not a slam dunk.

    Now if you find a way to limit how many people actually can make the higher tiers, by say, I don’t know, adding a MQD spend or something, then there will be fewer Medallions at all levels. THIS is what makes it better for everyone ELSE (i.e., the most profitable customers).

    Next, if you base the amount of miles (or points or whatever) on actual spend, just like EVERY hotel program, you bring some rationality into the program. Again, you reward the most profitable customers on the most profitable tickets by a combination of points based on “status” AND price.

    Now there is all the moaning about the potential for getting screwed by the new, not yet seen, redemption tables. And some of you all looking for the really low redemption level rewards may well get screwed. And here I agree that DL screwed the pooch on this one by not releasing the rules for redemptions as well.

    My guess – and it is only a guess – is that it will be based loosely on the SkyBonus redemption scheme (not the same number of points, but a similar structure). The award charts will probably not match up since SkyBonus is a revenue based program for small businesses and is based on class of fare and flight origination; Medallion level does not come into play.

    If you take a look at the SkyBonus program, you will see there are two redemption levels for a domestic coach ticket (also for business), with the expensive one being about 2.5X the amount of the cheap one. The difference is that the more expensive one covers higher fare classes and the cheap one covers lower fare classes – i.e., it is based on class inventory.

    So if you want more options as to dates, you use the more expensive one, if you are willing to take the chance, then use the cheaper one. There are no blackout dates, and whether you can get a seat is based upon available space in the plane at the fare class you are redeeming.

  • BC

    $450 BusinessElite change fees, no international first class cabin, no mileage accrual on some full Skyteam partner airlines even on First/Business class tickets such as KE, limited domestic first class seat available for purchase, and dismal customer service compared to international carriers. Yeah, sure Delta is catering to the paying business/premium customers. I, as one of these target “customers” am moving on (and was very close to purchasing Delta Private Jets membership). I don’t fly many miles (typically on 50k MQM) but all on paid domestic first class and international business. I am EXACTLY the customer Delta says they want, so if they cannot keep me…

    Brain – what airline/program do you recommend as best for paying domestic FC tickets and with international routes?

  • Richard Kahn

    I believe in a free market too, Problem is that with the allowance of unregulated consolidation after so many mergers it is no longer a free market. Our as consumers are now limited so “voting with our wallets” is almost a bygone expression with near monopolies. This was not the idea of Alfred Kahn years ago when he devised the deregulated airline industry. .His vision was many airlines competing fiercely and the consumer being the winner. But Mr. TPG, guess who won?

  • Bill Rubin

    I’ve now flown domestic First Class on UA, AA, and Delta for a few years–and see very little difference on the various routes I’ve flown. But I’ve also flown UA First, Cathay First, BA First, Asiana First, and Lufthansa First on many international routes (LAX-LHR, LAX-ICN, LAX-HKG, SFO-FRA, SFO-LHR, etc.) as well as Business on United, American, Delta, Virgin Atlantic Upper, Aeroflot, Lufthansa Air France, British, Swiss, Asiana, Singapore, etc. I care far more about the hard product (can I sleep comfortably and have a solid entertainment experience) than service/food when I fly long-haul. United is absolutely fine in comparison to the best in hard product in First, adequate and competitive in Business (with ALL lay-flat seats unlike some others, including Lufthansa, Air France, and even Delta), so I never understand the big hoop-lah about United compared to the others. Yes, Cathy and Singapore are better in First (and Singapore is best in Business)…but I’d take UnitedGlobalFirst over Virgin Upper or Delta BusinessFirst or Air France Premiere any day. I suspect I have more comparison ability over most, but that also means I know what’s out there more than most, too…

  • Bill Rubin

    For the record, I also fly internationally (First ALWAYS unless 2 class of service only available) for pleasure using miles ONLY. I find Star and OneWorld to be most advantageous and having the best availability for routes/quality First Class. I don’t care which one costs more or fewer points because I have tons of points usable for every alliance/carrier between Chase Ultimate Rewards, Alaska, SPG, and Amex Membership Rewards. I just want the best routes with the best possible hard product so I can sleep comfortably, eat decently, have some decent entertainment on board, and get where I want to go the easiest. Sorry, but Delta’s block on First for all partners is a killer for me. Delta’s lack of true First is a killer for me. Delta’s general unavailability of decent award tickets on their own metal and partners are a killer for me. United may have devalued their awards, but now it’s FAR easier to find awards I like. American has great awards but not great availability, but between AA and BA I’ve been able to fly LAN (LAX-LIM), Cathay (LAX-HGK), Qantas all in First. With Air France (through Amex) I’ve flown Air France Biz and Aeroflot Biz on nonstops LAX-CDG and LAX-SVO but only because they were nonstop routes to where I wanted to go. With Delta, I couldn’t even find those routes/awards! With United, I’ve flown in the past 2 years LAX-LHR, SFO-PEK, SVG-LAX, LHR-LAX, SFO-CDG, SFO-FRA, all in First with ease, mostly at the old saver level. I’ve also flown Asiana First (LAX-ICN-YGN), ANA First (LAX-NRT), Lufthansa First (LAX-FRA, FRA-JNB), and Air New Zealand (LAX-AKL, though couldn’t find that recently). The difference between United/American and Delta is HUGE. Delta, in my opinion, is horrible. If it works for you for your own specific reasons, great. But I’d tell others not living next to a DL hub to consider UA or AA if you like having lots of options in First on partners and your own carrier for longhaul flights using awards.

  • Joey

    Jennifer, I agree on most of those points. Only one that burns me greatly is the one that’s NOT award- or upgrade-oriented.

    I almost always am on a paid ticket, buy discounted first class maybe 50% of the time, and otherwise am usually on at least a mid-level fare class if in coach (because of timing).

    Flexibility is what I care about the most, and Delta’s change to the same-day confirmed rule (killing any reasonable expectation of being treated with flexibility), plus the increase in change fees to $200+ (up to almost $500 on international tickets) has really burned me. If I’m spending $2k+ to fly domestic, you’re really not gonna cut me some slack if I want to change my ticket around a little?

  • Liz

    Can you suggest the best way to contact Delta and tell them how unhappy we are? I’m a 10+ year Platinum and planning to change my loyalty soon, but I’d like to give Delta one last chance.

  • Darth Chocolate

    Wah, Wah. I have gladly paid the $450 change fee – when the price of a “no penalty” ticket was $2,500 more. You can change a lot for that differential.

  • Jennifer

    I agree with you that the same day flexibility loss is a big downer. It was nice to have the ability to change a flight at the last minute when your meeting ends early, so you can get back home earlier than expected. I’ve been fortunate thus far to have still been able to make changes without any issues, but I’m sure when the day arises that I can’t, I’ll be rather irritated. Regardless of Delta’s changes, they still suck way less than United. I’ve had such terrible experiences with United that I only fly them when no other options exist. And, no, I don’t work for Delta…I’m just an overall satisfied customer of theirs.

  • http://redmonk.com/dberkholz Donnie Berkholz

    As a rational entity, Delta clearly should want to reward people who make the airline profit, not merely revenue. This change makes it more clear that it’s looking at this via premium/last-minute fares or fees from huge credit-card spends ($170K/yr to get the 80K MQMs for platinum) rather than a bottom-up approach of small profits across a large base of potential gained “cheap ticket” customers who come to it because of its differentiating FF program. Presumably this is because Delta hasn’t had enough evidence that the latter approach pays off.

  • Peter

    So, who should I switch to if I live in Atlanta?

  • T. Carroll

    I just received my American Express bill and was saddened to see that Delta is going to “limit the total number of Membership Rewards points that can be transferred out of any Membership Rewards account into one OR MORE Delta SkyMiles accounts and will be limited to 250,000 points per calendar year, and the total number of Membership Rewards points that can be transferred into any individual Delta SkyMiles account will be limited to 250,000 points per calendar year.” My husband is a platinum flyer with Delta and this will hurt us more than any other change. The cost of flights using miles has become astronomical and we quite often need to use the Membership Rewards points. I guess we’ll stop using American Express and go back to paying cash for everything because there is no longer any benefit or we’ll just fly JetBlue when possible.

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