Last night I shared the details that Delta’s SkyMiles program is going revenue based as of 2015. Yes, even more revenue based than it already became this year.
This morning Delta released all the details of the new revenue based SkyMiles program. Well, at least all of the details they plan on sharing for now.
Miles for Delta flights will be earned based on ticket price instead of distance flown. This will make Delta the first U.S. global carrier to transition its frequent flyer program to a mileage-earning model based on the price of a ticket. You’ll earn 5 to 11 miles per dollar spent on base fare and carrier-imposed surcharges depending on your SkyMiles status.
• General SkyMiles members – earn 5 miles per dollar spent
• Silver Medallion members – earn 7 miles per dollar spent
• Gold Medallion members – earn 8 miles per dollar spent
• Platinum Medallion members – earn 9 miles per dollar spent
• Diamond Medallion members – earn 11 miles per dollar spent
• Delta SkyMiles Credit Card members – will continue to earn up to an additional 2 miles per dollar on Delta purchases with the Card
As I wrote last night, with Delta’s revenue requirement that’s in place right now they’re basically requiring you to spend an average of ten cents per mile.
So as a non-elite member you’ll apparently be earning five miles per dollar, which is 20 cents per mile. That cuts earnings rates in half.
As a Diamond Medallion you earn a 125% mileage bonus, meaning at an average of ten cents per flown mile you’re earning 22.5 miles per dollar spent, compared to the new maximum of 11 miles per dollar spent. Again, earnings rates are almost being cut in half. On top of that taxes don’t qualify towards the total, as you’d expect:
†Ticket price used to calculate miles earned includes base fare and carrier-imposed surcharges, and excludes government-imposed taxes and fees. Tickets purchased in a foreign currency will be converted to USD at time of ticketing based on the IATA 5-day rate.
On the plus side, they’ve “listened to our feedback:”
We’ve listened to your feedback – you want it to be easier to redeem miles you’ve worked hard to earn, so we’re making Award Travel more flexible and giving you more redemption options.
Maybe it’s just me, I don’t really need SkyMiles to be easier to redeem. I mean, yes, it would be nice if they fixed their website, but they’re already easy to redeem… assuming you’re willing to do so at the “high” award level. And I really don’t think we wanted “more redemption options,” but rather just better redemption options.
More Award Seat Availability – We’re increasing Award availability at the lowest price levels and making it easier for you to find the seats that are most sought after. We’re also increasing the number of redemption levels overall to as many as five levels, giving you additional options requiring fewer miles.
I’ll believe them increasing award availability at the lowest price when I see it. The same goes for five levels of award availability, and that somehow giving us “additional options requiring fewer miles.”
One-Way Award Options – Starting in 2015, you’ll be able to choose Award options for a one-way ticket at half the price of a round-trip ticket.
So that’s good news at least.
Miles + Cash – You will be able to pay for a flight using a combination of miles and dollars. For example, a member may be offered the option to purchase an Award Ticket for 35,000 miles or a Miles + Cash Award Ticket for 25,000 miles + $159.
Unless those tickets are eligible for mileage accrual, paying 1.6 cents in place of redeeming SkyMiles doesn’t seem like much of a deal to me.
New Award calendar – We will launch an all-new Award calendar with expanded search capabilities and make sure it shows the lowest price for dates you select.
YAY! Okay, this is actually exciting. Isn’t it kind of sad that saying “hey, a feature on our website will actually work the way it’s intended” is a selling point of a massive devaluation?
The way members qualify for Medallion status is not changing. The redeemable miles earned toward Award Travel differ from Medallion Qualification Miles (MQMs) which are used to calculate Medallion status and will continue to be based on distance flown.
So it is worth noting that the new revenue based mileage accrual system only applies to redeemable miles and not Medallion Qualifying Miles, which will continue to be earned based on distance flown.
The winners and losers of the Delta SkyMiles changes
Reader Paul left the following comment on last night’s post (clearly he doesn’t have an axe to grind or anything):
Horrible news? Au contraire – at least not for those who generate profits for Delta (they get rewarded for their busine$$).
Travel hackers are not so subtly being invited to go elsewhere – or sit in the back. No more caviar for 20-Somethings who can barely afford a decent pair of shoes…
Long overdue development.
And ironically enough my conclusion is exactly the opposite. Mileage running hasn’t made sense in 99% of cases for the longest time now. Who’s being hurt with these changes? The average business traveler that’s spending ten cents per mile to fly Delta (that’s like paying $500 for a roundtrip transcon). The “breakeven point” here is at around 20 cents per mile, meaning you were paying more than $1,000 roundtrip for a transcon then you’ll come out ahead under the new system.
I don’t think the average “profitable” Delta customer is spending an average of 20 cents per mile, though I could be wrong.
What’s funny is that if Delta is to be trusted here, then those earning miles through non-flying means will come out ahead! After all, earnings rates through credit cards don’t seem to be changing, and apparently Delta will be “increasing award availability at the lowest price levels” and introducing one-way awards at half the cost of a roundtrip. And apparently increasing the number of redemption levels overall to as many as five levels gives us “additional options requiring fewer miles.”
So those earning miles through non-flying means theoretically come out ahead here. And that’s the part that really puzzles me about the “evolution” of the airline loyalty program industry…