Why Delta’s 2015 SkyMiles Changes Aren’t Bad For Everyone

My friend Rene at Delta Points is a bit of a Delta fanboy. It’s kind of amusing at times. Naturally I checked my calendar to make sure it wasn’t April 1 when I saw his headline yesterday — “99 Days till #DOS ÔÇô Why #Skymiles2015 will be horrid for EVERYONE! (even Delta)”

He takes January 1, 2015 seriously… he even has a countdown clock! While I’ll likely spend New Year’s Eve watching the ball drop on TV, Rene will be in a bathtub eating ice cream (which, on second thought, sounds more fun than watching the ball drop on TV).

Delta-2015

Anyway, Rene’s post is actually quite interesting, so I’d give it a read.

In part it’s interesting because I largely disagree. Rene says the 2015 SkyMiles changes are bad for EVERYONE… even Delta! I disagree, because I don’t think the changes are bad for Delta, and I don’t think they’re bad for me (though I certainly think they’re bad for most Delta frequent flyers).

Delta’s 2015 SkyMiles changes

In February, Delta unveiled the revenue based frequent flyer program they’ll be launching next year. Instead of earning miles based on miles flown, you’ll earn them based on ticket cost. They’re making some other changes to their program as well, like adding more award tiers, allowing one-way awards for half the cost of a roundtrip, etc. They even unveiled their new SkyMiles award chart, and it doesn’t look half bad.

Delta-SkyMiles-2015

Of course I hate these changes… in theory

I love miles & points, and for years I did mileage runs. So of course I hate the changes that Delta is ultimately championing in the industry — revenue requirements and awarding miles based on ticket cost doesn’t bode well for those us that enjoy outsmarting the system.

Delta runs a solid operation… and that’s why people fly them

As much as I enjoy throwing shade at Delta, I’m also a realist. The fact is that Delta runs a really solid operation. They’re truly the airline of the business traveler — they have amazing operational reliability, a huge route network, more planes with wifi than any other airline, etc.

And I think Delta’s success also explains United’s failure. Delta has made change after change to their frequent flyer program. Why? Because they can. Because they know people will fly them because of the airline they run, and not because of the frequent flyer program the run.

This also explains United’s woes the past few years. They see the changes Delta makes, think “oh, if we replicate them we’ll do as well as they do.” The problem is that they’re trying to replicate their frequent flyer program, and not what makes them so great, what allows them to get away with their not-so-great frequent flyer program. If United spent as much time focused on operational reliability as they do focused on copying Delta’s frequent flyer program, they might actually be doing well.

Delta’s 2015 frequent flyer program is good for me

So to slightly counter Rene’s point of Delta’s 2015 frequent flyer program being bad for EVERYONE… I’d argue it’s actually good for me.

What do I like about Delta SkyMiles? Ultimately the ability to redeem miles for premium cabin travel on their partner airlines. I like Virgin Australia, Virgin Atlantic, Alitalia, Air France, KLM, Air Tahiti Nui, etc. And unless I’m missing something, those opportunities will be improving:

  • Delta SkyMiles will begin allowing one-way awards for half the cost of a roundtrip as of January 1, 2015
  • We’ve seen the new award chart, and it’s not half bad
  • Fewer miles will be issued through actually flying, so theoretically there will be less competition for those award seats, as fewer miles will be in circulation

So for me it’s a win… no?

Bottom Line

Frequent flyer programs are cyclical. When the economy is doing poorly, they’re a great way to get people on planes, and a great way to generate additional revenue through partnerships. When the economy is doing well, they’re a great way to generate further revenue through partnerships, and also a great way to encourage even more profitable behavior.

As someone that’s passionate about this hobby I of course hate to see the direction that Delta is leading the industry in, but at the same time I can’t really blame them.

And in this particular instance, I certainly don’t see the changes as being bad for everyone — as someone that accrues Delta SkyMiles almost exclusively through credit cards, I only see positive changes with the new program. And I’m guessing the number of people accruing SkyMiles primarily through credit cards makes up a pretty large part of this community

How about you? Are the 2015 SkyMiles changes good or bad for you?

Comments

  1. Good post – I have wondered how Delta has done so well in recent years given the weakness of their mile redemption opportunities (vs Star Alliance) and the fact that they’re often not the cheapest option and have a particularly hard to reach top tier but the operational reliability tied to business travel as well makes sense. And also explains why United is still struggling. I’d be curious to see what the difference in hub choice has on operations (i.e. does United have a disadvantage by operating at airports like ORD, EWR, SFO that are plagued with delays) but at the end of the day that’s what they have to deal with.
    Similarly United seems to be on the one hand wanting to thin out elite ranks by mirroring Delta’s strategy with the loyalty program, and yet is filling their planes with lots of cheap fares as far as I can tell anecdotally based on tickets I buy for leisure. United is always as cheap if not (usually) cheaper than Southwest. Great for me, I’d imagine less great for their yields.

    Either way I’m mostly stuck with United – living in Chicago it’s that or American but now that I’m moving to San Francisco it’s the major carrier… Here’s to hoping they try to forge their own path at some point by actually improving their operations and developing a strategy that doesn’t entail just copying others.

  2. You know, it’s so funny. You and Gary consistently hate on Delta and laugh at Delta flyers like we’re unsophisticated rubes who don’t know how to game the system… yet you both *readily* admit Delta runs the best domestic operations, period.

    The hard product rocks — Wifi’s all but guaranteed, and the IFE is terrific. Customer service is generally great, as are the flight attendants.

    And for domestic flying, they’re the only airline that regularly flies widebodies on purpose. Sure, you can get a flat-bed from JFK-LAX or SFO… but you can also get a flat bed a couple times a day from ATL-LAX, DTW-LAX, LAX-HNL, and as I just discovered, randomly, from MCO-ATL.

    For me, that’s a HUGE plus. Delta may not let you score a complimentary upgrade on the JFK routes, but you’ve got a better shot at flying a much better product otherwise than any other competitor. Delta was also one of the first airlines to really sell domestic first seats and not-too-high a premium over economy, and outside of JetBlue has the cheapest LAX-JFK base bares for business class — so you may not be able to score an upgrade, but you can simply buy a fare out of pocket (which is unattainable on UA and AA).

    Plus, getting elite status is ridiculously easy. It may not be worth as much as elite status on American… but it’s still elite status.

    So your only complaints about Delta, @Lucky, is that SkyMiles are hard to redeem. Well, looks like that’s changing, too. And as for earning miles– earning is still easy and straightforward on credit card spend and partner airlines. But seriously: your Delta hate, and there’s PLENTY of it, is limited to the value of what you call SkyPesos. In every other category, Delta beats United and American hands down, assuming you haven’t got your heart set on international First on a domestic carrier (which, LOL… if you’ve got your heart set on international First, why would you waste that on UA’s or AA’s product when the international carriers do it 10x better?).

    I dunno – I know you and Gary run a cult of American Airlines here, but for those of us who primarily fly domestic, Delta is the best thing going (not counting the boutiques like Virgin America).

    I’m looking forward to the changes so long as they’re relatively static. One-way award redemption will be a huge plus, and most of my Delta miles are earned through spend anyway.

    Just saying, as much as Rene may be a Delta “fanboy,” you are a Delta hater for no real reason!

  3. Changes are modestly good for a non-Delta flyer… *if* Delta gives its members access to the full complement of award seats that those airlines offer to their partners.

  4. does anyone seriously believe that with 5 tiers there will be any tier 1 availability at all?
    dream on folks.

  5. @ Lantean — Partner awards have always been bookable exclusively at the “saver” level. I don’t see any reason that would change, as much as Delta would like for it to.

  6. @ Nick — As you say, I’ve always readily admitted Delta is a great airline. They just run a horrible frequent flyer program, in my opinion. They’ve been horrible for international upgrades, have the most poorly trained award agents (which wouldn’t be so bad if their website displayed all partners), an intentionally broken award calendar, no first class redemptions, etc. So that doesn’t fundamentally changed. But Delta also pretty readily admits their program sucks, if you read between the lines.

    So I think we’re on the same page here. ­čśÇ

  7. @Lucky

    i understand that… but if you want to fly VOz you have to get to LAX somehow in first place… so most likely you’ll have to buy a separate revenue ticket and leave enough connection time in case things go wrong.
    MAJOR HASSLE

  8. @ Lantean — Right, but that’s the same whether there are three tiers or five tiers — there’s no space at the first tier either way.

  9. I am a Delta frequent flyer since I live in a Delta hub. However, I only fly them on short haul flights since adding a connection does not make any sense to me. However, I avoid Delta when I fly internationally since their business class is shameful when compared to airlines like Emirates, Singapore, Cathay, BA, Air France, Lufthansa, etc… but they still charge you almost $10K to fly on what they call “business elite”. Thus, my loyalty with Delta stops when I have to fly outside the US.

  10. Personally, I’m fine with the changes. I am a PM who flies mostly DCA-ATL on a weekly basis. (With other flights thrown in here or there). As it currently stands, my DCA-ATL earns 547 base miles, plus the 100% bonus. So 1096 each way, or 2192 total. As a PM using my Delta AMEX, I get a 13X multiplier for my flights, which are rarely below $300. So a $300 flight is now getting me 3900 miles on the same flight that was getting me only 2192.

    Additionally, this is also good for FOs, of which i was for a long time. As a FO on this route, I’d get 547 times a 25% bonus, for a total of 683 each way. Now, I’d get a 9X multiplier, which would be at least 2700 miles for the round trip. So, for the person in my position, this change will only help.

    Who it hurts is the person flying transcon on cheap tickets, that person is getting screwed pretty bad. My 4-6 times a year DCA-XXX-LAS trips will stay even or go down in RDM, but i can live with that based on the new math for DCA-ATL-DCA.

  11. I think you might be a little too optimistic, but then again you know more than said blogger about HIS airline. Rolleyes….

  12. We live in interesting times when you can say an airline “isn’t doing well” and it made a $1 billion dollars in profit in 2013. Sure, Q1 was bad for United, but Q2 they made another $1 billion in profit, and all forecasts suggest thatQ3 and Q4 will be solid. Not only that, but they have reported better operational results the past few months as well. Were they bad and did they have a ton of issues? Sure. But it still looks like people spend too much time focusing on the bad of two years ago rather than the (improving) reality of today when talking about UA

  13. @JCH I live and die by UA [legacy/real UA] but their 2nd Q results were borderline Enron accounting…So that 1 Bil profit, yeah, lets see what all pops up in the next 2 quarterly filings…We are a few days away from the 4 year anniversary of their merger w/ CO and as far as the Exec offices are concerned, it is still UA and CO, w/ them believing that the CO way is the only way…There-in lies the root of the problem…While UA was not perfect in any way shape or form, it WAS the “business-man’s” airline…And based on that and their cash on hand at the time of the merger, clearly they were doing something right…And as a previous commenter already said, they now frequently come up as the cheapest option when searching strictly by $…Unfortunately for us loyal UA flyers, “cheapest” has become the adjective of choice for what the “Team from Texas” has turned this airline into…

  14. You’re playing Devil’s Advocate again. I wonder if someone will get upset or reply with his own post…

  15. I’m born and raised in Atlanta and have been flying Delta since birth almost (well, my mom was a flight attendant for Eastern until they went under, so I technically flew them for the first few years of my life). I’m hub trapped and Delta seems to know it. I don’t particularly like them as an airline, but they employ A LOT of people who I know personally, so I’m personally obligated not to hate them.

    The 2015 changes aren’t terrible to me. I earn most of my miles on Delta metal, and for me, my mileage earnings won’t change that much. I am counting down until January 2015, but not because I’m dreading it…I’m counting down because I get to book my first premium cabin trans-pac award ticket on Virgin Australia using my SkyMiles for a one way ticket! I have enough miles for a one way ticket but not enough for r/t,

  16. Deltas and UAs new rewards programs benefits people who are high spenders with top status who are already loyal. eg: GS. Typical high spenders aren’t going to fly any more revenue flights or be more loyal so I honestly don’t believe either company is going to financially benefit from becoming rewards based.

    I should be UA 1k next year and I’ll loose out (rewards miles generated from flights), but I can generate both pqm and rewards miles fairly easily anyway so only a minor peeve for me.

    IMO a revenue based program doesn’t give any incentive the ‘not so savy’ passengers who don’t want to pay very high fares, which are the vast majority of people.
    With loyalty within the US becoming a less attractive option for most people, I think a lot more people will just look for the cheapest fare from A to B, which opens the door for the Ryan Air business model which no sane passenger wants.

  17. I am based out of the LAX airports and typically fly United. I have never heard anything great about Delta or their program but that is usually biased due to most frequent flyers I know are based on the West Coast as well. While I find @Nick’s comments completely biased and seem almost wanting to pick a fight with @Lucky, I am curious to hear from others based on the West Coast if you find Delta a worthy competitor on any level to United. I have 2M miles with United so I don’t have to worry about status with them anymore and am always wondering what might be better. I fly about 125k miles a year, mostly domestic.

    I would love to hear from others on their views.

  18. Lucky you are so correct with this post.

    I agree. Delta has a terrible frequent flyer program, yet it does have a good domestic product. Their international business class is not too bad either.

    But its hard to defend their loyalty program in my opinion. For me, I will probably always be a Delta nothing as far as status, yet I will probably only fly in Delta first or business as their fares up front have often been only slightly more then coach for the routes and times I have flown them. Also for some strange reason, I have actually found Delta flights that had low level availability to Europe – (and my go to points redemption airline American did not have saver availability to Europe)

    So I always wondered why Delta was still successful and this post makes some great points as to why.

    I agree. Thanks

  19. I’m not one of the business travelers, just a traveler who likes flying with Delta because of cheap flights between Europe and US.
    And definitely not flying a lot but usually taking advantage of miles. So guess what? It’s a disaster for me… I did fly from Italy to Honolulu (2stops) in Dec 2014, earned about 8700 miles…. I did the same route flying back in January 2015… Only 3500miles!
    I guess I won’t have a free flight even between European destinantions anymore… byebye!

  20. I had a “wait and see” attitude towards Delta’s changes. I am a Patinum Medallion flyer with Delta and spend between $50k-100K on airfare every year.

    1. Delta’s mileage chart is a joke. There aren’t any tickets available for the miles on their chart.
    2. There “2015 SkyMiles Program” website claims that there are “more seats for fewer miles”….how stupid do they think we are? Last year I could routinely find RT tickets from DTW to GSO or ECP for 20-25k miles. Not anymore. Now the best I can find are 37.5k miles. Basically on 1 Jan the miles I had earned were devaluated by 50%.

    I’m switching to American.

  21. Delta is awful for transatlantic flights. The SkyTeam is a joke and they hand off flights to Air France, Virgin Atlantic and others who could care less about your diamond status with Delta. They will not give complimentary upgrades even if business class has 13 empty seats (as it did on my flight to Paris this week). I’ve been living in EU the last 3 years just recently returned to the States. Delta seems to be pretty good to their business travelers domestically; but internationally – if your company won’t pay for business class – tough luck. OR you can use 50,000 miles to upgrade IF you bought an upgradable ticket which sometimes costs MORE than a business class ticket.

    On the other hand – their flight attendants on the international flights are first rate…

Leave a Reply

Your email address will not be published. Required fields are marked *