This will surely not be my last post on the topic of the massive changes announced today by Delta SkyMiles. You can read my summary and initial take on the changes here. After having a little time during lunch to think about things, and read some of the hubbub on Twitter and other social media outlets, I thought I’d add to my initial post.
In my opinion, nothing that was announced today matters to the majority of flyers at the moment. I’d love to know the real math behind this, but I’d be willing to be that the percentage of Delta’s customers who really, really care about this is not more than 10 percent. But that’s beside my point. My real point in saying that this doesn’t matter yet is because we do not know what the redemption situation is going to look like come January 1, 2015. Now, Delta’s strict interpretation of the meaning of fare pricing being a reason why they aren’t telling the redemption side of the story now could warrant its own book. That said, there are too many unknowns for me to lose my mind over these changes.
Going forward, I would look for some migration of current Delta elites to other airlines. A change like this will prove to be a big burden for many. However, I think that is a behavior that Delta may be looking to drive with these changes. I would also caution those who wave goodbye to Delta and status match elsewhere to ask themselves a question – what will I do if my new airline changes to the same or similar revenue-based system?
While there is always a chance that the rest of the industry leaves Delta hanging, I don’t think it’s likely. The day may be coming when many people that hold elite status through innovative mileage running strategies need to ask themselves if it’s worth the bother? There are other ways to keep costs and travel comfort in check, and let’s face it, there are a lot of ways to earn miles that probably aren’t going away whether the industry moves to follow Delta or not.
Whatever happens, the fourth quarter of this year may be one for the history books. I’ll have the popcorn popped.
-MJ, February 26, 2014
A lot of those who buy the cheap tickets are discretionary flyers. I think the disrespect that delta shows us will cause many of the discretionary flyers to not fly or not fly delta if others don’t adopt this change. It is the rich getting richer at the expense of the ordinary traveler. These days, many accept this as the natural order of things. Pitiful.
@Jeffsetter,
Like I said…popcorn popped. This may be cute. Lot’s of “what ifs” right now. Knowing what I know about airlines, I strongly suspect Delta knows or at least thinks it knows what the number is. Based on that, they’ve taken a calculated risk…… we’ll see what happens.
I think that it has to be higher than 10% just because of how most people react to “losing” something. It seems like 96% of flyers are in a position where they are losing something (all but the 4% of Delta flyers that make them 25% of their revenue), so the percentage has to be higher just by that nature. In my local newspaper they are already spinning this change as negative – so if the media is spinning that story it has to be higher than 10%.
All well and good for some people but if you rely on spending with co-branded cards this sucks if you do not live in the USA as there are less options for us to earn miles that way and therefore making status in the future very very difficult.
10% of 60+ million members is 6 million regular customers, most of whom will be pissed off by this change and if not in captive markets or working for companies with DL corporate accounts, will be ripe for the picking by AA/US and UA. Even just a 1% migration (600K Silver/Gold elites) would represent enough pissed off elites who spend at least $3K a year with DL to earn status, losing DL $1.8 billion a year, a not insignificant loss to the carrier, but nice incremental supplement to the bottom lines of AA/US and UA.
Going to surely be integrating to see how it all unfolds, isn’t it? That said, color me surprised if this costs Delta $1.8 bills.
Setting CC aside, this change is only good for a small subset of customers:
1. Those who flies on overpriced short hop trips
2. Those who flies full fare tickets
Everybody else is screwed basically. Try doing the math for JFK-SIN via NRT on a $3K fare, or how about JFK-SFO on a $1K fare.
5-tier award structure, we know what that really means no matter how much they try to spin it.
It looks like they are discontinuing the bonus for buying full price or first class tickets which to me doesn’t make sense. I’m currently in Hawaii on a purchased first class ticket. When I used the calculator the Delta page it said I’d get half the miles in 2015 that I’m getting today. O way I would have done FC for that. But on short hauls it looks like I’ll make a little more. Having a hard time digesting this change.
There is a lot to digest in these changes.