I’ve been thinking about this since Delta first announced its transition to a new revenue based program last week. I really can’t fit all the words describing this post inside the space of a reasonable title. With that, let me try a full description – My Last Word on SkyMiles Until We See the New Award Chart and Three Reasons Why I Am Staying For Now Other Than I Live in Atlanta.” There, how’s that?
Let’s start with a few facts. First, SkyMiles is evolving and I don’t think there is a single thing all the noise in the world can do about it. Like it or not, Delta Air Lines has a different vision for their loyalty program. Many do not agree with that vision. Who is correct remains to be determined, but I do not think that any of the airline programs are immune from change in the long term. I’ve said this before, but the real contribution to the bottom line of an individual customer is going to figure heavily going forward, and a “mile” is no longer the measure of value it once was. I am under no illusion that I am all that valuable to Delta. That said, I’m a Platinum Medallion who spends more and costs less than other Platinum Medallions, and no doubt some Diamond Medallion members. Tell me I’m just doing things wrong if you want.
Second, whether I think Delta is right to consider spend as the primary (but not the only) factor in value or not (and for the record, I do think they are at least partially right), they haven’t done the best job of rolling out a change in the world of airline loyalty that is so different than things have been for so long. Introducing change so drastic without the complete picture, the award chart, was the wrong decision. I actually asked a Delta spokesperson about this, and the response was that “we’re looking at this feedback now.” Perhaps the yelling has been loud enough. We will see. Finally, Delta did not just make up something this huge overnight or on its own. Rumors and innuendo have been rolling around for years about concerns with ballooning amounts of outstanding miles, and I assure you that this is not just a Delta issue. I have no idea if the industry has been “over rewarding.” I’m pretty sure the balance of miles outstanding has grown beyond an ideal level, but that’s not entirely our fault, is it?
In the end, a lot of the drama surrounding this change will turn out to be nothing more than noise even if it could have been managed better. That’s not to say that I do not think Delta will lose any customers over this. I certainly think they will, and they will not all be “low value.” I just don’t know if the customers they lose will be missed all that much within a restructured Delta, and more importantly, a restructured industry. It is easy to say that this is just the result of too many mergers and a lack of competition. Surely, competition has been reduced in the airline industry, but has it been reduced that much? Right here in Atlanta, I can fly at least four carriers, and sometimes more to just about anywhere I want to go. Is that enough? I think so, even if I could once choose from 10. Given that I really do like my miles and elite status, all things being equal, I don’t look at making a connection as a deal breaker.
I can think of no other industry where so much wealth has been transferred from the pockets of shareholders, the companies they own, and the people they employ into the pockets of consumers than that of the U.S. airline industry in the last 30 years or so, especially since 9/11/01. What is happening now is merely one piece of the end game of a great balancing act, and if the pendulum ultimately swings too far I have a bit of faith that the market will correct things over time.
Now that you are good and exercised, I’ll share three reasons why I will continue to fly Delta. While a loyalty program can no doubt be leveraged to purchase customers, I have to wonder if the underlying service a company provides shouldn’t matter more?
# 1 – A reliable airline matters.
# 2 – I continue to be pleased with the level of care I receive as a SkyMiles Medallion.
# 3 – I’ve never walked off a Delta flight and said “wow, I can’t wait to fly someone else.”
In closing, do not call me a Delta “apologist” even if you want to. They absolutely can do enough to send me away. I’m just waiting for the mileage program end game to play out. In the end, I’ll do what’s best for me. As I’ve always said, that’s what you should do too.
-MJ, March 5, 2014
Very well argued.
In my case, I am hoping the changes will be for the better. I only take 2 or 3 long flights a year so am by no means a frequent flier, nor do I do mileage runs. I have a Delta Amex Plat card and pay for everything with it just to rack up miles. I only use the miles for biz class upgrades. I am hopeful the new scheme will allow for more upgrade seats to become available. The only change I am making is using my SPG card now so that I will have the option of transferring miles to a carrier other than Delta if needed.
Great points and spot on. I’m flying expensive late booking (less than two weeks out) fares for business travel out of Atlanta every week and this new chart is going to nicely pad my miles account. I’m glad Delta is recognizing that the people they should be rewarding are the people who are making the company most profitable.
This model makes great sense and the bottom line is there aren’t that many carriers to defect to. All of these people bloviating that they are jumping ship to AA or United are welcome to do it, but likely the reason they chose Delta to begin with was the experience and the routing options.
At the end of the day most business travelers who fly on cheaper fares are truly value status won’t go out of their way to make their travels twice as long simply to get a higher status. I will be surprised if Delta really sees any decline in customers and if their profits don’t continue to keep rising.
I think your blog post can be summarized as, “I live in Atlanta and Delta is a reliable airline.”
And I’d even go farther to say that Delta is running the best airline operation in the Americas currently.
When you live in Atlanta, and you travel for business, you should fly Delta. I don’t think anyone would argue with that (at least too vociferously).
But my goal was to try and leave ATL out of the equation. 🙂
MJ, good stuff as usual.
I agree that ss an ATL resident your choices are severely limited. However, as you said, DAL seems to me to be a superior full-service airline experience.
I could list why but most ff’ers already know why.
I am semi-captive to DAL also but virtually everytime I use them it is a better experience at the margin than US and especially UA(simply awful).
And on a related point to make up for the cost differential we grabbed some DAL stock about 8 months ago:) I’d rather be lucky than good.
The market loves them, at least for now.
Great post, I think you hit the nail on the head. Until we see the award chart, there is only speculation.
I think we have to keep in mind that the reason we fly is not to primarily accrue airline miles. As a fellow Atlantan, I am happy to fly Delta for two reasons: 1) I can catch a direct flight pretty much anywhere, and 2) They are an outstanding airline when looking at their core services. Delta has great planes, and excellent service. For me at least, they have been highly reliable and provided a higher level or service than any other airline out of ATL. Sure, I could accrue more miles elsewhere, but that would be at the expense of both items above.
have you done the math to figure out how many fewer (or more) miles you’ll earn in the new system ?
if your earning will reduce by more than 30%, your recommendation to stay with the airline sounds neither convincing nor sincere unless you can showcase how DL+Skyteam is superior to its competition, enough for us to overlook deficiencies at the RDM side of things. “most profitable” would not be a justification since that doesn’t help the consumer.
I have done the math, and in my situation, I am a bit better off. However, please note that I did not recommend anyone do anything in this post. I simply shared some of the logic in my decision. I closed the post with the same thought I’ve shared in this space before – you have to do what is good for you. For now, I’m staying put. For others, that may not be best.
As always, thanks for the well thought out post.