From the desk of the Devil’s Advocate…
Yesterday there was an exchange of posts between René of Delta Points and our old friend (P)lucky over at One Mile at a Time. Check them out here and here if you didn’t catch them before.
What were they arguing about? Delta SkyMiles, of course.
Specifically, they were discussing the major changes planned for SkyMiles in 2015. René thinks the new program will be terrible for everyone, including Delta. Lucky says it’ll only be terrible for some people.
Of course, I’m the Devil’s Advocate. So you can already guess what I’m going to say….
I think the changes are great.
I mean, really great. Truly great. Like Wendy’s-bringing-back-pretzel-bun-burgers great.
OK, maybe I’m exaggerating a wee bit, cause those pretzel burgers are possibly the greatest invention since… ummmm, well, since pretzels and burgers. But I honestly do not believe the sky is falling when it comes to SkyMiles. In fact, I think most people — especially those of us in the miles and points community — will end up doing just as well or better with the changes.
(There’s one major exception, which happens to be the reason for René’s tremendous unhappiness. We’ll get to that in a minute…)
But first, let me explain why I think Delta SkyMiles 2015 is going to be terrific…
The big winners? High spenders. Yes, that includes us.
First, the obvious winners are people who spend lots of money on airline tickets. That’s basically rich people and high level corporate travelers. Good for them.
René seems to feel that some of those folks are losing under the new system because Delta is capping mileage at 75,000 miles per trip, which equates to roughly $6,818 in airfare at the Diamond earning level. I’d suggest that people who are spending over $7,000 in airfare on a regular basis are, by definition, already winning. God bless the 1%-ers.
But the “high spenders” I’m talking about are the credit card spenders. The ones who know how to rack up tons of SkyMiles on a American Express Delta card without flying anywhere. Or better yet, doing it on an American Express Premier Rewards Gold card where we can get category bonuses, then turn our Membership Rewards points into SkyMiles or perhaps a host of other currencies.
Does this sound like you? If you’re reading this, it probably does.
Because most of us in this community long ago gave up accumulating miles by actually flying.
I mean, it already sounds like a quaint notion. “Honey,” says the husband from the year 2015, “did you know people used to collect miles by getting on an aeroplane and flying?” “Oh my!” responds his wife. “If they got airsick during the flight, do you think the treatment was to give them a good bleeding?” The husband and wife giggle to themselves as they head to their transporter room to beam off to dinner. (Yes, I know I said 2015, but all future stories end with people beaming somewhere, so just deal with it, okay?)
The point is that the true loyalty program aficionado has already moved on from acquiring miles via flying. So changes to the way SkyMiles are awarded don’t affect us.
But SkyMiles 2015 is improving redemptions. That’s where we win.
- We’re getting one-way redemptions (finally!)
- The option to combine miles and cash on all award bookings.
- Basic redemption levels are the same as before. Even in almost all of the premium classes, there’s no major devaluations.
- Partner awards remain on the same chart. No United-style split partner charts.
- We’re even going to get a working award calendar!!! (Oh, stop…)
The biggest complaint about SkyMiles has never been that they’re difficult to acquire. It’s always been that they’re difficult to spend. That’s where Delta is putting their improvements. Yes, we could argue that they’re long overdue improvements, but at least they’re finally happening. Easier and more flexible redemptions make SkyMiles more valuable.
What about the occasional Delta flyer?
A lot of people have noted that the casual traveler who only flies a few times a year is going to get screwed by this change. They’ll go from pulling down maybe 3,000-4,000 miles on a trip to getting just a couple hundred based on the basic fare.
OK, that’s true. But let’s unpack that last paragraph for a moment.
These are people who are only flying a few times a year. They’re getting a couple thousand miles a trip. They’re probably flying not just Delta, but Southwest, JetBlue, American, and even (gulp) United. Ergo, they’ve been picking up maybe 5,000 SkyMiles a year total. At most.
Do you think they’ll even notice these changes?
These folks aren’t getting screwed. Because like most of the general population, they’re choosing flights based price and schedule. Not reward programs. Probably 80% of these people don’t even know their SkyMiles account number. Most of them would rather have Delta put their resources towards improving service and quality than the loyalty program. They’re much more interested in getting to where they want to be with their baggage intact and doing it relatively cheaply.
Which happens to be exactly what Delta has gotten relatively good at doing.
For the occasional traveler who is interested in SkyMiles, they’ll get all the benefits of the improvements in award redemptions that we talked about earlier. Yes, it’ll take them longer to earn miles, but Delta miles don’t expire anyway. That gives them extra time to suddenly remember, “hey, didn’t I have a Delta account somewhere? I wonder if there’s any miles in it…”
It’s definitely good for Delta.
René goes so far as to argue that the SkyMiles changes will be bad for Delta itself. I suspect that’s highly unlikely, if only because Delta controls the system and can easily backtrack if they suddenly find their high value customers in open revolt. Undoubtedly Delta did years of research before implementing these changes, and if they’ve guessed wrong about either the short-term or long-term effects, it’s not terribly difficult for them to undo things. In fact, forget undoing — they’d more likely just sweeten the pot a bit to get their traffic back.
But I honestly doubt that will happen.
As René, Lucky, and almost everyone acknowledges, Delta is currently running the best legacy carrier in this country. Their service, reliability, and elite perks are essentially unmatched. And that’s the ballgame, because the vast majority of people just want to get from Point A to Point B as easily and cheap as possible, and the rest of their customers are business flyers who are more concerned about elite status than redeemable miles.
In fact, if we’re completely honest about it, Delta theoretically doesn’t even really need a frequent flyer program at this point to continue as a successful airline. They could keep only the Medallion program and get rid of SkyMiles entirely.
Except SkyMiles makes Delta a ton of extra money on the side through the sale of miles to American Express and others, so they’re not getting rid of it anytime soon. But when it comes to the business of actually flying people around in commercial aircraft, SkyMiles has probably outlived its usefulness to Delta, at least for the moment.
So if you were worried about Delta (and I’m sure you were), you can sleep well tonight. They’ll be fine.
The Big Exception
There’s one group of people who are going to do significantly worse with SkyMiles 2015. That’s mileage runners.
Now, let’s first note that SkyMiles 2015 doesn’t include any additional changes to the way elite status is attained. Medallion Qualification Dollars were added this year and aren’t technically part of the 2015 changes. René is lumping it all together in his analysis and predictions about future changes, but even the MQD requirements can be waived with enough spend on Delta credit cards.
(You could argue spending $25,000 a year isn’t that easy for general members of the flying public who don’t know about manufactured spend techniques. I’d argue back that if you’re a mileage runner, you’re probably not a general member of the flying public.)
So mileage runners aren’t going to lose their ability to gain elite status, at least not any more than they already have. But they’ll lose all those extra redeemable miles they used to rack up doing their mileage runs.
René’s a mileage runner. That’s why he hates these changes. I get it.
But mileage runners are a small subset of an already small community that’s obsessed with loyalty programs. If they’re they only real “losers” in these changes, that’s not going to be representative of flyers at large.
Hang on, though. What about the business traveler who doesn’t fly on high priced tickets? Yes, some of them will lose as well, but it’s much more of a mixed bag. It depends greatly on what type of routes one is normally flying and how far in advance they’re being ticketed. A business traveler with lots of short flights purchased only a few days in advance will probably do just as well or better under the new system, while a cross-country traveler who books weeks ahead will likely do worse.
So I don’t think it’s fair to say that as a group business travelers are losing with these changes.
The Devil’s Advocate says SkyMiles 2015 is just another change in the game.
The loyalty world changes, and we change with it. I don’t blame René for being unhappy, but I don’t think his travel patterns are the norm for most people. What’s bad for René isn’t necessarily bad for everyone. Most people have already changed their game, so SkyMiles 2015 just means that the remaining folks who are still focused on mileage runs will have to change too.
And SkyMiles 2015? Great for almost everyone. Just like this post is great for almost everyone. Except for those of you who were hoping I’d throw some shade at Plucky. OK, fine, just for you guys, here’s a random photo of one of the “Real Housewives” chicks surrounded by yellow rubber ducks and snark…
Devil’s Advocate is a weekly series that deliberately argues a contrarian view on travel and loyalty programs. Sometimes the Devil’s Advocate truly believes in the counterargument. Other times he takes the opposing position just to see if the original argument holds water. But his main objective is to engage in friendly debate with the miles and points community to determine if today’s conventional wisdom is valid. You can suggest future topics by sending an email to dvlsadvcate@gmail.com.
