Delta’s new frequent flier policy — a war on corporate travel departments and leisure travelers?


It’s not a secret that airlines prefer passengers who spend money. Increasingly, carriers have been steering their best rewards to travelers who spend the most money.

Pay a higher fare, get higher up the upgrade list. Book a full coach or business fare, get more miles. Pay a high enough fare and get a “free” upgrade. The list goes on.

Now, Delta Airlines has really raised the ante by announcing a switch in 2015 to an ALL dollar-based mileage system, where the miles you get towards awards depend solely on the price you pay. Book last-minute on a flight from, say, Washington, DC, to Cincinnati, 388 miles each way, you might get three times the miles you used for a trip from San Francisco to New York.

Until this last move by Delta, they, together with United Airlines, required a minimum spend as well as a minimum number of miles to achieve elite status.

That earlier change, while it annoyed mileage junkies and those who travel regularly at the lowest fares booked months in advance, probably makes some sense. Like many ideas, the devil is in the details, and as with the recent frequent flier mileage changes made at United Airlines, many travelers are likely to be extremely upset when they discover the fine print.

Southwest, JetBlue and Virgin America already have mileage programs that focus on spending. However, Delta is the first legacy carrier to move to such a system and the fallout is likely to be interesting.

The new system curiously enough won’t affect qualifying for status, which will remain mileage based. But award miles, the miles travelers use for upgrades and free tickets, will be solely a result of money spent.

Current elite-level leisure travelers, even those who travel frequently, may simply decide to save money and stop focusing on their relationship with Delta. It seems the airline has decided to let them go. But, with business travelers it is another story. This is where the fun may start.

As a travel agent, I advise corporate travelers to book in advance when they can. A discounted business class ticket booked 30 days to Europe might have large change fees, but might be as low as $4,000-$5,000 compared to $10,000 or more for a last-minute ticket. Within the U.S., the differences can be even larger: $300-$500 for a roundtrip transcontinental ticket compared to almost $2,000 for a full-price last-minute ticket — less than half the cost.

In some large corporations, this could be a non-issue where travelers have no real control over booking their travel. However, in many small to medium-sized companies, travelers are on the honor system to book the best prices possible. In my experience, most of them are pretty responsible.

But, what if being a good corporate soldier means you get only 2,000 miles for a roundtrip ticket between California and New York? When if you wait you might get more than 5,000 miles. Miles you can use for your own vacation or family tickets.

It is not that hard to claim, “I’m just waiting to confirm my last meeting,” or, “I think there’s a good chance things could change.” Another easy excuse might be, “I’ve been meaning to book this trip but I just got busy.” Heck, all of those and more are legitimate excuses for waiting.

Moreover, now travelers will have a real reason to book not the cheapest flight of the day, but the most expensive one. Again, it’s not hard to find a reason to take a flight you really want. It will become one more thing for corporate travel managers to try to police.

These frequent flier rules could get even more complicated if corporations arrange group or meeting fares. Currently on United, which has only switched to a miles plus money system, group tickets don’t count towards the spending rule. If it’s all about spending, will such a trip earn zero miles?

No doubt, with Delta’s program not due to roll out until 2015 there will be plenty of time for tweaks. And, plenty of time for American and United, the other two legacy mega-carriers, to decide how closely they want to follow suit.

Once again, fasten your seat belts; it’s going to be a very bumpy ride.

  • Charles Leocha

    As much as consumers do not like these rules, there is not much that can be done. Frequent flier miles do not even belong to travelers. The airlines maintain control and have the right to change the program at any time for any reason.

  • BobChi

    In principle there’s nothing wrong with rewarding those who bring in the most money. The real issue would be if they went to a price-based redemption system which would devalue existing miles horribly. While in some ways airlines are copycats, that’s not really so true in the frequent flyer programs, where there are vast differences between programs. Reward flights at the lowest mileage levels are far more available, for example, on United or American than on Delta, and many program rules vary substantially.
    The upside of the recent changes is the new availabilty of one-way awards, a (promised) improved booking engine, and a (promised) improved availability at low levels. We’ll see if they follow through on their promises, of course.

  • MeanMeosh

    “The real issue would be if they went to a price-based redemption system which would devalue existing miles horribly.”

    I wouldn’t say that’s always true. Southwest has a price-based redemption system, where 50 points effectively equals $1 of a Wanna Get Away fare. There’s currently a sale on flights from DAL to SAN for $256 roundtrip, so if you wanted to use points, you could get that for 12,614 points (it doesn’t work out to exactly a 50-1 ratio, probably because of how taxes/fees work out). That same saver award ticket on AA would run 25,000 points, regardless of the actual fare. As an added bonus, Southwest doesn’t restrict which flights you can apply points to – if you have sufficient points, you can redeem it for the flight. So it actually can work to your advantage, depending on how the program is structured.

  • charlieo

    In a sense it’s a relief. I’ve been a “status” flyer for over 25 years. My airline of choice being Continental now United. I’ve been a very loyal customer using my own money, not a corporations. In many instances it has cost me, but I’ve remained loyal.
    I’ve watched my elite benefits sink to almost nothing and I’ve still remained loyal (I know – what’s wrong with me!). Now these changes will give me the reason to no longer remain loyal. I am not going to spend more money so that I can meet United’s qualifications (read the fine print people, you won’t even know how many points you’ve actually received until after the ticket has been purchased). United has done nothing to retain my loyalty so yes I’ve been the fool, that time is over. From now on it’s the least expensive flight I can find. This will ultimately benefit me, I’ll be able to travel more often by not being a loyal customer.

  • Dave

    Looks to me like these programs are going the way of the Dodo bird. I’m sure the airlines won’t care much though. Delta in particular is getting really bad when it comes to customer service. They have an attitude about actually providing any. My opinion but I think it’s time to re regulate the airline fares and get rid of all of these extra charges that are ruining travel for everyone with excess charges that are only helping the airline management.

  • MeanMeosh

    This strategy seems to be designed to squeeze those that are DL captives on short, inexpensive routes. Think something like ATL-TPA or ATL-MEM, where effectively your only choice is DL, unless you want to add significantly to your travel time by taking a connection on another carrier. You could end up with a weird situation where you still qualify for status based on miles/segments, but end up with very few redeemable miles for your trouble. They know they have these travelers over a barrel, so why not? On the other hand, what benefit does this really provide those that plunk down large sums of money for expensive tickets? You don’t earn status any faster, and just end up with a wheelbarrow full of shinplasters (SkyPesos) that DL makes impossible to redeem, anyway (unless DL is serious about improving saver award availability). It just seems an odd way of combining the worst of both worlds of a miles-based program and a revenue-based one. If they really wanted to provide a benefit to high-dollar travelers, I think they would have been better off increasing the EQM multiplier for full-fare coach/business/first in conjunction with this change.

    In any event, get used to it, because I have little doubt the other carriers will follow suit soon enough. Burn those miles while you can.

  • dcta

    You know, I recognize that you’re all different column writers but why do we have to see “War on …” over and over again?

    I haven’t even read the article, though I usually like and enjoy what Janice writes, but my immediate thought is, “so what?” The consumer has entered into an agreement that brings him/her benefits. It is clear on entry that the terms may change. So they are changing.

  • janice

    DCTA, fair enough. Maybe it’s over kill to say “war” with leisure travelers. But for business travel where it’s someone else’s money, I do think this puts Delta and corporations who have travelers who fly them at complete cross purposes. Because travelers WILL try to book more expensive tickets to get more miles. If this plan sticks I’ll wager money that the average business travel ticket price goes up. And it’s going to be interesting to see companies try to keep their travelers on cheaper tickets.

  • StephenD

    You earn miles by the ticket price. However, the real rub is that you must still earn Medallion status by both miles and cost. Ah … I sure do miss the good ol’ days.