Just as bad if not worse than we thought! Coupled together with the major negative changes, including a 5 tier award structure, are the announcements of one-way awards, better low level award availability, and finally fixing the website. Great, it took SkyMiles transitioning to a fully revenue based program to get these essentials. Delta of course spins all of this as positive change “in its ongoing commitment to improve the travel experience”. Here’s Delta’s press release (titled increased redemption options ) with the full details, analysis post later today:
The 2015 SkyMiles program will introduce a shift from today’s current model in which customers earn redeemable mileage based on distance traveled to one based on ticket price. The program updates will be effective Jan. 1, 2015 and will also include a new mileage redemption structure that will improve Award seat availability at the lowest mileage requirement levels, offer One-Way Awards at half the price of round-trip, provide additional Miles + Cash Award options, as well as make significant improvements to delta.com and Delta reservations Award shopping tools.
Today’s method of earning redeemable miles based on the distance a customer flies will change to a model of earning redeemable miles based on the price of the ticket purchased. Delta is providing 10 months advance notice of the upcoming program changes so that customers have ample time to make travel plans. Customers will be able to earn between five and 11 miles per dollar* spent based on their SkyMiles status, and continue to earn up to an additional two miles per dollar* when using their Delta SkyMiles Credit Card, for a total of up to 13 miles per dollar. The updated program will better reward the customers who spend more with Delta and give them improved mileage-earning opportunities. “The introduction of a new model for earning miles will increase rewards for those who spend more as well as differentiate the SkyMiles frequent flyer program for our premium travelers,” said Jeff Robertson, Delta’s vice president – SkyMiles.
The updated mileage-earning plan, for travel beginning Jan. 1, 2015, will better recognize frequent business travelers and those less frequent leisure customers who purchase premium fares. The move is consistent with a trend in the travel industry of rewarding customer behavior based on price. Customers will continue to earn additional miles for purchases with a Delta SkyMiles Credit Card+.
For travel marketed and ticketed by Delta’s partner airlines, members will earn a percentage of miles flown as determined by the fare class purchased and will also earn Medallion mileage bonuses on eligible fares.
“The travel industry, including nearly all hotel and credit card programs, has already moved to a spend-based model,” said Robertson. “Delta will become the first U.S. global carrier to make this transition to better reward our most loyal customers.“
New Redemption Options
SkyMiles members will gain even more redemption options with the introduction of up to a five-tier structure to give them a wider variety of Awards and improve overall availability at the lowest price points. The lowest level for SkyMiles Saver Awards will remain at 25,000 miles for an Economy Class Award ticket for travel within the U.S. and Canada excluding Hawaii. All of Delta’s worldwide redemption charts will be updated to reflect the new options in the last quarter of 2014 and will be effective for new Award bookings beginning Jan. 1, 2015.
In addition to offering multiple new redemption levels, the SkyMiles program will also introduce One-Way Award tickets starting as low as 12,500 miles within the U.S. and Canada excluding Hawaii and will offer customers the ability to redeem Miles + Cash to provide more Award booking options for tickets purchased at delta.com or through Delta reservations.
…and why all the change…because “we asked for it” …
“We’ve had thousands of direct conversations with SkyMiles members over the past three years and they’ve told us that Award redemption is the most important attribute to any successful rewards program,” Robertson said. “With improvements to delta.com, even more Awards seats at the lower price levels, One-Way Awards and Miles + Cash options, Delta will deliver an improved award redemption experience for all customers.”
I will be posting my thoughts later, but geez if you do the math on a JFK-LAX economy flight that currently earns 2,745 miles each way prior to any bonuses and averages around $410 roundtrip, everyone (no matter what status level) is getting screwed! …unless of course you’re buying a last minute or pricey business ticket…which is exactly the point of the revenue based program. I also hate the positive spin and the fact that Delta is essentially admitting that their award booking site is broken, but they’ll finally now fix it.