Other carriers likely to follow Delta loyalty program revamp
As Delta prepares to revamp its loyalty program to one that better rewards big spenders, an industry figure believes it could be a game-changer that other major airlines will simply have to follow.
Under Delta’s new rewards policy announced last week, and due to begin Jan 1, 2015, points will be earned based on the actual cost of a ticket rather than miles flown.
Each flyer will be eligible for between 5 and 11 miles per dollar spent, subject to the current SkyMiles status, and a further two miles per dollar if paying for a flight with a Delta SkyMiles credit card.
Jay Sorensen, President of IdeaWorks, a consultancy firm working in airline loyalty marketing, expects Delta’s competitors to make similar changes to their programs.
"Why would you fly on United to Paris in business class to earn 13,000 miles instead of flying on Delta for more than 50,000 miles?" he said.
Using a price-based model for loyalty programs is not a new concept – Southwest Airlines, JetBlue Airways and Virgin America all do this, but Delta is by far the largest carrier so far.
Customers flying on premium business class tickets will undoubtedly be the big winners, but customers who travel on the lowest priced discounted tickets can expect much fewer miles for their money than at present.
It some cases this could be reduced by over 60%.
"If American and United want to make lower-fare-paying people happy, they certainly can continue to do that, but it’s going to cost them money," said Sorensen, adding that customers on high-value fares and branded credit card users are the big money-spinners for airline loyalty programs.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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