Jeff Robertson Speaks Candidly About Why The Delta Skymiles Program is Less Rewarding Than Its Peers

Cranky Flier visited Delta headquarters and among other stops on his agenda sat with Jeff Robertson, who runs the SKymiles program.

Since I’m the guy who coined the phrase Skypesos to describe the program, I naturally felt the irresistable need to chime in on the conversation.

Now, the funny thing is I don’t doubt for a minute that Jeff wants what’s best for the Skymiles program. And he understands that he needs to deliver value for his members (though he might not want to deliver too much value) in order for it to be a long-run value creating proposition.

And I’d even bet that if Jeff had his druthers, Delta would make a whole lot more award seats available at ‘low’ or ‘saver’ mileage levels. Because those saver seats don’t cost the Skymiles program very much to redeem for, they get to recognize the outstanding mileage as revenue once redeemed, their balance sheet looks a lot better. At some level it’s the inventory management folks at Delta that are mostly to blame for the airline having the least reward frequent flyer program of any major US carrier.

But regardless of who inside Delta is at fault, there’s little question that their miles are less valuable than American’s or Continental’s or US Airways’ or United’s or Alaska’s.

Sure, there are folks for whom it makes sense to collect Skymiles when they fly. Living in a Delta hub city and flying enough to earn elite status, sure credit to Skymiles because those domestic upgrades matter! But even an Atlanta or Minneapolis passenger that doesn’t fly enough for status? Ok, take that Delta non-stop. But credit those miles to Alaska Airlines Mileage Plan, where you can redeem them on Cathay Pacific or British Airways…

Delta just makes fewer premium cabin international award seats available than their rivals. And Delta’s partners are on the whole more tight-fisted with seats than members of Star Alliance or oneworld.

And their domestic inventory is no great shakes, either. Though in fareness neither is United’s or Continental’s (I find American’s quite good, and US Airways offers excellent availability especially in first class and especially on routes outside of the tiniest towns they serve).

So it was with great interest that I read Brett’s report, and found Jeff’s comments quite enlightening though fairly consistent with my existing impressions.

He admitted that it’s really difficult to compare availability across airlines without just manually looking at routes, but they have recently decided to work with a third party to help get better insight on what others are doing. So this isn’t something Delta is ignoring.

Ah, the old ‘it’s really difficult to compare’ card. And it is, each route is different. But we know that Delta members redeem more miles per award based on the carrier’s SEC filings. And as someone who searches awards constantly — I’ve redeemed far more than 50 million miles in the past year — I can definitely say that Delta’s availability is on the whole quite poor. Want two business class seats to Asia? Good luck. Ever want to go to Australia? Well there fortunately it’s possible, thanks to V Australia. But when folks approach me for help with awards, they tell me what they want I think “Great! That’s easy!” and then I find out they’re working with Delta miles.

They ‘have their spreadsheet’ and say that flights are more open compared to summer. Ok, of course. When flights are less full there are more award seats available. But comparing their fall and winter inventory to their summer inventory and declaring things better is truly damning with faint praise.

It was good to hear that Jeff Robertson assures that last-minute booking fees will not return. It would be hard to bring them back when United got rid of them and American removed them for elites. But as far as I know there’s still no definitive word on whether Delta will announce minimum stay requirements on saver awards for non-elite customers who don’t have the airline’s co-branded credit card.

On Having Three Redemption Tiers Instead of Two
“The purpose was to provide another pricepoint that wouldn’t require double miles. We felt like introducing 40,000 and 60,000 is the right solution. Really, 40,000 miles is becoming popular. We have 90% or greater availability in that tier. So instead of someone spending 50,000 miles to come back at 4p on the Sunday after Thanksgiving. They can spend 40,000 miles to come back in the morning on Sunday or 60,000 to come back at 4p. It helps us manage demand.”

Spin it how you like, but ‘40,000 miles is becoming popular’ is not a good thing for members.

On Only Allowing Elite Upgrades From High Coach Fare Classes
“We have looked at YBM [the three highest fare classes that are the only ones allowed to be upgraded on international flights]. The #1 ask in the elite program is to let us upgrade off discounted fares. Two reasons why we don’t.
1) We don’t historically because we have free domestic upgrades, so we don’t subsidize international upgrades by making people pay for domestic.
2) We measured upsell to M [so that the ticket could be upgraded] and it is hundreds of millions of dollars

Delta’s upgrade policies are annoying, you have to buy a nearly full fare ticket to even be eligible to waitlist for an award. Other airlines let you upgrade any fare but require a cash co-pay in addition to miles. The kicker there is you only pay the co-pay if yo clear the upgrade. But with Delta you have to pay more upfront for the chance of an upgrade. A practice not regulated by any state’s gaming commission.

The first reason given is silly, Delta doesn’t do international upgrades from any fare because they do free domestic upgrades. Where the subsidy comes in eludes me, and makes no sense in a country where only American doesn’t do free domestic upgrades.

The reason of course is that people play Delta’s game, it’s revenue positive for them, so they stick with it. I can understand that! If customers stick with them, why offer better value or as much value as your competitors?

On Mileage Earning
“We have the most generous earn program. We always give a full mile regardless of fare class. We always give 500 minimum miles per flight to every passengers. With that said, we’ve looked at recently how many miles we give per dollar – it’s about 5 miles per dollar spent with great variation. We’re looking at what to do.”

I’m not sure it’s actually true that Delta has ‘the most generous earn program’. I’d counter that US Airways is at least as generous, probably more so, and has much better redemption.

But it’s true that Delta prints miles like crazy so it shouldn’t be surprising I suppose that they make you use more of those miles for the same seat than many other carriers’ programs do.

On the Future of the Frequent Flier Program
“The frequent flyer model of over-awarding is not sustainable and must be changed. It’s either going to be redemption or accrual or both.”

This is clearly the Skymiles mantra — be darned sure they aren’t ‘over-awarding’.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Gary – I’ll guess that the average award you book is something like 200,000 miles. How do you have time to book 250 awards a year for people? Do you sleep? 🙂

  2. Average award is far less than 200k … sounds like Delta has you brainwashed! 🙂

    So I book well more than that per year, only evenings and early mornings and weekends really, and no I do not sleep… hah!

  3. I wish Delta would choose to keep the value of their miles rather than just give away more… I don’t chase Delta miles like I chase other airlines’ miles (especially American and Continental miles)!

  4. 10/6/10 2:59 pm (cdt)
    Been on the phone with Delta to redeem companion certificate 47shi82s for over one hour. There are NO dates in January 2011, February 2011, March 2011, or April 2011 on which my daughter and I can fly from MSp to Tampa FL. N O N E So, on the front of your envelope to me it says the hardest part is deciding who to take with you. No, its just try to redeem so we can laugh. Please advise

  5. Gary,

    I am a Northwest guy who got “bought” in the transaction of Delta buying NWA. All I can say is my 1.2MM FF miles are worth so much less. I used to book at least one Business class trip a year to Asia for family under NWA at 120K miles. Now it is truly annoying as nothing is available, and I can say for sure ALL old NWA customers I know hate this transition. I am diamond on Delta, but really the only reason I stayed was for the international business upgrades. If they dont change their ways, I will use my miles and divorce Delta. What option do I have? OK the signature drinks, food, and planes are a little better than NWA, but I would trade back in a second.

    Frustrated Diamond Tim

  6. @Tim burn your miles on Air France and V Australia and switch to a better program for intenrational upgrades for top tier elites like American.

  7. Jeff Robertson is not to be believed. He could care less about customers. As a typical member of the Delta management team, his only goal is profits at the expense of its customers, especially it’s most loyal Skymiles members.

  8. I am very disappointed by Delta’s skymiles program. I attemped to redeem the companion certificate and found out that there is no way to determine when the certificate could be redeemed. Essentially, Delta wanted me to waste time typing in different schedules and cities until one worked. When I called Delta I was hung up on once and given contrary information on separate calls. Needless to say, I will look for a new credit card and switch primary airlines.

  9. How is it that a Delta agent walked a Diamond member thought the choice benefits selections wrong, and when the member calls to get that corrected its the Diamond members fault.

  10. This year the AMEX Dela Skymiles card I will cancel. No longer care about Medallion Miles or Elite Status. As far as I can tell there is none.

    Costco AMEX also gone. I will be searching multiple websites for upgrades and pay for them if I want them. No more flying direct from MSP. AMEX must be in trouble. Delta made a bet but I will fly United and American if it is better.

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