We’re likely to see fewer (base) miles earned by flying at Delta with their new revenue-based points-earning scheme.
But we’re also likely to see more miles earned overall in 2015 than we see in 2014 and than were earned in 2013.
Net net I expect rewarding miles based on ticket price to mean fewer miles earned in total from butt-in-seat flying. With a ‘break-even’ average of 20 cents per mile in ticket price to earn the same number of miles in 2015 as in 2014, and with Delta earning less than 20 cents per seat mile on average, they should be printing fewer miles.
In order to average 20 cents per seat mile across passengers, they’d need ‘passenger revenue per available seat mile’ to be 16 cents at a systemwide 80% load factor for the entire year. In 2012 it was just over 12 cents. They’re not even close.
Now it’s possible that frequent flyers have a higher average spend per mile than those not crediting miles. But there’s no way the new system means more miles, on balance I’d make a strong prediction there will be fewer.
And yet Delta has been almost entirely inactive in the promotion space the past two years. They used to print miles like mad, theirs were perhaps the easiest miles to earn (or at least up their with US Airways). They offered 100% bonuses on transferred miles, 50% and higher bonuses on transferring points in from American Express Membership Rewards, and a variety of activity bonuses.
For the past two years we have seen only reactive bonuses, things where Delta couldn’t be left behind, like big bonuses for premium travel between the US and London. In these cases, Delta was a follower rather than a leader in making a splash with their loyalty program to drive business; even premium business.
Other bonuses have been small ball, the occasional Hilton bonus of a few hundred miles. The only major innovation has been its ‘Crossover Rewards’ partnership with Starwood Preferred Guest.
They basically shut down their major promotion efforts and printing of bonus Skymiles while they retooled their program.
With the launch of their new program in 2015, we can expect them to return to the promotion-and-bonus game. And that will mean more miles.
How will this net out? There will be some reduction in the roughly half of miles earned through flying, and increases in the miles earned through means other than flying.
On balance Delta’s frequent flyer program changes should make it less revenue-based, rather than more, even as flight earning becomes more so. And that could well shift the balance in the program towards non-flyers playing in the Skymiles space (I earn most of my Skymiles >via the Suntrust Delta debit card, for instance).
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