I sat on a panel this morning with Delta’s Karen Zachary (who had interim responsibility for SkyMiles after Jeff Robertson shifted roles at the airline), Club Carlson’s Teresa Comparato (who manages the program in Europe, Middle East, and Africa), and Bob Fawson who surveys consumers extensively.
A few interesting observations from the other speakers that seemed worth sharing:
- Survey data suggests that about half of airline frequent flyer members believe their program has either moved to a revenue-based system or will. A large chunk of members also believe that their program could. Interestingly, even at airlines that are already revenue-based (and in Southwest’s case have been since 2011) at most 25% of those airlines’ members realize it.
- Teresa Comparato, prompted by a question about Delta and Starwood, reported that they’re talking to airlines in Europe about partnerships and they do see real value in those arrangements. She also mentioned that they do soft landings for elite status.
- Club Carlson members in Europe who are close to a tier are being given that tier, especially for re-qualification. That’s something new that they’re testing and may import to the US market.
- While I’ve made the case in the past that revenue-based mileage-earning at Delta and United is less rewarding for members overall (since the ‘break even’ threshold for their new programs is set at 20 cents per mile, while average revenue per seat mile at both airlines is lower than that), it’s also the case that elites on average spend more than the average customer.
Karen Zachary mentioned that Delta is awarding 10% more miles this year to their elite members. This relatively higher earning for elites is something they built into the model, rather than the effect of the program.
You can use this 10% figure to back into the revenue premium they’re earning from elites, although you’d need to also factor the premium they earn at their hubs before drawing conclusions about elite behavior as such.