More or less the only dimension along which US airlines compete is fares. Their products are otherwise extremely similar. Delta is a little more reliable. United has a little better mileage program.
But they compete largely on price and not quality. American has reduced the number of extra legroom coach seats and is introducing the 737 MAX with less space between seats than ever before. Legroom in Delta first class is shockingly tight.
Last year airlines’ got at an average of 14.1 cents for every passenger mile flown, down from 14.44 cents in 2015, and 15.71 cents in 2014.
Since United and then American copied Delta in:
- Awarding miles based on price of a ticket rather than distance flown
- Requiring minimum ticket spend for elite status
That means fewer redeemable miles being earned from flying — at a time when the price of awards has been going up and continues to do so — and more travel necessary to meet elite status spending requirements. As programs go revenue-based, falling average fares make those programs less valuable automatically. Customers buying the fares that airlines offer won’t be rewarded as much.
Already the move to revenue-based mileage earning was a devaluation.
- The number of miles required for an award has been going up, even for an airline’s highest-spenders.
- The break-even spending per mile to earn the same mileage as before was set between 18 and 21 cents per mile, when the average fare was around 15 cents. You had to be a high spender just to break even, putting the lie to the idea that high spenders were being rewarded more (while each mile was worth less).
Now lower fares mean fewer miles.
To be sure elite status spending requirements are generally set at 12 cents per mile, which is less than the average fare. However the gap between minimum and average is shrinking.