A plan by Delta Air Lines to award frequent-flier miles based on ticket cost rather than distance flown will benefit travelers who pay the highest fares and penalize those who seek the cheapest price.
The world’s third-biggest carrier will break with tradition among large airlines when it makes the change Jan. 1, adopting a system similar to those at low-fare operators Southwest Airlines and JetBlue Airways.
Each dollar spent on a Delta trip will earn rewards of 5 to 11 miles rather than the usual practice of giving SkyMiles members credit for each mile flown, Delta said this week. Loyalty plan participants with elite status will receive the most, Atlanta-based Delta said.
“The losers are probably those passengers who aren’t of much value to the airline anyway,” Randy Petersen, editor of InsideFlyer magazine, said in an interview. “This move returns frequent-flier programs to the frequent flier. For the last 10 to 15 years, it’s really been equal for everybody.”
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Fort Worth-based American Airlines isn’t likely to follow Delta in the next few years because it’s focused on combining the awards plans of American Airlines and US Airways after they merged in December, Petersen said. United Continental is more likely to adopt similar policies, he said.
American said it’s constantly watching its competitors. “AAdvantage was the industry’s first frequent flyer program, and as we build the world's greatest global airline, we will offer a loyalty program that supports and reflects that position,” the company said in a statement.
Airlines rely on loyalty programs to build repeat business, especially among corporate fliers, who travel most often and typically pay the highest prices. While the customers earning more miles under Delta’s new plan are a minority among SkyMiles members, they produce 60 percent of the airline’s revenue, said Vice President Jeff Robertson, who runs the program.
Petersen said: “The stereotype has been that the road warrior and the leisure traveler are sitting together on a plane. One paid $500 and the other paid $150 for their tickets, but both were earning the same amount of frequent-flier miles.
“Fast-forward and the fares don’t change, but the business traveler and leisure traveler won’t earn the same frequent-flier miles going forward.”
The SkyMiles revision followed a study of programs used by Southwest, JetBlue and Virgin America, as well as credit card and hotel loyalty plans with spending-based awards, Robertson said. The airline also sought input from thousands of passengers, employees, corporate travel managers and others, he said.
“Our goal was to invest more in those customers where the frequent-flier program was the primary purchase driver” versus those who bought based on price, Robertson said.
SkyMiles had about 90 million members as of June, according to estimates by the travel website FrequentFlyerServices.com, while American had about 101 million and Chicago-based United about 90 million.