Huge changes to the Delta Skymiles program – earning by price

This is breaking news – just announced yesterday is that Delta is transitioning from a miles-based earning program to a revenue-based earning program, starting in 2015.  This would make them the first among the “major” US airlines to do so (some of the more “low-cost” airlines such as Southwest or Frontier already do this).  Inside Flyer has the breaking news, and there is a thread on Flyertalk that is attempting to make sense of it.

Some history

Historically, you have earned airline miles based on the number of miles that you actually fly.  It actually took me awhile to realize this, but this is why they are called MILES, after all!!  So I flew CVG-LAX last year, which is 1900 miles.

So I received 3800 Delta Skymiles (for a roundtrip).

The New Model

The new model for Delta (starting in 2015), is based on the price of a ticket and what status you already have with Delta.

• Non Medallion – 5 Miles/$1
• Silver – 7 Miles/$1
• Gold – 8 Miles/$1
• Platinum – 9 Miles/$1
• Diamond – 11 Miles/$1

So since I have no status with Delta, and my ticket costs $325 (about), instead of 3800 miles, I’d have earned 1625 miles (less than half).

(One of) the reasons that they are moving this way is the concept of “mileage runs”.  There is a whole subculture of travelers that look for high miles flights at low prices (Flyertalk thread here).  Many times people intentionally take flights with multiple stops to earn the most miles possible.  One example from the front page of that forum on Delta is MDW-PDX for $264.  From Chicago to Portland is only 3502 miles roundtrip, but instead you can fly via MSP and LAX one way and via ATL on the return

That earns 5480 miles for $264, which is a cpm (cost per mile) of 4.8 cents, which in terms of mileage running makes it okay (but not great).  This is the kind of exercise that Delta is trying to get rid of – under the new model that would earn $264 * 5 or 1320 miles, or 20 cents per mile.  In fact, EVERYTHING is 20 cpm (5 miles / $1), if you are non-elite, and even the highest level of elites are only getting 9cpm (11 miles / $1)

Earning miles by credit card

This announcement actually doesn’t really faze me much.  My mile earning strategy does not typically involve paying for flights.  In fact, I don’t like paying for ANYTHING :-).  This is what Milenomics calls this EQM Zero.  Per the announcement, earning by credit card remains the same so you tell me what’s easier.  Taking that all day convoluted flight from Chicago to Portland, or making a trip or two to CVS with your Delta Amex?  I think I know what MY answer would be.

Redeeming miles

Unlike Southwest, which has a revenue-based plan for earning AND redeeming, Delta is sticking with a zone-based redemption model (at least for now).  A few changes that they’ve introduced on this side, mostly positive in my opinion

• No blackout dates on Delta flights…?
• More award seat availability…?
• Miles + Cash offer available
• One-way awards at half of round trip rate
• New award calendar

Anything that they can do to fix / upgrade their website, which is nearly impossible to navigate when trying to figure out award availability would be great.

Conclusion

So I can see why this is a huge deal for people who fly Delta for business (especially the many Cincinnati-based P&Gers that I know), as well as people who use mileage runs to accumulate lots of SkyMiles, for me as well as people who have travel patterns such as mine, it’s not that big of a deal.  I would expect American and United to follow suit in some way at some point as well – I think this is definitely the mile model of the future.

How about you – will this affect your travel for 2015?

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