Wednesday, February 26, 2014

Delta SkyMiles moving to a revenue based mileage earning model in 2015 + other smaller changes

The big news making the rounds in the loyalty world today is the announcement from Delta Airlines SkyMiles that the program will be moving to a revenue based model for mileage earning on flights. Delta is not the first program to do so but is definitely the largest program to date to use this model. Other airlines running a revenue based model include WestJet Rewards, Virgin America Elevate, Southwest Rapid Rewards, JetBlue TrueBlue and a handful of smaller European and Asian programs.

Revenue Based Mileage Earning
In a nutshell if you don't feel like reading this entire post, the changes starting on January 1st, 2015 will provide a handsome reward those that spend a lot on their airline tickets with Delta while seriously devaluing the program for those who don't and tend to buy less expensive tickets. Overall from what we have read on other blogs and news sites the changes in a whole are not good for most SkyMiles members as it appears they will earn less miles with their travels and when you consider the massive devaluations the program has seen over the past few years this is not a good thing.

Delta SkyMiles members will earn the following as of January 1st (miles are per US$ spent on the actual fare and any carrier surcharges. Taxes do not count towards mileage earning)
  • General Non-Elite members will earn 5 SkyMiles per dollar
  • Silver Medallion members will earn 7 SkyMiles per dollar
  • Gold Medallion members will earn 8 SkyMiles per dollar
  • Platinum Medallion members will earn 9 SkyMiles per dollar
  • Diamond Medallion members will earn 11 SkyMiles per dollar
  • Plus U.S. and select international Delta SkyMiles® Credit Card Members will continue to earn up to an additional 2 miles per dollar (or corresponding earning rate) on Delta purchases with the Card. (Which means this should 3 miles per dollar for Canadian SkyMiles credit card holders)
What does this mean for the actual miles earned compared to the current SkyMiles earning structure? Depending on the route and the fare you may be better off the new system (ie shorter routes) while other who buy lower end longer haul routes may come up short with the new system. Here is an example using Delta's calculator showing the miles earned on Delta between Toronto and New York and then Toronto and Paris. As you can see the new rates are good for the JFK flights while the Paris flight takes a significant hit

But to put it in perspective, if you are a last minute buyer of tickets, say in business class and hold status with Delta then you stand to reap some huge mileage earning rewards:

As you can see a Platinum Medallion member flying on a $4,000 Business Class fare Toronto to Paris will earn more than double the miles they currently do.

What about mileage earning on Delta's partner airlines?
Flights marketed and ticketed by Delta’s partner airlines will earn mileage based on a percentage of distance fl own and fare class paid. More details will be announced later in 2014

Does this affect how Canadian's earn Medallion status?
No, unlike the changes for U.S. based members where they need MQMs (Medallion Qualifying Miles) and MQDs (Medallion Qualifying Dollards) Canadians only require the MQM portion of elite status qualifying. MQM's will still be awarded on a 1:1 basis on your actual flight mileage.

What other changes are happening?
Delta has also announced some other changes on the redemption side of things although all details are still not out yet:
  • No Black Out dates - Already offered but not sure how this will be priced
  • There will be more Award Seats available at the lowest redemption levels and more redemption levels overall. All we know is they are moving to 5 redemption tiers from 3.
  • One way awards will be offered at half the cost of round trip awards. (The same feature Aeroplan put in place earlier this year)
  • Miles + Cash option - Similar to other airline who have introduced this feature (SAS, Alitalia to name a few) you will be to pay for flights with part cash and part miles. It appears however it won't be the 'slider' option we see in some cases that let you set the amount of miles and cash. The miles and cash will be set on Delta's side.
  • A new award calendar. Delta has taken tons of flack for their current online system. We can only hope it does get better.
Want more details on the new SkyMiles program?  Click here to visit Delta's page for the 2015 SkyMiles program

What are your thoughts on the changes? Will they be a devaluation for you or will they be a boon? Are you going to stick with SkyMiles or move to another program? Who do think will follow suit and be the next to introduce a revenue based program? Let us know by commenting below!

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