Time to Forget About Airline Rewards Programs?
NEW YORK ( MainStreet) The revolution began in Atlanta and you may be a victim.
That's because Atlanta-based Delta has just announced wholesale changes in its flight rewards program that fundamentally alter the calculus of awards. Historically - from the very beginning of airline awards programs more than 30 years ago - awards have been earned on the basis of miles flown. No more.
Now, at Delta, awards will be earned on the basis of dollars spent, effective January 1, 2015.
"There will be winners and there will be losers here," said Tim Winship, founder of FrequentFlier.com.
Probable winners: business travelers who fly on full fare tickets.
Certain losers: occasional travelers who fly on sharply discounted flights and who may even have learned to spike their mileage totals by taking the occasional "mileage run," that is, a flight essentially to nowhere that is taken - on a low cost ticket - simply to rack up miles to be redeemed for an award and/or to help win frequent flier elite status with a carrier.
This revolution can get personal. Case in point: I count myself a sure loser and that is despite having enjoyed in the past few years "free" - paid for by miles - flights cross-country to San Francisco and also to Paris and Rome. But those miles, mainly, were earned with savvy low cost tickets and, going forward, the new carrier math likely will shut me out.
Make no mistake, Delta is not alone in tying awards to dollars spent. Already, both Southwest Airlines and JetBlue do likewise. And Winship is betting that the other two, big, domestic legacy carriers - United and American - will follow suit.
"It's a matter of time," said Winship, who cautioned that going forward with a program that involves a fundamental shift in how to compute a customer's value is both time-consuming and arduous ("Delta spent three years on this change," said Winship). So don't expect the other two carriers to quickly match Delta, just know the change almost certainly is coming.
At Delta, the math remains fuzzy - not all details of the new plan have been released - but what is clear is that fliers will be awarded 5 to 11 miles for each dollar spent, Variations arise with the elite status level of the customer. The higher the status, the sweeter the reward.
Last year, a $500 cross-country roundtrip flight won a traveler roughly 5,000 miles, more if the flier had elite status. Now that Delta ticket will earn as few as 2,500 miles, half as much.
Which means that earning rewards will become twice as hard for that budget traveler.
Perhaps impossible for non-elites flying discounted tickets? That's the fear that is spreading fast among travel experts.
Travel blogger Joe Brancatelli, who files at JoeSentMe.com, said, "If you are not a frequent flier, racking up airline miles now is a waste of time."