I sat on a panel this morning with Delta’s Karen Zachary (who had interim responsibility for SkyMiles after Jeff Robertson shifted roles at the airline), Club Carlson’s Teresa Comparato (who manages the program in Europe, Middle East, and Africa), and Bob Fawson who surveys consumers extensively.
A few interesting observations from the other speakers that seemed worth sharing:
- Survey data suggests that about half of airline frequent flyer members believe their program has either moved to a revenue-based system or will. A large chunk of members also believe that their program could. Interestingly, even at airlines that are already revenue-based (and in Southwest’s case have been since 2011) at most 25% of those airlines’ members realize it.
- Teresa Comparato, prompted by a question about Delta and Starwood, reported that they’re talking to airlines in Europe about partnerships and they do see real value in those arrangements. She also mentioned that they do soft landings for elite status.
- Club Carlson members in Europe who are close to a tier are being given that tier, especially for re-qualification. That’s something new that they’re testing and may import to the US market.
- While I’ve made the case in the past that revenue-based mileage-earning at Delta and United is less rewarding for members overall (since the ‘break even’ threshold for their new programs is set at 20 cents per mile, while average revenue per seat mile at both airlines is lower than that), it’s also the case that elites on average spend more than the average customer.
Karen Zachary mentioned that Delta is awarding 10% more miles this year to their elite members. This relatively higher earning for elites is something they built into the model, rather than the effect of the program.
You can use this 10% figure to back into the revenue premium they’re earning from elites, although you’d need to also factor the premium they earn at their hubs before drawing conclusions about elite behavior as such.
Gee, THIS elite ain’t getting 10% more…try 50% less. I wish that I could be at tonight’s Delta event, although I suppose I’d be muzzled after one question…Good thing I drafted some questions for my SO to ask in my absence. 🙂
Last I checked, I was up about 2500 SkyMiles over the old program (captive DM, with a lot of short-notice flights), so more like 6%. OTOH, I’m almost done generating my annual 180K SkyMiles from Amex, so the difference is mostly noise…
Most people I encounter outside the world of the blogs, flyertalk and milepoint know very little about miles, getting flights or anything like revenue based programs. I wonder how they come up with that. The average person who earns some miles knows they can probably get a free flight and they usually think of standard domestic travel. or one dream trip possibly overseas.
Should’ve slapped Teresa Comparato for their removing of the free last night for Carlson Visa holders 😉
10% more miles to DL elites comparing which periods of time? Also, I’m paying more than 10% more for my domestic flights this year than in 2013, so a 10% increase in miles doesn’t signify DL generosity toward me. And the mileage cost of DL award travel on DL metal has been anything but flat.
Are DL elites in the main getting (closer to) ten percent more award trips on DL metal? I doubt it.
I find the stat that only 25% of pax realize their ff program is revenue-based to be interesting. Interesting but not surprising. I wonder what the percentage would be for elite flyers. I’ve long believed that frequent flyer programs are WAY too complicated and that the average traveler — even one who was fairly sophisticated — wouldn’t likely have a good understanding of how the program worked.
And maybe airlines like it this way. For example, it’s pretty idiotic to put spend on an airline credit card that earns one mile per dollar. I’m not talking about sign-up bonuses and such, but the type of regular spending that regular people do. Yet a lot of people do this. They chase the dream, but don’t spend enough time trying to figure out the details.
Instead of worrying about tier levels in Club Carlson, how about getting some locations in the U.S. that I can actually stay at. By my count there are only 8 locations in the entire New England region where I live. I stayed at a Country Inn in the Cleveland area recently and it was a very good experience. From what I hear the European properties are very nice; U.S. properties, hit or miss.