Cranky Flier visited Delta headquarters and among other stops on his agenda sat with Jeff Robertson, who runs the SKymiles program.
Since I’m the guy who coined the phrase Skypesos to describe the program, I naturally felt the irresistable need to chime in on the conversation.
Now, the funny thing is I don’t doubt for a minute that Jeff wants what’s best for the Skymiles program. And he understands that he needs to deliver value for his members (though he might not want to deliver too much value) in order for it to be a long-run value creating proposition.
And I’d even bet that if Jeff had his druthers, Delta would make a whole lot more award seats available at ‘low’ or ‘saver’ mileage levels. Because those saver seats don’t cost the Skymiles program very much to redeem for, they get to recognize the outstanding mileage as revenue once redeemed, their balance sheet looks a lot better. At some level it’s the inventory management folks at Delta that are mostly to blame for the airline having the least reward frequent flyer program of any major US carrier.
But regardless of who inside Delta is at fault, there’s little question that their miles are less valuable than American’s or Continental’s or US Airways’ or United’s or Alaska’s.
Sure, there are folks for whom it makes sense to collect Skymiles when they fly. Living in a Delta hub city and flying enough to earn elite status, sure credit to Skymiles because those domestic upgrades matter! But even an Atlanta or Minneapolis passenger that doesn’t fly enough for status? Ok, take that Delta non-stop. But credit those miles to Alaska Airlines Mileage Plan, where you can redeem them on Cathay Pacific or British Airways…
Delta just makes fewer premium cabin international award seats available than their rivals. And Delta’s partners are on the whole more tight-fisted with seats than members of Star Alliance or oneworld.
And their domestic inventory is no great shakes, either. Though in fareness neither is United’s or Continental’s (I find American’s quite good, and US Airways offers excellent availability especially in first class and especially on routes outside of the tiniest towns they serve).
So it was with great interest that I read Brett’s report, and found Jeff’s comments quite enlightening though fairly consistent with my existing impressions.
He admitted that it’s really difficult to compare availability across airlines without just manually looking at routes, but they have recently decided to work with a third party to help get better insight on what others are doing. So this isn’t something Delta is ignoring.
Ah, the old ‘it’s really difficult to compare’ card. And it is, each route is different. But we know that Delta members redeem more miles per award based on the carrier’s SEC filings. And as someone who searches awards constantly — I’ve redeemed far more than 50 million miles in the past year — I can definitely say that Delta’s availability is on the whole quite poor. Want two business class seats to Asia? Good luck. Ever want to go to Australia? Well there fortunately it’s possible, thanks to V Australia. But when folks approach me for help with awards, they tell me what they want I think “Great! That’s easy!” and then I find out they’re working with Delta miles.
They ‘have their spreadsheet’ and say that flights are more open compared to summer. Ok, of course. When flights are less full there are more award seats available. But comparing their fall and winter inventory to their summer inventory and declaring things better is truly damning with faint praise.
It was good to hear that Jeff Robertson assures that last-minute booking fees will not return. It would be hard to bring them back when United got rid of them and American removed them for elites. But as far as I know there’s still no definitive word on whether Delta will announce minimum stay requirements on saver awards for non-elite customers who don’t have the airline’s co-branded credit card.
On Having Three Redemption Tiers Instead of Two
“The purpose was to provide another pricepoint that wouldn’t require double miles. We felt like introducing 40,000 and 60,000 is the right solution. Really, 40,000 miles is becoming popular. We have 90% or greater availability in that tier. So instead of someone spending 50,000 miles to come back at 4p on the Sunday after Thanksgiving. They can spend 40,000 miles to come back in the morning on Sunday or 60,000 to come back at 4p. It helps us manage demand.”
Spin it how you like, but ‘40,000 miles is becoming popular’ is not a good thing for members.
On Only Allowing Elite Upgrades From High Coach Fare Classes
“We have looked at YBM [the three highest fare classes that are the only ones allowed to be upgraded on international flights]. The #1 ask in the elite program is to let us upgrade off discounted fares. Two reasons why we don’t.
1) We don’t historically because we have free domestic upgrades, so we don’t subsidize international upgrades by making people pay for domestic.
2) We measured upsell to M [so that the ticket could be upgraded] and it is hundreds of millions of dollars
Delta’s upgrade policies are annoying, you have to buy a nearly full fare ticket to even be eligible to waitlist for an award. Other airlines let you upgrade any fare but require a cash co-pay in addition to miles. The kicker there is you only pay the co-pay if yo clear the upgrade. But with Delta you have to pay more upfront for the chance of an upgrade. A practice not regulated by any state’s gaming commission.
The first reason given is silly, Delta doesn’t do international upgrades from any fare because they do free domestic upgrades. Where the subsidy comes in eludes me, and makes no sense in a country where only American doesn’t do free domestic upgrades.
The reason of course is that people play Delta’s game, it’s revenue positive for them, so they stick with it. I can understand that! If customers stick with them, why offer better value or as much value as your competitors?
On Mileage Earning
“We have the most generous earn program. We always give a full mile regardless of fare class. We always give 500 minimum miles per flight to every passengers. With that said, we’ve looked at recently how many miles we give per dollar – it’s about 5 miles per dollar spent with great variation. We’re looking at what to do.”
I’m not sure it’s actually true that Delta has ‘the most generous earn program’. I’d counter that US Airways is at least as generous, probably more so, and has much better redemption.
But it’s true that Delta prints miles like crazy so it shouldn’t be surprising I suppose that they make you use more of those miles for the same seat than many other carriers’ programs do.
On the Future of the Frequent Flier Program
“The frequent flyer model of over-awarding is not sustainable and must be changed. It’s either going to be redemption or accrual or both.”
This is clearly the Skymiles mantra — be darned sure they aren’t ‘over-awarding’.