The Delta SkyMiles Discussion

And now, the talk you’ve been waiting for. Let’s talk SkyMiles. As someone who considers himself miles-agnostic (meaning it doesn’t impact my flight purchase decision), it’s kind of funny that I end up getting into the details with these programs. But I know that it’s a topic that’s important to a whole lot of you. And SkyMiles is one of the more talked about programs.

It’s a program that many elite members love to hate, but it hasn’t deterred them from actively participating. Sure, many former Northwest elites have put on the rose-colored glasses and miss the days of WorldPerks, and others have a long list of complaints as well. It’s a tough balancing act for the airline, and that was the chief topic of discussion when I sat down with Jeff Robertson, VP of SkyMiles.

Highly Addictive Drugs

Despite what you might imagine, Jeff doesn’t wear a bullseye on his back, but he really does enjoy debating what’s right for the program. I found him to be thoughtful, and when our allotted time was up, the conversation just continued, probably to the dismay of the people waiting outside for his next meeting.

As you might imagine, he began by saying that “we want to do what’s right for Delta.” Of course, that’s never going to please everyone, but I was particularly interested in what that meant for dealing with the competition. American and United/Continental were that ones that had me most interested because they are the main competitors, have more flexible award use and, in my opinion, have better availability at the lower levels. So what about them?

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. Then, he went to the spreadsheet to talk about availability.

It seems that Jeff has his availability reports accessible at all times. He pulled one out to give me a snapshot of what he was seeing. “We were tight this summer with availability.” But things are now more open. It seems that this will be an ongoing struggle for the airline, but it is something that is constantly on the radar.

Some more interesting topics from our discussion . . .

On Eliminating Last Minute Award Fees
“When we eliminated the award redemption fee, the percent of increase in redemptions was tremendous. It was one of the best decisions we’ve made. That’s not coming back.”

On One Way Redemptions
“There’s no reason we haven’t done one-ways. It’s just not at the top of the priority list.”

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.”

On Upgrade Co-Pays
“It would be really easy for us to do a copay. I don’t like them, so it’s not a priority of mine. I have bigger fish to fry.”

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
So we continue to look at what things do we do to YBM to make it more valuable, provide a better service benefit.”

On Rollover Miles
“Rollover miles are paying off big time. Elites are significantly ahead of where they were last year excluding rollover.”

On Getting Feedback
“The most important feedback for us is what we get directly. We also do surveys, and yes, we look at FlyerTalk, blogs, news media.”

On Choice Seats
“When we rolled out Choice seats, we got killed [in the media]. But American rolled out the same program and there’s been nothing. Delta’s the only carrier not charging. Is it gaining us market share? At the same time, I hate them myself, so it’s tough. I do think seat assignments are the next horizon [for fees].”

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.”

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.”

Yep, it was an interesting discussion. Now let the commenting begin. I know you all have plenty to say.

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