Delta’s new frequent flier policy — a war on corporate travel departments and leisure travelers?

by Janice Hough on February 28, 2014

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It’s not a secret that airlines prefer passengers who spend money. Increasingly, carriers have been steering their best rewards to travelers who spend the most money.

Pay a higher fare, get higher up the upgrade list. Book a full coach or business fare, get more miles. Pay a high enough fare and get a “free” upgrade. The list goes on.

Now, Delta Airlines has really raised the ante by announcing a switch in 2015 to an ALL dollar-based mileage system, where the miles you get towards awards depend solely on the price you pay. Book last-minute on a flight from, say, Washington, DC, to Cincinnati, 388 miles each way, you might get three times the miles you used for a trip from San Francisco to New York.

Until this last move by Delta, they, together with United Airlines, required a minimum spend as well as a minimum number of miles to achieve elite status.

That earlier change, while it annoyed mileage junkies and those who travel regularly at the lowest fares booked months in advance, probably makes some sense. Like many ideas, the devil is in the details, and as with the recent frequent flier mileage changes made at United Airlines, many travelers are likely to be extremely upset when they discover the fine print.

Southwest, JetBlue and Virgin America already have mileage programs that focus on spending. However, Delta is the first legacy carrier to move to such a system and the fallout is likely to be interesting.

The new system curiously enough won’t affect qualifying for status, which will remain mileage based. But award miles, the miles travelers use for upgrades and free tickets, will be solely a result of money spent.

Current elite-level leisure travelers, even those who travel frequently, may simply decide to save money and stop focusing on their relationship with Delta. It seems the airline has decided to let them go. But, with business travelers it is another story. This is where the fun may start.

As a travel agent, I advise corporate travelers to book in advance when they can. A discounted business class ticket booked 30 days to Europe might have large change fees, but might be as low as $4,000-$5,000 compared to $10,000 or more for a last-minute ticket. Within the U.S., the differences can be even larger: $300-$500 for a roundtrip transcontinental ticket compared to almost $2,000 for a full-price last-minute ticket — less than half the cost.

In some large corporations, this could be a non-issue where travelers have no real control over booking their travel. However, in many small to medium-sized companies, travelers are on the honor system to book the best prices possible. In my experience, most of them are pretty responsible.

But, what if being a good corporate soldier means you get only 2,000 miles for a roundtrip ticket between California and New York? When if you wait you might get more than 5,000 miles. Miles you can use for your own vacation or family tickets.

It is not that hard to claim, “I’m just waiting to confirm my last meeting,” or, “I think there’s a good chance things could change.” Another easy excuse might be, “I’ve been meaning to book this trip but I just got busy.” Heck, all of those and more are legitimate excuses for waiting.

Moreover, now travelers will have a real reason to book not the cheapest flight of the day, but the most expensive one. Again, it’s not hard to find a reason to take a flight you really want. It will become one more thing for corporate travel managers to try to police.

These frequent flier rules could get even more complicated if corporations arrange group or meeting fares. Currently on United, which has only switched to a miles plus money system, group tickets don’t count towards the spending rule. If it’s all about spending, will such a trip earn zero miles?

No doubt, with Delta’s program not due to roll out until 2015 there will be plenty of time for tweaks. And, plenty of time for American and United, the other two legacy mega-carriers, to decide how closely they want to follow suit.

Once again, fasten your seat belts; it’s going to be a very bumpy ride.

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