The latest effort by the nation’s airlines to lower the value of frequent flier miles is this: More will be needed to get on a flight that’s popular.
The change was announced quietly last month by Delta Air Lines, the dominant carrier at Minneapolis-St. Paul International Airport and a trendsetter in the refashioning of frequent flier programs. It will take effect next June.
The move comes after Delta and other airlines earlier this year made a major change on the other side of the frequent flier equation by making it harder for casual travelers to collect miles.
Since Jan. 1, Delta has awarded miles to its SkyMiles program based on how much money a ticket costs rather than the number of miles flown. While that’s a windfall for business fliers who pay top dollar at the last minute, it means low-cost fares don’t accumulate awards as fast.
For example, flying from Minneapolis-St. Paul to Phoenix on a $150 bargain flight on Delta used to rack up about 2,600 redeemable miles. Now, that same inexpensive flight accumulates about 700 miles, a figure derived from the ticket price without taxes and fees and a multiplier that rises for fliers in elite status levels.
Delta isn’t alone in changing its award system. United, Southwest, Sun Country and JetBlue have also instituted similar changes. Airlines are trying to reduce the problem of too many frequent miles and too few seats. They’re trying to reward business travelers who spend the most money but still satisfy the casual flier who’s complained about a lack of award seats available when they want to fly, said Chris Elliott, author of “How to Be the World’s Smartest Traveler.”
“Airlines make a lot of revenue selling miles to banks and credit cards,” Elliott said. “They’re trying to reset expectations while cashing in.” In 2008, Delta received $1 billion from American Express for an advance purchase of restricted SkyMiles. Last year, the agreement was extended to 2022.
On the surface, it appears that many of the miles awarded to Delta SkyMiles American Express card holders for purchases are being redeemed. In 2014, 296 billion miles were redeemed at Delta, the highest in the past five years. But only 7.4 percent were for award travel.
On the plus side, Delta has made 50 percent more award tickets available since January. “Award availability and redemptions are up this year,” said Delta Air Lines spokesman Anthony Black. “We’ve added more miles, plus cash options and awards at lower mile levels.”
Delta and other airlines such as Sun Country are also offering promotions that include lower fares and lower mile thresholds. Delta’s sale through Thursday includes round trip from Minneapolis-St. Paul to San Diego for 20,000 miles, a savings of 5,000 miles compared with the standard award. Sun Country UFly members can fly round trip to any of its U.S. destinations for 16,000 points if booked by Monday.
Next summer, those promotions may be less frequent. That’s when Delta will switch from using a mileage award chart to a system of calculating the miles needed for a flight based on supply and demand. Black uses a sports analogy to describe it.
“At Michigan, they price tickets to the university’s football games differently,” he said. “When Michigan is playing Nobody U, the price is lower. When they’re playing Michigan State, it’s higher.”
Some markets will be at a 7,500-10,000-mile level for a one-way award ticket, while others will be a higher level than the standard 12,500 miles.
For very frequent Delta fliers such as Dan Oldre of St. Paul, the changes represent the beginning of the end. He will reach diamond level status next year thanks to 10,000 qualifying miles from a credit card and leisure trips to Stockholm, Hong Kong and others.
“I’ll quit doing mileage runs next year and start redeeming,” he said. And thanks to diamond status, he’ll be flying business class.
“These changes make people like me quit pursuing status,” Oldre said. “After this, I’ll fly whatever airline I like. It’s kind of liberating to fly Sun Country, Spirit or American. I won’t need to stay loyal to one airline anymore.”
Fliers with smaller balances are less certain about the effect on them.
“I heard about some of the changes, but it’s not a big deal to me,” said Jim Thiher of Orono, as he waited for baggage at MSP on Tuesday after a trip to Washington state. “Delta is such a dominant presence that we’re Delta SkyMiles prisoners almost.”
For many travelers, the changes may go unnoticed for a while. According to a survey of more than 1,000 airline reward club members conducted earlier this year by Milecards.com, 69 percent of Delta customers were unaware of the change from miles-based to revenue-based awards.
“Maybe they’re resigned to it or they’re not checking their balances regularly,” said Brian Karimzad, director of MileCards.com.
And for the mileage runners who meticulously build up their bank of points and potential awards, that change and others to come are devastating. René de Lambert, an Indiana blogger who writes about Delta’s frequent flier program at Deltapoints.com and BoardingArea.com, last month published a list of 50 changes the airline has made to lower the value of miles and a list of 10 things travelers could do to make the most of the Delta program now. Overall, he is disappointed.
“I have so many cherished memories of stopovers in Paris, Rome, Amsterdam and more on award tickets,” he wrote on one post. “I will never have those memories again — thanks Delta — why don’t you kick my dog too?”