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It seems like everyone is saying that it is a done deal and that Delta will switch over the Skymiles program to a revenue based earning model with similarities to the new discounter ticket award model that took place September 1st of last year. Others are even saying they will go to a distance based awards model making the cost to spend your points for long distance reward trips even higher.
To me, there are many reasons this is NOT going to happen this year! There are also reasons it may not happen next year or ever for that matter. Why? I have a rather long list. See what you think.
- Profit. There would only be two reasons to switch over. The most important, to Delta, would be money. Could they make MORE money with a revenue based (RB) system? Doubtful as you will see below. The only other reason would be if flyers wanted it and would be more happy with it. We know a majority would not be!
- MQM’s are a HUGE money maker to the company. AMEX must pay a bundle for the ones they give away each year. Also, this is year two for selling MQM’s. (see much more on my guest post at PM&M today on this topic).
- Skymiles program is a money maker. Again AMEX buys a bunch. Delta gives them out for every kind of issue because they have value to us. If they become worth ½ what they are now, the “point” of the program begins to go away. Also, right now, with the award calendar broken, and most flyers uneducated on how to get low level awards, most just redeem at mid or high. Thus, the program right now, “works” for the company. If it ain’t broke, don’t break it!
- Partners. Think about Skyteam. AF is already upset at Delta over award space. If now, they make it even harder for the rest of Skyteam to get Delta seats, the French Revolution part deux may be on the way. AF/KLM needs to get their labor and other costs in line and make money. Delta is now making nice money. Upsetting the rest of the children at this point would not be good!
- Promotions. We have seen e-Miles and e-Rewards exit from promotions with Skymiles. White board is new and we are sure to see many transatlantic bonus Skymiles deals as the market tightens up and other airlines giving away points as well. If the points become worth much less, these promotions will also be worth much less. Being able to give away something that costs you basically nothing to earn real money is great biz when you can get it. Why make it harder when it is so simple now?
- Social media. Delta is uber aware of “us”. Not just Delta Points that so many at the company read each morning, but you and me. With Twitter, Facebook, MilePoint & Flyertalk – we can make a lot of noise. Back when SSM, that is Save Skymiles, happened so many years ago there was no social media to drum up attention (back in 2003). Can you even imagine what a full court press could do now? The bashing would NEVER end or letup. People would come unglued!
- Legal. With the uproar from flyers, some jumping ship and going to other airlines, like the new AA/US AIR, who I am sure would LOVE to get upset Delta flyers over to their program, spending money they will need, to everyone who stays deciding to get the Feds involved or other ways if they can. I am not saying this will work, but Delta is PROUD that there have been so many less complaints to the Feds in 2012. This would ensure a never ending stream of litigation, complaints and red tape. That sounds like a great way to mess up a money making machine that now is Delta!
- Selling the kitchen sink. Right now, you can bundle everything. Everywhere you turn Delta is selling “stuff”. You in the seat are like a captive viewer for the “Home Shopping Network”. Drink, Food, WiFi, movies, Sky Mag within reach of every flyer. This is a marketing GOLD MINE. Think of each of these flyers tuning OUT due to the fact they feel they are being ill-treated by Delta. Would I get stingy with my flight dollars if a RB system came into effect? You had BETTER BELIEVE IT! And I think I would not be the only one to feel the same way. Why would Delta kill the cow that is giving them the milk to make the best cheese this side of Wisconsin.
So there you go. Now I do not put it past my beloved airline of doing something totally and utterly stupid and self destructive like making the jump to RB, but I would like to think that the money right now is way too good to just mess it all up! – René
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