Like many other frequent travelers, Glenn Haussman got an e-mail from Delta Air Lines about an ‘‘update’’ to its SkyMiles loyalty program. It was so understated some passengers did not bother to read it. But Haussman did.
‘‘I was not thrilled,’’ says Haussman, who works for a hotel industry website in New York. ‘‘It made me feel less valuable to Delta.’’
How can a loyalty program make passengers feel unappreciated? Delta is the first legacy airline to tie the value of its frequent-flier program to the amount of money you spend, as opposed to the number of miles you fly. Beginning Jan. 1, 2014, its frequent fliers will earn ‘‘elite’’ status, which gives them access to upgrades and other perks, through a combination of miles flown and annual spending.
It’s the latest in a series of unpopular but necessary changes that are leaving some travelers questioning the value of rewards programs. ‘‘When they peg a dollar amount to my travel, it seems as though they’re penalizing me for planning my travel well in advance of others,’’ Haussman says.
The reason is simple: The current program is unsustainable.
Jim Knisely, Delta’s general manager for SkyMiles operations, says the old program worked when the distance flown aligned with the price of a ticket, as it did three decades ago, when loyalty programs were created. ‘‘But that’s no longer the reality of our industry,’’ he says.
‘‘The objective here is merely to try and keep a program successfully running as originally designed,’’ says Krista Paul, founder of UsingMiles.com, a loyalty website. Delta had too many elite fliers competing for a limited number of perks.
Airlines can change the terms of loyalty programs for any reason, according to their rules. They can even eliminate their programs, because the fine print says the miles don’t belong to you; they’re airline property. But some Delta customers feel betrayed by this ‘‘update’’: They say the airline is breaking a promise to reward them.
‘‘It’s not a miles program,’’ says Nancy Dickinson, a website editor in Arizona. ‘‘It’s a money-for-Delta program.”
Travelers should get used to it, says an airline loyalty expert, Tim Winship. JetBlue Airways, Southwest Airlines, and Virgin America already offer frequent-flier programs that reward air travelers based on how much they spend, he says. Delta is the first legacy airline to adopt a similar model. ‘‘There’s still some value to be squeezed out of the programs,’’ he says. ‘‘But it’s becoming increasingly difficult.’’
Winship and others say the idea that passengers who spend the most should get the most will be standard. US Airways is thought to be considering similar changes.
But how far will airlines go? In travel, prices change so often that it would be difficult to use dollars spent as the sole criterion for rewarding customers, says Erin Raese, president of Loyalty 360, a marketing association. ‘‘For example, I know the value of the reward I’ll receive when I reach a certain spending threshold with Staples,’’ she says. And it’s consistent, no matter how many products she buys or where the purchase is made. ‘‘But can you tell me definitively what an airline mile is worth in dollars? Probably not.’’
For that reason, experts predict that a hybrid model, in which loyalty is measured through a combination of miles flown and dollars spent, will be used. Such a program would most benefit business travelers who fly frequently; these are the so-called ‘‘high-value’’ passengers airlines want to recognize as elite.
But changes like this have a way of making other travelers rethink their loyalty. Kim-Marie Evans, a Delta frequent flier, says this is the latest in a string of disappointments. The airline recently took away her free-checked-bags benefit and her lounge privileges. ‘‘Even though I log a ridiculous amount of miles with Delta, I feel completely unvalued,’’ she says.