Delta Airlines announced a radical change to its frequent flier program Tuesday night. They will now be basing frequent flier rewards on the fares its customers pay instead of the miles they travel.
This marks a historic shift in favor of corporate travelers and elite fliers. The change is expected to win more business from Delta’s biggest spending customers. Although these elite fliers only account for 2% of Delta’s customers, they generate over 20% of the revenues. And the switch from distance to dollars will largely benefit the elites. Unfortunately, this change will affect all travelers, leaving normal fliers with much less bang for their buck.
The new program will work by dividing Delta fliers into four major “elite” categories depending on how many miles a year they fly and what they spend. The customers in each category will receive a certain number of rewards, depending on their elite status. Those who buy the priciest tickets will be rewarded, as opposed to those who fly the most miles.
The new program will go into effect on Jan 1, 2015, and all flights after that date will qualify. In addition, many major airlines are watching to see how travelers react to the change. If the switch goes smoothly and Delta generates more revenue, these carriers may also change their frequent flier programs.
