How Delta Airlines Got it Wrong

Most people know that I’ve been a loyal Delta Airlines customer for over a decade. Mostly, to secure enough miles to remain a member of their frequent flyer program (FF). However, they’ve made some changes that will force me out of the program and without the program, there is no longer a need to think “Delta first” when looking to travel.

Until recently the way the program operated was pretty simple. In a calendar year, a customer had to accrue 25,000 miles to maintain the lowest level (silver) in the program. At that level, I was able to get my baggage fees waived and be eligible for upgrades to first class. I rarely ever got the bump up to first class but sure looked forward to seeing how close I got.

It was hard to come up with 25,000 miles every year but back then I always thought “Delta first” when looking to book a flight. If a flight were slightly more expensive on Delta, I could justify sticking with them because of the baggage fee waiver which could be as much as $50. I’d also be willing to accept a more inconvenient flight because there was always the chance that I could be inconvenienced in first class!

They have redesigned the program so that now I need to spend $3,000 on flights along with flying 25,000 miles in a calendar year to secure silver status. Be warned that the full ticket price doesn’t count here. Only the base ticket price and any airline fees count which could mean you’d need to buy an entire other ticket to make up the difference.

 I’ve done some back-of-the-envelope calculations of my past spending patterns on Delta flights and realize that I normally hit 25,000 miles at about $2,100 worth of flights. What that means is that they’ve actually dis-incentivized me to even try.

Think about this, under the old system if I got to 24,999 miles it was worth it to me to find a way to find one more flight (not even counting all of the effort it had to take at that point to get to 24,999) because I’d get a chance to recoup my money in saved baggage fees and the comfort of getting a ride or two in first class.  However, now if I get to 24,999 miles I have no incentive to find another flight (at least not on Delta) because I’ll still be about $500 short on the spending requirements.

So there is no incentive to try to get to 25,000 miles because I’ll not make the spending requirement. If that’s the case there is no incentive to seek out Delta first since I’ll have no chance for baggage fee waivers or opportunities for first class. If that’s the case, why not find the cheapest or most convenient flight possible?  

So instead of getting 25,000 miles a year from me, they’ll get something closer to zero. Instead of getting around $2,100 a year, they’ll get closer to nothing. It’s a simple expected income problem that someone at Delta failed to calculate properly. They knew that some people would increase spending to the new threshold of $3,000 a year but they didn’t realize that the rest don’t stay where they were previously….they all go to zero. The gain from the few who hit the new spending minimum will be more than offset by the many who just go look for another airline.

 You really blew it this time Delta!!!

 Additional Information:

Since posting this item, someone pointed out to me that Delta allows for a waiver of the $3,000 spending minimum on flights with the use of a Delta Airlines credit card from American Express (does anyone still accept that?). You have to spend $25,000 a year on the thing. That’s over $2,000 a month in spending with this card. For that much you could simply buy the tickets.