The Real Impact of Delta’s Skymiles Medallion Program Changes

Edited-SkyMiles

I received a survey from American Airlines last year. I expect they sent it to many of their
Aadvantage members. One of the questions was related to how I would react to a change in their reward program. Specifically, it asked whether I believed it was fair to base rewards on dollars spent on airfare instead of miles flown. At the time, I was open to the concept because I am based in NW Arkansas and XNA is known for being the most expensive airport in the nation. I figured that if anyone would benefit, those of us in NW Arkansas would.

Of course, American didn’t make that move and the merger with US Airways probably put a hold on any Aadvantage changes planned for 2014 and ’15. However, with Delta’s recent announcement of changes to their Medallion program, it’s clear that this is the direction airlines are headed. Delta is just the first major US airline to make the move. Virgin, JetBlue, Southwest and others have already made the change.

There are several subjects about this change that we could discuss, such as the social fairness of the model, the fact that elite status earning is still based on physical miles flown, and the other benefits they are adding to their program. However, since I’ve read several articles online and they are all missing the answer to one key question:

As a traveler, how does this impact me?

Delta has a few smoke and mirrors on their information page. The calculator only compares direct flights, there is a different earning multiplier for different status levels, etc. I did some work to overcome those challenges so I can provide a good collection of data points. 

Screenshot_022814_125941_PM

For this exercise, I’ve literally picked destinations out of thin air. It’s a random sample by the definition of the word (not necessarily statistically). I have selected travel dates of Mon-Wed, 6 weeks in advance. This schedule, and the randomness of locations, is pretty common for business travel.  Also, all calculations are based on round-trip travel.

Direct Flights:

MSP (Minneapolis) to PHX (Phoenix) Direct – $238

  • Old: 5,104 miles earned
  • New: 1,904 miles earned
  • Result: Lost 3,200 miles

MSP (Minneapolis) to ORD (Chicago) Direct – $268

  • Old: 2,000 miles earned
  • New: 2,144 miles earned
  • Result: Gained 144 miles

MSP (Minneapolis) to ATL (Atlanta) Direct – $318

  • Old: 3,624 miles earned
  • New: 2,544 miles earned
  • Result: Lost 1,080 miles

LAX (Los Angeles) to ATL (Atlanta) Direct – $462

  • Old: 7,784 miles earned
  • New: 3,696 miles earned
  • Result: Lost 4,088 miles

DFW (Dallas) to ATL (Atlanta) Direct – $638

  • Old: 2,924 miles earned
  • New: 5,104 miles earned
  • Result: Gained 2,180 miles

XNA (NW Arkansas) to ATL (Atlanta) Direct – $806

  • Old: 2,340 miles earned
  • New: 6,400 miles earned
  • Result: Gained 4,060 miles

MSP (Minneapolis) to CLT (Charlotte) Direct – $988

  • Old: 3,720 miles earned
  • New: 7,904 miles earned
  • Result: Gained 4,184 miles

Flights with 1 Connection:

DFW (Dallas) to LAS (Las Vegas) through MSP (Minneapolis) – $282

  • Old: 8,608 miles earned
  • New: 2,256 miles earned
  • Result: Lost 6,352 miles

XNA (NW Arkansas) to LAS (Las Vegas) through MSP (Minneapolis) – $389

  • Old: 7,664 miles earned
  • New: 3,112 miles earned
  • Result: Lost 4,552 miles

DFW (Dallas) to CLE (Cleveland) through ATL (Atlanta) – $406

  • Old: 5,140 miles earned
  • New: 3,248 miles earned
  • Result: Lost 1,892 miles

DFW (Dallas) to CLE (Cleveland) through DTW (Detroit) – $406

  • Old: 5,948 miles earned
  • New: 3,248 miles earned
  • Result: Lost 2,700 miles

CHA (Chattanooga) to SEA (Seattle) through DTW (Detroit) – $510

  • Old: 9,728 miles earned
  • New: 4,080 miles earned
  • Result: Lost 5,648 miles

PDX (Portland) to MCO (Orlando) through MSP (Minneapolis) – $578

  • Old: 10,944 miles earned
  • New: 4,624 miles earned
  • Result: Lost 6,320 miles

SGF (Springfield, MO) to DEN (Denver) through ATL (Atlanta) – $1,082

  • Old: 7,084 miles earned
  • New: 8,656 miles earned
  • Result: Gained 1,572 miles

International Flights:

ATL (Atlanta) to TYO (Tokyo, Japan) Direct – $1,867 Coach/$11,083 First/Business

  • Old: 25,844 miles earned
  • New Coach: 14,937 miles earned
  • New Business/First: 75,000 (Max)
  • Result: Lost 10,907 miles in Coach or Gained 49,156 in Business/First Class

ATL (Atlanta) to TYO (Tokyo, Japan) through LAX (Los Angeles) – $1,867 Coach/$5,612

  • Old: 37,564 miles earned
  • New: 14,937 miles earned
  • New Business/First: 44,896 (Max)
  • Result: Lost 22,627 miles in Coach or Gained 7,332 in Business/First Class

Using the new system for 7 Domestic Direct Flights, the traveler Gained 2,164

Using the new system for 7 Domestic Connecting Flights (1-Stop), the traveler Lost 25,892

Using the new system for 2 International Flights, the traveler either Lost 33,534 miles in Coach, or Gained 56,488 in Business/First Class

Conclusion:

With direct flights, what other writers are saying is generally true. If you buy an expensive ticket, you’re going to benefit from this change. If you buy a cheap ticket, you are not. The distance of the flight obviously has an impact on the comparison, but the price is a bigger factor.  All-in-all, there’s probably not going to be a major shift either direction with direct flights.

What others have missed is the impact on the majority of flyers, which are those who do not live in a Delta hub city.  It’s going to be very difficult for travelers who normally have connecting flights to make out well after this change. I’m not sure I can find a scenario where it will be a positive change for flyers.

The other thing that is not being discussed is international travel. As shown in just two examples above, coach international travelers are going to take it in the shorts. However, if you’re an international business traveler, it’s likely that you’ll fly business class. In this case, you probably do better than break even. In extreme cases, you can make out big.

Last Word:

After doing this analysis, I honestly hope American Airlines does not move this direction. In fact, if I were a Delta Medallion Member that was based in a non-hub city, and only traveled domestically, I would seriously consider asking American or United to match my status with Delta. AA and United may follow suit, but you’ll have at least a year of earning additional miles. That could be multiple free trips.

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