2008: Big changes coming for frequent flyers?
 

Big changes coming for frequent flyers?
Ed Perkins on Travel
by Ed Perkins - March 27, 2008

http://www.smartertravel.com/travel-...1&u=SL4F6B4DC5

Look for some important changes in big-airline frequent flyer programs
in the coming months. Delta and Northwest have already initiated some
changes, and given the fact that big airlines often copy each other's
new ideas--sometimes the good, almost always the bad--you can expect
others to follow.

The biggest change is coming from Delta: a switch from the usual two-
tier award schedule to three tiers. According to press reports:
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* Delta will retain the base award level for domestic coach travel
at the almost universal 25,000 miles. That's for access to a highly
limited inventory of seats--those ranging from difficult to impossible
to obtain. Let's call it the "fat chance" level.
* Delta will introduce a new intermediate level, at 40,000 miles,
that will provide access to somewhere around 50 percent of its seats.
Let's call that the "fair chance" level.
* For an almost-sure-thing seat, Delta will increase the miles
required from 50,000 to 60,000. Let's call that the "fine chance"
level.

These levels are as reported in the trade press; Delta has not yet
made an official announcement of new award schedules. More
importantly, I've seen no speculation yet about three-tier award
schedules for business- or first-class travel or for award travel
anywhere but in the base 48-state area.

To me, this is the biggest program change in more than a decade. And
I'm somewhat conflicted as to whether to label it good or bad news.

* The good side is that, given the difficulty of finding "fat
chance" awards on many popular routes and at popular times, travelers
who couldn't travel at all on the old schedule will now have at least
a shot at "fair chance" seats for 40,000 miles rather than face paying
50,000 miles for a "fine chance" seat.
* The bad side is that, in my guess, the "fat chance" awards will
virtually dry up, forcing almost everyone to use 40,000 miles for the
sort of trip Delta formerly implied they could get for 25,000 miles.

Although most frequent flyer awards go for coach trips in the base 48-
state area, sizable numbers of us are in frequent flyer programs
primarily for access to upgrades and premium-class travel. We await
the new business-class schedule--especially to Europe--with a real worry
that the new "fair chance" level will be set at a level far above the
current "fat chance" levels (50,000 miles for 48-state and 100,000
miles for Europe).

So far, I've heard nothing from any other big airline. But once Delta
announces its complete three-tier schedule, I suspect several others--
if not most of them--will jump on this particular bandwagon. De facto,
the net effect will be to increase the number of miles most travelers
pay for a domestic coach trip from 25,000 to 40,000 miles.

The other change from both Delta and Northwest is to allow travelers
to buy tickets with a combination of miles and cash, though Delta is
limiting its program to elite frequent flyer levels. The airlines are
touting this sort of exchange as a big advantage. I can't see it that
way: In every case I've tested, the exchange rate of miles for dollars
is lousy.

On Northwest, for example, a round-trip from Minneapolis to Portland
costs $393 in all cash or $232 plus 25,000 miles. That works out to a
cash value of 0.6 cents a mile, a pretty poor figure. Moreover, those
cash-plus-miles tickets are full of restrictions and limits. Perhaps
the only rationale is that it provides access to more seats than
straight award travel at the "fat chance" level.

What's going on, of course, is a belated recognition by the big
airlines that they've created a monster. They've showered us with miles
--many sold for fat profits to banks and other third parties--then made
it almost impossible for us to use those miles.

What the airlines should do is fulfill their implicit promises for
adequate numbers of award seats at "fat chance" levels. For now,
however, that's a "fat chance" outcome.