When the milk dries up, you have to give away the cow (er, what?) Delta status giveaways!

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from flyertalk delta giving away medallion status

This is rather telling to me. There is a new thread on FlyerTalk about Delta starting to, without request from a flyer, just “giving” status to folks who have flown Delta in the past but now no longer are. This, and other such status type gifts by Delta, are interesting on a whole bunch of levels and here is why.

First off, this tells me that Delta is losing elite flyers to other airlines. And why do you think that is (I think we all know why)? Other than United, that has, if possible, an even worse frequent flyer program than Delta, just about every other airline has a better award program than Delta has right now. Delta seems to be trying to compete with Southwest on the penny value scale but the issue here is Delta is not an all coach airline and does not offer free bags or free ticket changes and more! They will not win it this way.

Next point of note is why giveaway status to begin with. Well, now that SkyMiles are worth so much less than they were before (not really worthless but just not what they were before) then you have to give away what is truly valuable, that is, status. Thus my Midwest farm reference, that is, when the milk is drying up (a.k.a. SkyMiles) you just have to give away the cow because that is all you have left (that is status with Delta) .

Then we have they further point that is why, if jets are so full, bother with gifting status. This one is simple too when you think about it. Capacity is growing and prices are dropping (just slowly but still I think we will see more of this). One big factor is those who have any level of status tend to pay more, in general, compared to a leisure traveler. Plus, lower ranked Silver and Gold Medallion elites are often more willing to pay for up-sells to 1st class (since they get so few free upgrades) compared to Platinums and Diamonds Medallions.

Lastly we have the really big issue that is the cost to win back a lost customer. This can be really expensive for any business. It is much cheaper to retain a customer than to have to acquire a new one or especially to win back a disgruntled one. Again, when you have to win back you have to do something BIG and that is give them the cow as sour milk may be the reason they left in the fist place and just offering them a bonus of what they do not want will not work.

Really the most fascinating part of all of this is to look at what is next. Personally I think the glory days of insane profits for the airlines will end in the near future. Competition will impact prices especially internationally. I think some airlines may be smart enough not to destroy their award programs. As things start to change on the profit side for the airlines, and banks keep stepping up their pressure to flyers to use their award currency, something has to give somewhere. An award program is, after all, a loyalty program and as Delta has told us so many times in the past that it really does go both ways! – René

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  1. Ha. Ha. Ha. Are they finally reaping what they sowed?

    I actually did care about status. I really valued the unlimited domestic upgrades and other perks.

    As for SkyMiles, I never cared about reward tickets so much as upgrades. I valued using miles for upgrades to Business Elite (all the more valuable on a 12 hour flight). I can’t remember when I stopped flying Delta now. Year before last, I think? Have they since devalued miles for upgrades, too?

  2. Just read the thread on FT. Silver Status is hardly worth anything these days, no?

  3. Umm, exactly how does United have an even worse program than Delta? Is it the award charts that United still makes available? Ability to redeem for international first class? Cheaper (in some cases much cheaper) redemptions on United metal? Generally better availability on long-haul routes? Functioning website and award search? Vastly better alliance partners? Ability to use systemwide upgrades on more than just the three highest coach fares buckets?

  4. And no fuel surcharges regardless of where you originate? Because it totally makes sense that if you fly from Europe to the U.S. rather than the other way around then you should have to pay hundreds of dollars more just for the privilege of using the miles you already earned?

  5. Diamonds still get complimentary upgrades? Really? I think I’ve gotten maybe two this year so far across 20 segments. Back in the glory days, my odds ran about 98%.

    I love this blog post. You are spot on. Milk is sour, so here – have the cow instead. Maybe this foretells the end of erosion in SkyRubles value and, fingers crossed, maybe restoration of the former FF program.

  6. Marriott does the same thing I have had Platinum status for years even though I barely stay 20 nights and spend many more nights elsewhere.

    Basically the program has turned into more of a marketing program than a loyalty program. The line was always somewhat blurred, but now there isn’t one really. They don’t show you much loyalty and you don’t show them much either. If you can demonstrate value to them they will court your business. And that’s just great, no need to be so into one airline, this way you can fly other carriers too!

  7. Yet more dilution of the program by management. Nothing annoys me more than the giving away of status, especially after I’ve earned almost 28K MQM from flying this year.

    I know you won’t agree with all of this René, but I think that Delta should get rid of Amex MQM spend and MQM signup bonuses. Status should only be earned from butt in seat miles. If status is truly meant to reward loyalty, then it should only be derived from such.

    Of course this won’t happen, but I would also like to see a limiting (or elimination) of points transfers from credit cards. One of the biggest reasons for devaluations, IMO, is the flood of miles from sources other than flying. Carrier-branded cards are probably here to stay, but there needs to be some limitations on the ability to transfer in vast amounts of points and get award tickets without ever having to fly on a carrier. The original idea behind frequent flyer programs was to encourage loyalty to one carrier. If the program can be used by those who never actually fly a mile, however, then who does it really reward, especially when massive devaluations are the end result? I get that the carriers make money by selling miles, but like any currency, inflation occurs when too many miles are chasing few award seats.

    I could be way off here, but my opinion seems to fit with the facts.

  8. I was just with a bunch of colleagues that are mostly DMs on Delta or 1k United flyers. We were reminiscing about how we all used to do anything to avoid flying Southwest. Now the consensus seems to be that Southwest is the best airline experience for those without elite status.

  9. *** FYI *** Just returned from 12 days in Maui, HI. Purchased first class from both Hawaiian and Delta. So we checked in at Hawaiian Airlines on Maui (OGG). Both The Gate Agent and his Supervisor double down and WOULD NOT TRANSFER OUR FIRST CLASS LUGGAGE FROM HAWAIIAN AIR IN HNL TO OUR FIRST CLASS ON DELTA……..So we had to collect our luggage from Hawaiian inter island Lobby #3 to haul over to Delta’s Lobby #7. Then go thru both screenings again. I thought they both were code share? Please be careful of this new enforcement from Hawaiian Airlines. While Delta was more than happy to check our luggage from IND thru HNL and then on to Maui OGG on Hawaiian Air.

  10. Sounds like delta is copying the cable company’s now. Nothing irritates me more than when my one year contract is up the cable company jacks my rates to obscene levels at just about the time I see a tv commercial touting how cheap a package is for new sign ups. Treat me like the long time customer that I am and reward me before you reward the new guy. P.S. I couldn’t agree more with William!

  11. Interesting that orig poster lists status as DL PM in his profile yet talking about being granted FO…

  12. @Mr. H – Likely was PM and jumped ship for another airline and never removed from FT profile. Happens all the time.

  13. I was PM last year but moved to American. It kind of is useless, however wouldn’t mind grabbing it again in case I do fly DL.

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