Did time just stop? For some of us, perhaps. I’m speaking, of course, about yesterday’s announcement from Delta Air Lines about changes to its SkyMiles program coming in 2015. I can’t say I’m surprised. You might remember a couple of pieces from me revolving around the idea that the dog is finally starting to wag the tail, and not the other way around. Whenever I hear that airline frequent flyer programs are profitable on their own, a fact that is no doubt true to a point, I’m reminded of a saying we used to have during my airline manager days when we were under the hammer to cut costs – Think about how much money we could save if we just stopped flying airplanes.
It was easy to become addicted to an industry living “paycheck to paycheck” with a short term focus. In the end, we wound up with too many miles chasing too few seats. Capacity discipline and managing real businesses for real profit have brought us here. However, we didn’t create the system, the airlines did, and they own part of the blame for where we are. That said, things were bound to change, and now they have.
While I’m not surprised Delta moved forward with the inevitable, in truth, I have no idea if the program they introduced on Wednesday is exactly where things are headed. Will this spread to the remaining big airlines? Ultimately, I think the answer to that is yes though there is room for each airline to put its own stamp on things. Southwest, which carries more domestic passengers than any other airline by the way, made the move and last time I checked they still had customers. I think it’s not a matter of if, but when the others move forward with some level of change.
Without a doubt, this was a big move by Delta. Risky? Indeed. Only time will tell if it works. Here’s a question for you? With a move this big, how would you undo it if you wanted to? No matter what airline you fly, it is not likely that your loyalty program remains untouched forever by Delta’s latest move. Maybe that was the point.
-MJ, February 27, 2014