Looks like most Delta customers will start earning less miles for the miles their fly come 2015.
The airline announced a fundamental change in its SkyMiles program: earning miles based on airfare rather than miles flown, and it’s not meant to impact everyone in the same way. In many cases, it’s a substantial reduction in the number of miles in your account.
In essence, it’s a deal for the rich to already get richer. Ninety-nine percenters beware: in essence, the new program is punishment for scoring a great deal on a long-haul flight.
In the past, a roundtrip flight from New York to Los Angles would earn 5,617 miles, whether you paid $450 or $800. Beginning Jan. 1, 2015 that same flight will earn 2,250 or 4,000 miles, respectively, as Delta will offer five SkyMile points for every dollar spent and an extra two if purchased with a Delta American Express. Either way, you lose, but the savvy traveler is set to lose more, especially on long distances.
The concept isn’t entirely new. JetBlue, Southwest Airlines and Virgin America already have a similar fare-based award program in place. But, Delta is the first airline of its size to implement this type of program, and it’ll be interesting to see if United and American soon follow suit.
“In the past, everyone got the same miles, no matter what they paid,” said Katrina Roberts, CookTravel.net’s New Zealand specialist. “It’s the airline’s way of rewarding their high-paying customer. I don’t think it’s fair.”
Redeeming the miles will be different too. The traditional three-level chart (Saver, Standard, Peak) will morph into five levels, to be revealed in the fall. While the positive additions include no black-out dates, award ticket search and shopping at delta.com, and new one-way awards and miles + cash award options, there’s still some disparity on who the real losers and winners are. MileCards.com crunched the numbers and found out:
The biggest losers
Travelers who fly the lowest fares earn less, and those who fly the furthest lose more.
-Business flyers who pay anything but the highest coach fares on flights about 1,500 to 2,500 each way (think: flying to and from the Midwest to either coast) will earn about half as many miles as before.
-Leisure flyers – the lowest advance coach fares will earn fewer miles on all but the shortest flights.
-International flyers who average flights of 5,000 miles each way or longer using typical coach fares will earn about one third less than before – even less on further flights.
- First Class flyers who fly on sub-$800 first class fares on medium to long flights within the U.S. will earn about one third less.
-Mileage runners are pretty much obsolete, as there’s no reason to fly longer distances just to earn mile unless the Medallion status (and its perks) are that important to you.
-There won’t be a revenue-based earn for partner airline travelers, and they’ll earn less than before. Their fate is uncertain until Delta releases the new award chart in the fall.
The biggest winners
Generally, if your airfare divided by miles flown is greater than 0.2, you’ll earn more miles under the new system.
-Flyers who fly short distances frequently can earn up to twice as much on 500-mile flights at typical fares.
-Customers who buy unrestricted (more expensive) fares or tend to fly on nearly sold-out flights at the last minute.
-International and coast-to-coast business class flyers will benefit the most, especially when they book short notice.
In the middle
-People who earn miles primarily via credit card spend won’t see much of a change, and it appears the new five-tier award chart will still feature some of the old awards. The 25,000 miles for an entry-level coach ticket will remain intact, and Delta promises better award availability. The number of miles required for some awards may not change much on average, but the award price of many business class international flights will move up a great deal.
When American Airlines created the frequent flier program in 1981, they wanted to reward their best 150,000 customers in secret, looking to avoid the likes of the “great unwashed.” Now more than three decades later, Delta is trying to do the same, and the program change leaves little incentive to fly with them.
The takeaway: the concept of miles is fading away, so buy your flights based on price alone, not loyalty, because loyalty won’t earn you much in the future travel industry.
You may think you’re a smart traveler, but think again.
All it takes is one forgotten passport, flat tire or missed connection to strip that precious badge of honor away.
Christopher Elliot’s new book, How to Be the World’s Smartest Traveler (and Save Time, Money and Hassle) explores the wacky travel industry and how to navigate it, before you lose your mind.
Here are the five most helpful tips to avoid a trip-ending calamity:
Travel for all the right reasons.
Want to pack the family in the minivan for a few days of hard-earned rest? Going from point “A” to point “B” on a business trip? These are some of the “right” reasons to rent a car, get on a train or board a bus. Traveling just for the miles or because someone offered you something “free”? Don’t do go down that terrible road, because it often leads to madness and unexpected expenses.
Don’t let money ruin your trip.
Sure, travelers are often blind-sided by unexpected bills, and you often spend more than your budget on vacation. But, say you booked a vacation package to Disney World for $7,000, and the next day you discover that prices were slashed by 35 percent. You can always contact customer service and try for a refund, but your best bet is to let it go. Once you book an airline ticket or cruise vacation, try to not check back to see if the price went down. You’ll only drive yourself crazy.
For goodness sake, read the fine print.
The devil is in the details of the teeny tiny print, often hiding a multitude of sins. Don’t simply ignore the terms and conditions, thinking it’ll be fine in the end, and the more complicated the product, the greater the chance the fine print will cause a problem. For example, travel insure will often cover an airline change fee with a doctor’s note, but did you know that some policies, like Allianz travel, do not allow the doctor to be a family member? Little details can end up costing a whole lot.
Find a good credit card and use it.
Cash is usually kind, but your travel investment will be best protected with a credit card and a reliable dispute-resolution department. Applying for credit cards for the wrong reasons (collecting loyalty points or getting airport lounge access) often come with an annual fee and high interest rates. The real value of a credit card comes when you’ve made a travel purchase that didn’t work out the way you expected or need to buy something in another currency without getting slapped with a multitude of charges. Also, beware of wiring your money anywhere, as your money could be as good as gone.
Plan for the worst but hope for the best.
Simply planning can alleviate more than 90 percent of all travel problems. Make sure you pack the right luggage, make sure your passport and visa are up-to-date, call ahead to confirm your flights and hotel room, and if necessary, make sure you have all of your shots.
Everyone’s made a one of these mistakes, whether it was missing a connection, boarding the wrong train or getting duped by the fine print. The good part is you’ll be a wiser traveler from learning your mistakes, and you’ll have a great trip if you heed Elliot’s advice.
“Nothing is true about airlines” is a mantra used often by avid travelers, especially in these days of receiving the bare minimum in service.
Fares are up.
Well, duh. Anyone who’s flown in the recent future can tell you that. But, the average domestic airfare went up 5.1 percent (from $390 to $371) since the third-quarter of 2012, and fares adjusted for inflation were the highest since 2003.
Fares are down.
You’re probably thinking, “Huh?” You may want to blame the de-bundling debacle for this one. Average fares dropped 1.9 percent in the three-year period between 2010 and 2013. Last year’s third quarter yielded an average fare of $390, down 14 percent from $453 in 2000. Compare the 14 percent fare decline with a 34.8 percent increase in overall consumer prices.
United Airlines charges the most.
United Airlines controls three of the five airports with the highest average fares in the nation, with Newark at $491, Washington Dulles at $506 and Houston Bush Intercontinental at $507. But, the priciest airport in the country is still Huntsville, Alabama, where passengers pay an average of $559 due to AirTran Airways’ departure.
Delta does Atlanta.
The majority of America’s busiest airport is controlled by Delta Air Lines (68.3 percent), and Atlantans are paying dearly for the privilege – an average of $432, up 22.6 percent since 2012. Fares are also rising quickly in Colorado Springs (20.4 percent), New York’s White Plains (15.8 percent) and Florida’s Fort Myers (15.1 percent).
Which airport has the nation’s lowest average fare, you ask? That title goes to New Jersey gambling town Atlantic City, where the average fare in 2013 was $157. But don’t let the uncharacteristically low fare fool you: the price is still up 16.5 percent year over year, which makes Atlantic City the third highest price increase in the nation.
Let’s get small.
The smaller cities are what saw the largest average fare decreases. Prices in Bellingham, Washington declined by 16.4 percent; Charleston, South Carolina dropped 8.1 percent; Providence, Rhode Island dropped 6.7 percent; Burlington, Vermont; and 3.2 percent in Manchester, New Hampshire. Charleston’s price-drop can be attributed to the arrival of JetBlue Airlines, while Southwest dominates Manchester (60 percent) and Providence (50 percent), and low-cost carriers Allegiant, Frontier and Sun Country serve Bellingham.
Our place in fare history.
When the BTS started compiling price data in 1995, it listed the average fare as $439, meaning airfares have remained fairly low compared to prices in the last 20 years. Currently, we’re down 11.2 percent with the current average fare of $390. During the same time, the general inflation rate was 52.87 percent, according to the BTS reading of the Consumer Price Index.
Is it possible for the fares to be down even though the national inflation rate soared? Absolutely. Consider that the “average” fare still includes leisure travelers who occasionally score a $69 fare to Florida. But be weary: comparing quality of fares from 1995 to 2013 is the same apple-and-oranges argument.
Think about it: in 1995, airfare included two or three checked bags with a hefty weight limit, seat assignments, by-your-row boarding privileges, a full meal, better service— the list goes on. Everyone knows the modern unbundling scheme, forcing you to pay for your seat of choice and early boarding, and fees like changing a nonrefundable ticket, which have soared to a whopping $200 on more domestic flights. Finally, the seat you’re buying today is probably much narrower with less legroom and located on a much smaller and more uncomfortable aircraft than in 1995.
Mileage Plus? Try Mileage Minus.
Or that’s what it should be called after United Airlines devalues its points starting Feb. 1, perhaps the most dreaded day of airline travel in 2014.
The price of a free airline ticket is going up — way up — 10 to 85 percent for premium air travel. But how can something free become more expensive?
As it turns out, award tickets aren’t free to begin with. Right now, each United MileagePlus point is worth about 5 cents when used to purchase a Business-Class upgrade on international flights, according to a study published in July by IdeaWorks Co. Business Class to Europe will increase by about 20 percent, and First Class on partner airlines to Europe and Japan will climb about 63 percent and a whopping 87 percent to the Middle East.
The good news is there’s a way to beat the system:
1. Get your award ticket by tomorrow and it’ll be valid one year from the issue date. This allows you to extend the validity of the current chart for almost a year. Note that you won’t be able to change your specific routing, connecting airport, reward type or class of service. So make sure you book an itinerary that you actually foresee using.
2. You’re free to cancel the flight, say, one week later. BUT DON’T CANCEL THE AWARD.
3. As soon as you lock down the dates you want to fly, search for availability and rebook using the same, original ticket. As long as you look for the same route and cabin, you’ll incur no mileage increase. But beware: if you guess wrong, you’ll be slapped with a $150 fee per ticket, unless you have top United elite status, in which case fees will be waived.
Still strapped for ideas on how to use your awards?
1. Lufthansa First Class: It’s one of the nicest products in the sky, and the seat morphs into both a recliner and bed. The awards cost about 67,500 miles each way, but starting Saturday it’ll be more like 110,000! Lufthansa awards can be tricky, but it’s completely worth it if you can muster the patience.
2. South African Airways Business Class: South Africa is a wonderful, beautiful place, but it can be a hassle to get there. South African Airlines flies non-stop to Johannesburg from Washington Dulles and New York, which sure beats flying to Europe and then an additional 11 hours to South Africa. The redemption will cost 60,000 miles each way, but it’ll raise to about 80,000 each way come Saturday.
3. EVA Royal Laurel Class to Taipei and Beyond: experience the much-touted Royal Laurel business class to North Asia for about 60,000 miles each way, but will jump to 80,000 miles on Saturday. Just be sure you’re on the new 777-300ER for the Royal experience.
4. ANA First Class Square Suites: Flying to Tokyo? A mere 67,500 miles will get you there from New York, compared to 110,000 miles after Saturday. It can be hard to find availability on the 777-300s, which feature the new First Class Suites, so be prepared to have your work cut out for you.
5. Singapore Airline to the Maldives: You can search Singapore award space on United.com, and Singapore is very tight on premium award space for partners, but seats to the Maldives only cost 80,000 miles in Business Class right now and will cost a whopping 160,000 miles after Saturday.
6. United to Australia: It may be more fun to fly Virgin Australia and Qantas, but if you’ve got the miles, it’s worth it to book a trip to Australia on United. The good news is Business Class flights will only increase by 5,000 miles each way after Saturday.
7. Ethiopian Airlines 787: Try out the Washington Dulles to Addis Ababa flight, which takes 14 hours, on the newer, more comfortable planes. It’ll cost 60,000 miles each way now and 80,000 miles each way starting Saturday.
Just because United Airlines is devaluing your awards doesn’t mean you have to let them!
It seems New Years rituals are everywhere.
Colombians have grapes. Italians have lentils. Greeks have hanging onions.
But the airlines around the world celebrate a brand new year with brand new, higher fees. And with $27.1 billion collected in ancillary, or ‘junk’, fees last year, how can they resist?
Among the airlines imposing new fees is Virgin Atlantic, which will assess a $41 fee coach passengers wanting to secure a seat assignment more than 24 hours prior to takeoff beginning April 1. This type of new fee could lead the floodgates of European carriers beginning to charge for the first checked bag on trans-Atlantic flights – something they’ve been able to avoid for some time.
United Airlines wasted no time waiting for the new year and has already doubled its fee for oversized bags – to $200 – and also increased the fee for three or more checked bags from $100 to $125 each.
Spirit Airlines, infamous for its low fares and even lower service, raised its bag fees by $5 to $6 for people who pay during online check-in and $10 to $15 if purchased through Spirit’s reservations center. The “$9 Fare Club” passengers will also see a $1 increase in bag fees. But what did you expect from the airline that practically pioneered creative travel fees? Spirit will continue to charge $100 at the boarding gate for all carry-on bags and each checked bag.
Nearly every dollar in ancillary revenues trickles directly to the net income line on a carrier’s balance sheet, according to Businessweek. In the third quarter, U.S. airlines collected $879 million in baggage fees, $635.4 by Delta alone, and $735 million in ticket-change fees.
We’re sure the airlines will get more creative with ancillary fees in 2014 and the years to come, but here is a brief history of where it all started:
American Airlines began charging $8 for blankets in 2010. Hey, at least they’re clean and you get to keep them! But it gets worse…
Ryanair charges 40 pounds (about $66) to print your boarding pass. The airline also 10 pounds (or about $16) to sit in an exit row and $100 fee for carry-0n bags.
Spirit Airlines charges $8.99 to $16.99 for a “passenger usage fee,” or, in other words, an online booking fee, among their other ridiculous fares.
In March 2012, Southwest Airlines raised its ticket prices from $4 to $10 to offset the high cost of jet fuel. AirTran, United, Delta, American, US Airways, Frontier Airlines and Virgin America soon followed suit.
In April 2012, Allegiant Air announced a $35 fee for carry-on bags. It also charges $8 to pay with a credit card and $50 to book over the phone. Coincidently, Allegiant is one of the most profitable airlines in the United States.
As of January, Southwest allows passengers to be one of the first 15 people to board for a mere $40.
United began charging $9 for “Premier Access,” which allows expedited service through security and priority boarding. The catch? You must already be an elite member to participate. Guess elite status isn’t enough to obtain perks.
If this is what loyalty looks like in the 21st century, is it worth your hard-earned dollars to remain loyal to an airline?