airplaneA recent issue that’s gotten lots of attention is a change that Delta Airlines made to its SkyMiles frequent flyer program. When you flew on Delta in the past, as on other airlines, you got credit for the mileage flown, regardless of the ticket cost. Starting on January 1, 2015, Delta flyers will earn miles on the basis of the cost of the ticket. A more expensive ticket, such as a business class ticket to Europe, gets about four times as many miles as the same coach fare and about eight times as many miles as would currently be earned. Superficially, this makes sense: People who pay more should be rewarded more. This creates a very strong incentive to purchase a more expensive ticket just to earn more miles. There’s always been some incentive to buy a more expensive ticket on a favored airline just to earn the extra miles, but this makes the issue much bigger. As the CEO of a small company, it means that I’ll have to pay more attention to where my employees are purchasing their tickets, because Delta tickets are now more likely to encourage abuse. Our clients pay for a majority of our travel expenses. As a result, we promise them—and it’s often written into their contracts with us—that we’ll travel on the least expensive fare, subject to reasonable schedule and business requirements. Now I’ll expect them to scrutinize Delta tickets more than ones without this inflationary incentive. I believe that business travelers will have to provide more justification for a ticket booked with Delta, which will discourage people from flying with Delta. And, in the search and justification process, I suspect that people will find better fares elsewhere. Based on price and schedule, Delta isn’t much different than United, American, or any other major airline. So why would anyone continue to fly Delta when the rewards for being a frugal business traveler are cut in half? I think the revamped SkyMiles program, which really degrades the value of the middle-class flyer in favor of wealthy flyers, will result in a sharp decrease in Delta’s revenues. It’s just poor leadership.]]>

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