Reader John Delta left the following comment on the “Ask Lucky” page of the blog last week:
lucky,
Well, you probably have guessed that I am bailing on Delta after more than 4 decades with them. Like you (were), I am Washington resident and am asking you where should I begin to place my loyalties and get a sizeable jumpstart on my new loyalty program? I have not signed up with DELTA’s Washington resident bonus program, but might consider that for 2014…and sure am interested in the possible benefits of the “Battle in Seattle.”
Should I go with Alaska, United, American (US Airways), or simply go with a credit card loyalty program (SPG, HHonors, Ink, or?) With all the rapid changes, I need to find a new, stable place to put my loyalties and efforts to maximize our rewards. American Express is our current card…but I am open to any suggestions for a new home for us as well (referring to your newly upcoming nomadic lifestyle.
There’s no doubt that the airlines have made it really, really hard to be loyal the past few years. And the challenge isn’t specific to one airline, but rather the industry as a whole.
When the airline industry is losing billions of dollars they’ll do anything to keep customers. When they’re making billions of dollars, loyalty is about as important to them as to someone that spends hours a day trolling the personal ads section on Craigslist (“but I was just looking…!”).
If an airline makes changes you don’t like, the good news is that in most cases another airline will match your status. The issue in this case is that we’re kind of out of good options. And there’s a huge switching cost to changing airline loyalty.
Delta SkyMiles actually is really lucrative in this case
Looking at John’s situation specifically, he’s presently loyal to Delta, and living in Washington there has never been a better time to be loyal to Delta. Delta is offering residents of Washington state double redeemable and elite qualifying miles through the end of the year on all routes to/from Seattle.
That’s ridiculously lucrative, and means that as a Diamond member you’re earning 325% redeemable miles and 200% elite qualifying miles for all your flying. 62,500 flown miles gets you qualified for Diamond. The big “catch” here is that you’ll be requalifying for status in a program which will be revenue based next year.
On one hand Diamond status is valuable — this year for the first time Delta added actually useful international upgrades. And Delta status has always been valuable for someone that primarily flies domestically. But you’re earning Diamond status in a program that will be substantially less rewarding next year if you fit the profile of the “average” traveler.
There are no “safe” options to switch to
When Delta and Northwest first merged, it was easy to switch to American and United since their programs seemed pretty “stable” at the time. Then United and Continental merged, and it seemed pretty “stable” to switch to American at that point. Now American and US Airways are merging, and all bets on stability seem off.
So living in Washington state, you know exactly what you’re getting into with Delta this year. You get lots of rewards this year in a program that won’t be nearly as rewarding next year. But the alternative is a program like American, which, all things considered is still very rewarding, though likely won’t be as rewarding next year.
A bird in the hand is worth two in the bush, right?
There’s a cost to switching loyalty
While I’d like to think status matching is seamless, it’s not. There’s ultimately a huge cost to switching loyalty. You often have to complete a challenge, you have to learn a new system, you’ll get less value out of your existing miles with the other airline eventually (since you won’t have fee changes when redeeming those miles), and ultimately it’s often “once in a lifetime” (whatever that means nowadays given the rate at which the industry is changing).
Avoid being loyal if you can
Nowadays the question shouldn’t be which airline you should be loyal to, but rather whether you should be loyal to an airline. As I wrote about last week, loyalty might be overrated but miles most definitely aren’t. It’s easier than ever before to earn miles, just not through actually flying.
At the end of the day you can get entry level elite benefits with most airlines just for having their co-branded credit card. If you fly mostly internationally you should be able to come out ahead by strategically buying miles when there are sales, and in turn redeem those miles for international travel.
Bottom line
Being loyal has never been less rewarding. And not only are there fewer rewards for being loyal than ever before, but there’s also more uncertainty. So I tend to think more than in the past it’s either worth being loyal on a “year to year” basis since there’s no long term certainty, or doing what you can to be a “free agent” and simply accrue miles through other means.
At the end of the day the most stability you’ll get with miles or points is “investing” in currencies like Chase Ultimate Rewards, American Express Membership Rewards, or Starwood Preferred Guest. They’re far from devaluation-proof, but given that they all have many transfer partners, you’re at least hedging your bets somewhat.
My new strategy is SPG and credit to Alaska (even though I live in NYC).
Loyalty programs were created a long time ago when people chosen airlines they fly based on previous experience. This is what is happening now with many European and now especially with Asian and Middle East carriers.
US airlines on the other hand know that they have to be price competitive. I work for the employer where we have a search engine that does not allow us to book if there is cheaper air fare...
Loyalty programs were created a long time ago when people chosen airlines they fly based on previous experience. This is what is happening now with many European and now especially with Asian and Middle East carriers.
US airlines on the other hand know that they have to be price competitive. I work for the employer where we have a search engine that does not allow us to book if there is cheaper air fare available. Many companies have same rules.(majority of business class seats are taken by business passengers)
And for majority people who are flying economy, when they search for the flight they go to kayak.com and search for cheapest airfare, therefore its not surprising for airlines slowly remove loyalty in order to keep their cost low to get more passengers.
@Derek,
That is exactly what I am planning. I have spoken with lucky regarding my mileage run plan to get DELTA Gold Status (through their bonuses and CC offers) and immediately go for status match with two specific airlines that would serve us well in the Pacific NW.
My advice would be for John to re-qualify for elite status for next year, then status match with whatever airline he fancies. Since it's so easy for him to get status this year as a Washington resident, that's a no brainer to me -- he can do status matches and "sample" the other flavors next year, then decide if he wants to jump ship or stay.
I go along with Anthony's comments. If you have to fly for a living there are large advantages for being "loyal" to one airline. Forgetting about miles but just the perks that you get along with better customer service makes a difference.
I'm pretty novice when it comes to airline miles/rewards but the one thing I've learned early on is to not be loyal to any particular airline program. What I prefer instead is having a miles/rewards card that I can use for travel in general.
For example, I have a Discover Miles card that has a $0 annual fee but only accrues 1x miles for every dollar spent on it. I also just signed up for...
I'm pretty novice when it comes to airline miles/rewards but the one thing I've learned early on is to not be loyal to any particular airline program. What I prefer instead is having a miles/rewards card that I can use for travel in general.
For example, I have a Discover Miles card that has a $0 annual fee but only accrues 1x miles for every dollar spent on it. I also just signed up for the American Express Premiere Rewards gold card that accrues points much faster than that but does have an annual fee.
Point is that using a card that accrues points you can use on travel in general is better in my opinion than being loyal to specific programs. The points I can earn on either card can be used on airlines/hotels/rental cars and other travel needs as well as being used to shop at certain sites like amazon.com overstock.com etc.
Just for some context - I travel a relatively low amount (25,000 miles) domestically for business. I was a Delta Silver last year but just missed for 2014. Even though Silver is a meager perk, it is still meaningfully better traveling with status domestically than it is not. I've noticed not having those perks this year. Is it enough to make me consolidate travel? Maybe not at Silver. But if were closer to Gold territory,...
Just for some context - I travel a relatively low amount (25,000 miles) domestically for business. I was a Delta Silver last year but just missed for 2014. Even though Silver is a meager perk, it is still meaningfully better traveling with status domestically than it is not. I've noticed not having those perks this year. Is it enough to make me consolidate travel? Maybe not at Silver. But if were closer to Gold territory, I would absolutely go for status (either on Delta or American)
Some people have to fly for work. Loyalty may make that experience easier.
I would caution against statements that loyalty doesn't matter. It all depends on what type of customer you are.
If you are a customer that earns most miles through credit card spending or sign ups and is interested primarily in redeeming miles for international travel in premium cabins, this may be right.
A large number of customers earn the majority of miles via actual flying and use the miles they earn to fund trips....
I would caution against statements that loyalty doesn't matter. It all depends on what type of customer you are.
If you are a customer that earns most miles through credit card spending or sign ups and is interested primarily in redeeming miles for international travel in premium cabins, this may be right.
A large number of customers earn the majority of miles via actual flying and use the miles they earn to fund trips. Most of my flying is purchased via a corporate card (no points for spending). I know fliers that fly hundreds of thousands of miles annually in this category. For them, loyalty is meaningful as it can get them premium security, boarding, lounge access, etc. In this case, how miles are earned by flying are critically important. These customers may value elite status more than everything else and more or less give away miles (in the form of trips) to friends and family.
Fliers with the ability to gain elite status and value those perks should seriously consider being "loyal" enough to an airline to gain that status.
A very level-headed approach to a tough question. Thanks, Lucky.
My issue with respect to loyalty is -not- miles; I rarely use them, because "free" tickets don't accrue Qualifying miles. My interest is primarily airport handling (premium checkin, security and boarding)and upgrades (which,since my primary use of DL is on transcon flightsn is pretty much gone.)
Absolutely agree. My husband and I both are Lifetime United Premier Gold (having flown 1 million miles each). We still fly United on paid tickets domestically when the routing is best and the price is comparable to that which we can find elsewhere--since we automatically get free EconomyPlus seating and priority check-in and 2 free checked bags. When the routing isn't great or the United price is too high, we use Chase UR points, BA...
Absolutely agree. My husband and I both are Lifetime United Premier Gold (having flown 1 million miles each). We still fly United on paid tickets domestically when the routing is best and the price is comparable to that which we can find elsewhere--since we automatically get free EconomyPlus seating and priority check-in and 2 free checked bags. When the routing isn't great or the United price is too high, we use Chase UR points, BA Avios, SPG points, or Amex Membership rewards points to get tickets on another carrier, preferably in Business or First. For all international tickets, we use points almost exclusively for Business/First on whatever carrier has the best routing and concomitant quality. We both own businesses and rack up points using credit cards (SPG Amex, Chase Sapphire and Ink Plus, Amex Platinum mostly, but also Alaska Visa and Lufthansa Visa). I even paid all my taxes using Chase Sapphire and Lufthansa cards so I'd get more miles, since we want to get Business/First international tickets and the cost of paying taxes with credit cards is still much less than the comparable cost of buying those tickets.
I agree with the post. FWIW, if John is at least SPG Gold and Silver Medallion, he can get crossover rewards (1 Starpoint for every dollar spent on Delta flight and 1 mile for every dollar spend on Starwood hotels).