Delta’s Decision on Frequent Flier Miles an Awful Decision

To understand what a real slap in the face Delta Air Lines just delivered to many of its customers – the decision to no longer award frequent flier miles to customers who purchase Basic Economy tickets, the cheapest fare – one must first appreciate a bit of historical context.

The airlines did not invent loyalty programs.

But they did perfect them.

There is a precedent of businesses putting programs in place to not only reward and keep their current customers but also to entice new ones. For those of a certain age, S&H Green Stamps date back to 1896 but gained most of their popularity in the 1950s through the 1970s. Store merchants would reward them to patrons for customer loyalty, and a certain amount of stamps could be used to purchase items for little to no cost.

For those of a younger age, cutting the top off a cereal box or a Betty Crocker box when it was finished could be used to save up for freebies or, more likely, to help your school defray education expenses for playground equipment and the like.

Today, you have loyalty programs for just about anything and everything, ranging from CVS pharmacies to supermarkets to Best Buy and more.

But the airlines, well, the airlines enhanced the whole idea and did it right. In 1981, American Airlines came up with the idea that led to its AAdvantage Program. Buy a plane ticket on American, join the program, and start reaping a point per mile flown. Fly 350 miles from New York to Pittsburgh, get 350 points. Fly 2,500 miles from Miami to Los Angeles, get 2,500 points. Accumulate your points, and then check American’s mileage charts to see how many points you need for a free flight somewhere depending on length.

It was brilliant.

Of course, it has changed over the years. Tiered levels of program loyalty were introduced, and the structure of accumulating points was changed to give the airlines the benefit. And, to be fair, credit cards and the ability to earn points by staying at an affiliated hotel or renting a car with a partner company was an advantage to the customer.

When such programs die out it’s because the customers no longer find them viable. There are no more S&H Green Stamps; Betty Crocker discontinued its box top program.

Unfortunately, Delta decided to make that choice for the consumer because it’s no longer viable – the airline might call it ‘fair’ – to the carrier or its higher-paying customers.

It’s bad enough that Delta and other airlines have for years now started charging ancillary fees such as for baggage or for overweight luggage. But with the advent of Basic Economy fare pricing, air travelers are now penalized for picking the cheapest fare by not being allowed to bring a carry-on bag, or having families split up because you must pay extra to select your seats.

Isn’t giving up such amenities enough of a penalty?

So why the added insult of no longer being able to collect frequent flier miles?

I have written this before – with all these new streams of revenue, the airlines have created a caste system of the haves and have nots. Rich folk in the front, don’t forget to order off the menu; cheapskates in the back, and you better grab a sandwich to go in the gate area if you want (good) food on the plane.

I have also written this before – the airlines are copycats. If one has a fare sale, the others typically follow. If one offers new onboard concepts, others follow. But this might be the one time they don’t.

This might be the one time where fellow airlines go the other way and use it against Delta to try to build a following. It will probably only work at the biggest airports where there is more airline choice, but it’s definitely worth watching because this decision by Delta is capricious and, frankly, a bit of a gamble.

Delta is banking on Basic Economy fares going mostly to infrequent travelers, who either don’t travel enough to bank miles or don’t care enough to accumulate miles through sister programs at hotels or signing up for affiliated credit cards.

Maybe the carrier doesn't see it as risky. Most assuredly, Delta did its research on this. But the risk is that it’s perceived poorly by much of the flying public and could be a public relations nightmare.

No matter what, it’s still nonetheless a slap in the face.