Unrewarding Changes at Delta

By Matt Swenson, March 11, 2015

What do Delta Airlines and Vladmir Putin have in common?

“They’re street thugs,” says Joe Brancatelli, a travel industry watchdog who operates the website Joesentme.com.

The strong words and harsh comparison to the Russian president come as the Atlanta-based air carrier is bombarded with criticism related to changes in its SkyMiles rewards program.

The basics begin with a change in philosophy to reward travelers based on the money they spend versus the number of miles they fly, a strategy already adopted by competitors United and Southwest Airlines (American and Alaska Airlines’ plans are still miles-based). In theory, the switch favors business travelers who purchase premium seats while average fliers used to racking up frequent flyer points in coach will not see much benefit other than getting from point A to point B.

So far, so good, says Brancatelli, a frequent business traveler who agrees the more a customer spends, the more he or she should feel the love from a company. The problem, he says, comes with the practices coinciding with Delta’s implantation of the new plan on Jan. 1. These include lessening the value of rewards earned, doing away with its awards chart in favor of the airlines’ often-broken awards calendar and a 21-day advance reservation restriction on its lowest-priced perks.

“If you are the person who gives the most money to Delta on a ticket, you’ll still earn fewer miles than you earned last year,” says Brancatelli. “There’s all kind of indications that this airline does not care about loyalty.”

Delta spokesperson Anthony Black took exception to the characterization, noting improved services on board flights like Wi-Fi and that passengers can now upgrade for free when seats are available. In March, the airline adjusted the SkyMiles program, allowing travelers to use 10,000 accrued miles toward one-way ticketing.

Those steps may not be enough to offset the previous damage.

Jaki Baskow, founder and CEO of Baskow & Associates, says she’s noticed airlines nickel-and-diming customers in many aspects of travel, including rewards programs. From limiting rewards for frequent fliers to extra fees, the cost of flying is becoming prohibitive, says the veteran meeting planner.

“They are just hurting themselves,” says Baskow, who says some of her higher-end corporate clients are choosing to fly coach rather than pay much more for business class or first class to earn more loyalty points because it’s not worth it.

That’s a smart choice, says Brancatelli, advising travelers to choose an airline based on basics like ticket prices and comfort instead of on loyalty programs.

The reality, he says, is that Baskow and other frequent fliers struggling to use their earned rewards are not going to get better treatment from the airlines after the U.S. Supreme Court unanimously ruled this year that Delta was not obligated to deal with customers in good faith or fairly under current law. The court’s decision has essentially told Delta to “do whatever you want,” says Brancatelli.

The Ginsberg Ruling

In a decision now known as the “Ginsberg ruling”—named after Binyomin Ginsberg, a rabbi who was stripped of his frequent flier miles and membership after frequent service complaints to Northwest Airlines (now part of Delta) in 2011—the U.S. Supreme Court said Delta and other airlines are not obligated to treat customers fairly. That’s because the laws regulating the airlines say states have no jurisdiction to mandate good-faith procedures, and there is no such rule on the Federal books, says travel expert Joe Brancatelli. “It’s almost like a bank saying, ‘We don’t like you as a customer, so we’re taking away your money,’” says Brancatelli of the case. “I’ve never heard of anything like that.” Brancatelli says this ruling is behind many of the airlines’ changes that are not customer friendly.

Related Post: Southwest Airlines Courts Atlanta

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