In a major shift in its frequent flier program, Delta Air Lines announced earlier this year a fundamental change to the way it rewards passenger loyalty. Instead of tracking how far customers travel (mileage-based), starting in January 2015, the airline will instead base its rewards on ticket prices, combined with a passengers’ loyalty status with the airline.

According to Mintel’s Frequent Travel Programs – US 2013 report, only four in 10 (39%) agree that travelers can quickly build up enough loyalty points to redeem something of value – Delta’s move will likely see its leisure flyers feeling even less positive. Meanwhile, about seven in 10 (69%) agree that travelers often lose loyalty points because they don’t’ redeem them fast enough. To that end, Delta claims that it’s the only major US airline without mileage expiration.

Because loss of points is more of an issue to frequent travel programs members than time to accrue, maybe Delta’s new policy could actually fly. Members of airline loyalty programs are more positive than non-members are toward programs – but even so, cost is king: only about one in 10 (12%) think it’s worth paying more to book with their member airline.

Delta’s announcement clearly demonstrates that it is going after the more lucrative business travelers – who tend to pay a higher ticket price due to shorter lead times for booking and a greater tendency to spring for upgrades. According to travel loyalty expert Brian Kelly of ThePointsGuy.com, leisure travelers who look forward to building up to a free trip by collecting miles from one year’s vacation trip – with a few more miles picked up here and there from linked hotel programs – are pretty much lost in the new equation.

Leisure travelers are sure to take notice of their reduced rewards accrual and perception that “you have to be a business traveler to take full advantage of frequent flyer benefits” will likely increase – at least for those aware of Delta’s latest move. Meanwhile, travel program members are less than enthusiastic about frequent travel programs in general.

While low-cost carriers, JetBlue and Southwest have always used a price-based model to reward loyalty, Delta is the first of the majors to adopt the approach. It’s not unlikely that others may follow, since “me too” is a favorite corporate strategy in the airline business. However, Delta still needs passengers to fill its planes. If enough infrequent leisure travelers get onboard with other airlines, Delta could backtrack from its position because, while business travel is important, balance is necessary in the travel industry.

Fiona O’Donnell is a Senior Lifestyle and Leisure Analyst at Mintel. She specializes in consumer behavior, demographics, travel and green trends, and she uses her expertise to advise clients on marketing strategies and business decisions.

Foodservice Market

Our team of expert foodservice analysts combine exclusive consumer research with trustworthy market data to give you a 360-degree view of the dining-out experience.

Read More
© 2016 Mintel Group Ltd. | Privacy Policy | Legal | Cookie Use