By Karen Jacobs
Feb 26 Delta Air Lines Inc, making a
bigger play for business travelers, said it would change its
frequent-flier program to base miles earned toward free flights
on how much customers spend rather than the distance traveled.
The move, which will take effect next year, will benefit
corporate travelers who are the most profitable for airlines.
Those travelers can spend two to three times or more than
leisure passengers, who tend to look for bargains. Business
travelers also tend to book more flights.
Delta's change will sweeten mileage awards for travelers who
pay more for airline tickets.
George Hamlin, an aviation consultant in Fairfax, Virginia,
said the frequent-flier plan change comes as airlines look to
cater more to most profitable customers.
"It's going to upset a lot of people but it's economic
reality," Hamlin said. "Leisure passengers typically seek out
price, and carrier loyalty is often a second priority."
As of Jan. 1 of next year, Delta passengers will garner
between 5 and 11 miles for each dollar spent on airfares
depending on their frequent-flier status, with those at the
highest level earning the most, the carrier said. Purchases with
a Delta SkyMiles credit card will earn additional miles.
Airline loyalty programs can help increase business among
business travelers who fly often. Miles accrued under Delta's
loyalty program do not expire.
Brian Kelly, founder of ThePointsGuy.com, a travel website
that focuses on frequent-flier issues, said the move could be
good for travelers who spend a lot on tickets but don't fly
"It hurts consumers who are savvy with their money and go
for the most reasonable fares," said Kelly.
JetBlue Airways and Southwest Airlines also
tie frequent-flier miles earned to the amount spent on a ticket,
and Hamlin said he expects other major U.S. airlines to follow
Delta has taken many moves to draw more business travelers
in recent years. It renovated terminals at LaGuardia and John F.
Kennedy International airports in New York, a market rich with
business customers. It is looking to lure more corporate
passengers with a joint venture it began this year with
Britain's Virgin Atlantic Airways, a partnership that
strengthened Delta's presence at London's Heathrow airport.
Robert Mann, an aviation consultant in Port Washington, New
York, said Delta's move made sense and is now technologically
feasible since airlines can track travelers' spending.
"The spend, the fares paid and the willingness to buy up are
the best approximations of a customer's contribution to carrier
profitability, and that's what you want to reward," Mann said.
"That's what loyalty is."
American Airlines Group and United Continental
Holdings declined to comment on Delta's move or any
possible changes to their programs.
Shares of Delta, which have risen about 22 percent so far
this year, rose 0.8 percent to $33.51 on Wednesday. Other
airlines were mixed, with American Airlines down 0.7 percent at
$36.75 and United off nearly 1 percent at $46.81.