UPDATE: Delta plans major change to frequent-flier program
Delta Air Lines said on Wednesday it would make a major change to its frequent-flier program, basing the number of miles earned toward free flights on how much customers spend rather than the distance traveled.
The change, which will take effect next year, will sweeten mileage awards for travelers who pay more for airline tickets, the carrier said in a statement.
Atlanta-based Delta said the new program would favor "frequent business travelers" and leisure fliers who buy tickets at higher fares.
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.
"The travel industry, including nearly all hotel and credit card programs, has already moved to a spend-based model," Jeff Robertson, vice president for Delta's SkyMiles loyalty program, said in the statement. "Delta will become the first U.S. global carrier to make this transition to better reward our most loyal customers."
George Hamlin, an aviation consultant in Fairfax, Va., said the frequent-flier plan change comes as airlines look to cater more to most profitable customers. Corporate customers 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.
"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."
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 suit.
American Airlines Group declined to comment on Delta's move or any possible changes to its program. United Continental Holdings did not immediately respond to a request for comment.
Shares of Delta, which have risen about 22 percent so far this year, were up 0.8 percent to $33.51 in morning trading on Wednesday.