Last night we announced that new SkyMiles changes were coming today and they are finally announced. They are switching to a revenue based program for earning and redeeming miles.

The changes, which take effect on January 1, 2015, mean that customers will now earn miles toward Award Travel based on their ticket price versus distance flown, and general SkyMiles members will earn five miles per U.S. dollar spent

Comparing Earning Structures

All Delta-marketed flights or Delta-ticketed flights flown on or after January 1, 2015, will earn miles based on ticket price (base fare + carrier imposed surcharges), rather than distance flown.

• General SkyMiles members – earn 5 miles per dollar spent
• Silver Medallion members – earn 7 miles per dollar spent
• Gold Medallion members – earn 8 miles per dollar spent
• Platinum Medallion members – earn 9 miles per dollar spent
• Diamond Medallion members – earn 11 miles per dollar spent
• Delta SkyMiles Credit Card members – will continue to earn up to an additional 2 miles per dollar on Delta purchases with the Card

Members will no longer earn a class of service bonus for redeemable miles since the new rate of mileage accrual is based on the price of the ticket, and included in the mileage amount earned based on the new calculation.  However, a class of service bonus will still be applied to MQMs because MQMs will continue to be earned based on distance flown.

Details of Revenue-Based Mileage Calculation

• Mileage will be calculated using the base fare and carrier-imposed surcharges. Government-imposed taxes and fees, seat purchases and other ancillary fees do not count toward earning miles.
• Total miles earned will be prorated across the ticket segments based on the percentage of the distance flown for each segment, just as Medallion Qualification Dollars (MQDs) are currently prorated across ticket segments.
• If a ticket is reissued after a portion of the flights are posted to the account and an adjustment is necessary due to a change in price of the ticket, the adjustment will be applied to any un-flown segments and posted to the account once the remaining flight(s) are flown.
• If a ticket is issued by one of Delta’s partner airlines and includes both partner-marketed and Delta-marketed, the partner-marketed segments will earn miles based on a percentage of the distance flown as determined by the class of service, while the Delta-marketed segments will earn miles based on the total base fare and carrier-imposed surcharges, prorated based on distance flown.
• For tickets eligible to earn miles based on the total base fare and carrier-imposed surcharges, and purchased in a currency other than USD, the currency will be converted to USD based on the IATA 5-day currency exchange rate at the time of ticketing. Mileage earn rates per USD will be credited once travel has been completed.
• The 500-mile minimum will no longer apply when earning miles, but will remain for earning MQMs.
• Maximum number of miles earned per person, per reservation is 75,000, inclusive of any Medallion mileage bonuses or class-of-service bonuses.  Promotional mileage bonuses will not count toward the 75,000 maximum mileage accrual per person per reservation unless otherwise stated in the promotion’s terms and conditions.  

The changes will not affect the way SkyMiles Medallion members earn their status, and none of their elite benefits are changing. Medallion qualification will still be based on distance flown.

New Redemption Options
• Miles you can redeem for any Delta flight, with no blackout dates
• More Award Seats at the lowest price levels
• New One-Way Awards
• New Miles + Cash Award options
• All-new Award Ticket search and shopping at delta.com

Bottom Line

These changes to switching to a revenue earning/redemption model have been in the works for many years so I can’t say that I’m completely surprised by the announcement. Basically the best way now to earn SkyMiles will be through credit card sign-up bonuses and credit card spending since you’ll still earn 1 SkyMile per dollar spent.

One of the reasons there are no changes to how you will earn Medallion status is due to Delta’s partnership with American Express, I don’t think there will be any changes to this for a while at least. You can earn MQM boosts through some of their credit cards and I don’t think Delta wanted to get rid of those so they are leaving the Medallion earning aspect the same as of now.

However, I would argue that those who value their redeemable miles have already left Delta for American, so those who are still with Delta today are their for the Medallion benefits. Delta also knew this and took this into consideration when making these changes in my opinion.

When it comes to redemptions, Delta hasn’t announced the new award charts but plans to do so later this year. Your existing miles are safe and will be no different from the miles you will earn in 2015.

How do you feel about these changes? Is this the final straw for you to go and switch over to United or American?

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