Delta CFO: Loyalty 'Took Off' When the Airline Switched to a Revenue-Based Model
Skift Take
Delta argues recent changes to its frequent flyer program have helped improved loyalty, but not everyone is so sure. What they almost certainly have done, however, is improve profitability.
Awarding frequent flyer miles to customers based on how far they flew was a relic of a prior era and no longer appropriate, the CFO of Delta Air Lines told investment analysts this week.
But though Delta's program now gives fewer miles to many passengers, the change has helped the airline win loyalty from customers who matter, Delta's Paul Jacobsen argued Thursday at the Bank of America Merrill Lynch 2017 Transportation Conference.
"I think loyalty really took off when we ultimately made the conversion away from miles-based program to a dollar-based program," he said. "The miles-based program was an antiquity out of deregulation and really didn't have a practical application in a world where pricing is set ... irrespective of distance."
Delta was the first legacy U.S. airline to move to a revenue-based model, adopting it in 2015. Some high-spending business travelers earn more miles, but mo
