I just read this on USA Today. It is very interesting and I tend to agree with the author. The airlines would never just drop the programs, but you and I have seen the slow demise of the programs over time to where the miles are harder and harder to use.

I would appreciate any comments from the travel agents who post here.

THE END OF FREQUENT-FLYER PROGRAMS


Without drawing any kind of moral equivalency, let's just say that December 1, 2007, is a date that will live in business-travel infamy. That's when one of the Big Six will complete a sneak attack that will destroy the frequent-flier programs as we have known them.
If you're a player in Delta SkyMiles, I suggest you cash out by November 30 because your miles will essentially be worthless the next day. Playing in other frequent-flier plans? Start considering your options because, if Delta succeeds, your carrier of choice is sure to do the same thing.

I know you don't know what I'm talking about because part of Delta's strategy is apparently to keep secret its assault on the value and viability of SkyMiles. It hasn't publicly announced its change or, until SkyMiles managing director Jeff Robertson spoke with me this week, discussed it with the media. Until now, the only way business travelers knew their flier miles were being destroyed was if they stumbled upon a new rule that Delta recently slipped into its SkyMiles terms and conditions.

Here's what is now buried in the fine print of Delta's website: Effective December 1, SkyChoice Award Ticket Reservations will no longer be available on every Delta flight in which a seat is available for sale. SkyChoice Award Ticket Reservations will continue to be available on most Delta flights, but seats will be limited and possibly unavailable on some flights.

If you're unfamiliar with SkyMiles, you should know that SkyChoice is Delta's unrestricted, double-miles award level. At least it has been the unrestricted level. Come December 1, Delta will no longer have any unrestricted awards. It will only have the heavily restricted SkySaver level and the somewhat less restricted SkyChoice level, which will continue to cost twice as many miles. Worst of all, when you attempt to use a SkyChoice award, Delta won't tell you in advance what seats you can't have or when you can't have them.

Although Northwest Airlines and US Airways have already attacked the basic concept that you can always get any seat you want with your miles as long as you're willing to pay enough for it, Delta SkyMiles is the first trend-setting, market-moving program that has told its frequent fliers that miles are, essentially, worthless whenever the airline decides not to honor them

By Robertson's own admission, beginning December 1, about 5% of Delta's seats will be off-limits to Delta SkyMiles members regardless of how many miles they are willing to pay. And he can't or won't say what seats are unavailable. There's no list of what you can't have, no guidelines and no disclosure. You have to try to guess when Delta won't give you a seat at the formerly unrestricted double-miles level.

If Delta gets away with this, you can be sure that the other airlines will restrict "unrestricted" awards. And five percent of the inventory will quickly become 10% or 15% or 25%. You and I know how the airlines work. They relish these kinds of sleight-of-corporate-hand games.

Let's stop here for some background. When frequent-flier programs were created 27 years ago, all award seats were unrestricted. Your miles were good for any seat at any time on any route. There were no capacity controls, blackout dates or governors. The airlines published a single award chart, and, if a seat was available, it was yours for the stated price.

As the years rolled on, the airlines created hundreds of new ways to earn miles and the system got out of economic whack. There were so many miles chasing so few seats, especially on prime routes in premium classes at peak times, that the airlines were bleeding cash. Carriers were printing so much mileage "currency" that the financial underpinnings of frequent-flier plans — and the airlines themselves — were at risk.

In the late 1980s, however, Steve Grosvald and the team at the nascent OnePass program figured out what essentially became Frequent-flier Programs 2.0. OnePass featured a two-tier award system. Lower-priced, off-peak awards were restricted by blackout dates and capacity controls. But OnePass also maintained an unrestricted level, albeit at a higher number of miles. As long as you paid about twice as many miles, you could have any available seat. The other carriers immediately mimicked OnePass' structure.

Even as frequent-flier programs morphed over the next two decades, the value proposition remained unchanged: Surrender enough miles and you could have whatever seat was available for sale. In fact, that proposition was the bedrock of the airlines' defense of frequent flier programs. Whenever a traveler complained about award-seat availability or some media outlet claimed that airlines were too restrictive with frequent-flier seats, the carriers' public relations departments would respond with a haughty homily: We're sorry that some people can't have exactly the seat they want on the day they want it at the restricted level. But every seat in the system is available at the double-miles, unrestricted level.

But now Delta has changed all that. Come December 1, Delta makes SkyMiles worthless because there is a secret cache of seats you can never have no matter how many miles you are willing to pay. That destroys the basis of programs as we have known them.

Or consider Delta's decision this way: What if the U.S. government restricted the U.S. dollar by telling you there were situations when the greenback wasn't valid? What if, come Thanksgiving week, the government decreed that butchers and supermarkets couldn't accept dollars for the purchase of a turkey? What if, no matter how many dollars you were willing to spend, the government decided that only gold bullion could be used to buy turkey for your Thanksgiving table?

Would you continue to trust the U.S. dollar? Would you have faith that the government wouldn't then make it illegal to use dollars to buy hot dogs and burgers before the Fourth of July?

Of course you wouldn't. A currency that isn't valid to buy a product on a totally transparent basis is worthless. What good are U.S. dollars, Delta SkyMiles or any other airline's frequent-flier miles if there are times when you can't use them to secure seats at a publicly stated price? What good are miles that can't be used for a secret cache of seats that the airlines won't tell you about?

Delta, of course, disputes this indisputable analysis. Robertson insists the airline's decision to make its currency worthless for certain award seats "is truly not a big deal." He says 95% of SkyMiles members won't be impacted by the change. "There are plenty of other redemption options," he says.

That is economic nonsense and infuriating airline double-talk. It doesn't matter that there are other redemption opportunities. A currency that isn't freely convertible into the product you want to buy when you want to buy it has no value at all. And I don't know why any traveler would give his or her loyalty to any airline that can tell us there are times when they won't honor the currency they created.

The saddest part of this spectacle is that it doesn't have to be this way. If Robertson and Delta are worried that too many frequent fliers are claiming SkyChoice awards for inventory that Delta could otherwise sell for cash, there's a simple, elegant solution that keeps the mileage currency valid: Charge more miles for those seats.

If Delta business-class seats to Nice during the week of the Cannes Film Festival — that's an example Robertson mentioned several times — are so valuable, all Delta has to do is charge more miles to claim those seats. A SkyChoice "super-premium" level can be created to cover the 5% of inventory that is so valuable that traditional double-miles awards are deemed insufficient payment.

In fact, Delta already employs exactly that model in the cash world. It doesn't have one cash fare for international business-class seats, it has three prices. There's no reason why SkyChoice awards can't be tied to Delta's business-class fare structure. When paid seats are available in the cheapest business-class fare category, SkyChoice awards can cost the existing double miles. When business-class seats are available only at a higher-priced level, SkyChoice award seats could cost a substantial premium above double miles. And when Delta is only selling full-fare business-class seats — say to Nice during that week before Cannes — a SkyChoice award would cost a suitable extra number of miles.

"Maybe unrestricted awards should cost triple miles at the peak demand periods, but don't restrict" the unrestricted awards, says Grosvald, the man who created restricted awards for OnePass and has gone on to create frequent-flier plans for airlines around the world.

"Any business relationship has to be win-win," explains Grosvald. "It is one-sided for airlines to tell customers" that there are seats they can never have with miles. "There has to be a value in miles. All you have to do is figure out that value."

Unfortunately, Delta has decided that SkyMiles have no value. That is the inescapable and indisputable reality of the decision to make a secret cache of seats unavailable for purchase with SkyMiles. In my opinion, you can't afford to do business with a carrier that mints worthless currency and then claims it is a reward for your loyalty.


Joe Brancatelli is editor and publisher of JoeSentMe.com, a website for business travelers. He is also the former executive editor of Frequent Flier magazine, travel advisor of Travel Holiday and contributing editor to Travel + Leisure. He can be reached at travel@usatoday.com.

How does one "cash out" their Delta FF miles other than travel?

How does this affect travel on their partners?

I am glad he is bringing attention to the dimishing value of FF miles, but I do not have the same negative view of the programs. Yes once you could use the FF miles unrestricted but you also only earned miles by actually flying on the airline so they where rewarding good customers. Now you receive miles by flying other airlines, and numerous CC programs that give you miles for every dollar you spend, and you can even buy them on EBAY.

Common sense told me they would get harder and harder to use. And common sense again if you want to go Nice during the Cannes film festival it is going to be hard to get a seat.

I have always been able to get First or business class seats (8) so far to Africa without using the double miles of SkyChoice. These seats would have cost over $50,000.00.

So to be selfish I hope everyone gives up on Delta FF miles so i can have more seats available.

On trading miles or combing miles, there is a website www.joesentme.com that has a section on how to do this. If you have miles scattered in various hotels, rental car companies and airlines, there is a way to trade them and get them to one airline. You lose a lot of them, but you can eventually use them this way.

Points.com you can also trade Delta miles.


Points.com