Originally created 12/16/04

SkyMiles program changes to win back customers



ATLANTA - Struggling Delta Air Lines Inc. announced a raft of changes to its frequent flier program on Wednesday, ranging from making it easier to get upgrades to simplifying fees, in hopes of winning back customers angered by previous changes to the program.

The overhaul followed a campaign by some of Delta's highest level frequent fliers, who launched a Web site in protest of changes in 2002 to the SkyMiles program, as well as other policies, at the nation's No. 3 airline.

The movement led by the airline's Platinum Medallion-level frequent fliers included ads in USA Today, a roving billboard outside a stockholders' meeting and a negotiating session with Delta executives.

Delta, which came close to filing for bankruptcy before winning $1 billion in concessions from pilots in November, expressed optimism the moves would benefit customers.

"Before making these changes, we listened closely to customers and employees and focused our attention on areas with the most customer value," Paul Matsen, Delta's chief marketing officer, said Wednesday.

Starting Jan. 1, SkyMiles members will earn one Medallion mile for every mile flown, while first-class fliers will get 1.5 Medallion miles for every mile flown. Two years ago, when the airline previously reworked the program, SkyMiles members earned half a Medallion mile for every mile flown, but first-class fliers received 2 Medallion miles for every mile flown.

The changes should make it easier to upgrade tickets to business or first-class. The airline said it also making the formulas used to calculate elite SkyMiles membership easier to understand.

SkyMiles members must fly at least 25,000 Medallion miles each year to qualify for the upgrades.

Additionally, the fee structure for special services is being simplified. For example, all customers will only pay $50 for ticket changes instead of $100.

Delta for years attracted customers with its SkyMiles program, which rewarded frequent flyers with upgraded seats and free flights. But in 2002, Delta reworked the terms of SkyMiles, asserting the changes benefited its premium customers and generated additional revenue - close to $40 million in 2003. Delta also said that fewer than 2 percent of SkyMiles members were affected.

The 2002 overhaul also came as Delta was still reeling from the Sept. 11, 2001 attacks, which hurt air travel worldwide, and forced the airline to find new sources of revenue. Delta has lost more than $6 billion since 2001.

Last month, Delta avoided bankruptcy when its pilots agreed to the concessions. But some analysts say the deal, along with new financing from some creditors, only gives Delta about 12 months of breathing room.

They say the airline still needs to increase its revenue and execute its broad turnaround plan.

On the Net:

Save SkyMiles: http://www.saveskymiles.com

Delta: http://www.delta.com