Could Delta's frequent flyer change become the new standard for all big carriers?

Delta's frequent flyers will start earning miles based on ticket prices, not how far they go or how often they travel. The company announced last week that they will begin to restructure their frequent flyer program next year.

CBS News' travel editor Peter Greenberg joined the "CBS This Morning" co-hosts to take a closer look at how those changes will impact flyers.

Southwest and JetBlue airlines have already gone to a similar loyalty program tied to ticket prices and Greenberg said that Delta is now doing the same because it's a great revenue generator. The changes are an effort to bring in more business travelers, who spend significantly more per ticket than leisure travelers.

"It's about yield. How much can you get for each available seat? We're a nation of addicted frequent flyers. We will do anything for those miles and they're going to test how much we're willing to do it now," he said.

Greenberg said that "it's all about who's sitting up front" and that this new program puts an emphasis on selling out the first-class cabin.

"If you can fill the first-class section of the plane with paying customers, you've made money," he said. "Conversely, if you can't fill the first class section, they can have so many people in coach they're sitting on the wings, they will lose money."

Many think that this program change is going to make redeeming miles harder, which Greenberg said could be a revenue boost to the airlines.

"There are actually more unredeemed frequent flyer miles out there in circulation in the world than there is currency in circulation in the world - 17 and a half trillion miles that may never be redeemed. That's a great source of profit for the airlines as long as they don't redeem them," he said.

Greenberg also discussed other ways global airlines are catering to a higher-end customer who is willing to spend more money to travel.

"If you want to pay, you get to play, he said."In London, for example, if you spent $2,500, you get treated as a head of state ... They limo you out to the plane. Lufthansa has an entire first-class - not a counter, not a gate - they have a first-class terminal. And they drive you to the plane in a Porsche."

He said the bottom line is "they're going for the 1 percent" because they revenue they can get is "huge" and the up-sell is "tremendous."

Greenberg said that he does not believe there will be much backlash from these changes and predicted American and United Airlines will launch similar programs.

"If the airlines are flying at already 83 percent capacity, which means they're already full, there's no financial incentive for the airlines to want to displace a revenue passenger to redeem miles and give you that ticket," he said. "You're going to pay more for fewer miles that you're going to have the same difficulty in redeeming. What a deal."

To see Peter Greenberg's full interview, watch the video in the player above


  • Shoshana Davis

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