Delta Report: SkyMiles Loyalty Program Adds to Corporate Profits
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Delta Loyalty

The power of the customer loyalty program—in this case, the SkyMiles frequent-flyer program—is evidenced in results.

"Delta's operating revenue improved 6%, or $571 million, in the December 2014 quarter compared to the December 2013 quarter," the company reports. "Traffic increased 4% on a 3.7% increase in capacity."

Contributing to the revenue increase: the SkyMiles program, and other factors. "Other revenue increased 21.3%, or $205 million, driven by SkyMiles revenues, third-party refinery sales, and joint venture settlements," reports the company.

President Edward Bastian reported in an earnings call, courtesy of SeekingAlpha.com, that "we’ve changed SkyMiles from a distance-based program to a spend-based program. This change should drive higher revenues from stronger customer loyalty as we put rewards into our most valuable customers, and we are already receiving positive feedback from Delta Loyalty them. We were also able to translate the value of our frequent-flyer program into improved terms in a new agreement we reached with American Express which we announced last month. That new agreement, which went into effect on January the 1st, is expected to deliver several hundred million in higher revenues to Delta this year through a 15% improvement in terms."

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