Should we redeam our skymiles right away?
August 10, 2005 9:46 PM Subscribe
With Delta Airlines on the brink of bankruptcy, how much longer are my skymiles of any value?
My wife and I have accrued enough sky miles to fly both of us to Hawaii for a nice vacation. We were hoping to be able to do this next May. But with the predictions of Delta heading towards a Chapter 11 bankruptcy I wonder if our miles will be of no use by then. Would we be better off redeaming our miles for a less fanciful vacation and go somewhere right away, or hold out in hopes of going somewhere nice next spring?
My wife and I have accrued enough sky miles to fly both of us to Hawaii for a nice vacation. We were hoping to be able to do this next May. But with the predictions of Delta heading towards a Chapter 11 bankruptcy I wonder if our miles will be of no use by then. Would we be better off redeaming our miles for a less fanciful vacation and go somewhere right away, or hold out in hopes of going somewhere nice next spring?
United's been in Chapter 11 for a few years now, and their mileage program is still going strong. That's not to say that Delta's will surivive as well, but it's probably one of the last things to get cut as it is one of the strongest loyalty/retention tools the airlines have.
posted by gen at 10:19 PM on August 10, 2005
posted by gen at 10:19 PM on August 10, 2005
There are many precedents to airlines keeping their frequent flier programs through Chapter 11. If they dropped their program, they would surely lose a lot of customers, and their creditors wouldn't like this. If the airline is in any damage of liquidation, then you are screwed.
Anyway, you want award tickets to Hawaii in nine months and you haven't booked yet? Get cracking!
posted by grouse at 1:30 AM on August 11, 2005
Anyway, you want award tickets to Hawaii in nine months and you haven't booked yet? Get cracking!
posted by grouse at 1:30 AM on August 11, 2005
I would not worry about it too much. If you do, I would ask in places like airliners.net for example where there are people who _really_ know. But yeah, I'm in the same situation with Delta and American but do not worry. IMHO, Delta will not crash completely (no pun intended), with AF they are the main carrier for Skyteam as well.
Basically, almost all the U.S. full-service airlines are in a sad state but the last thing they would do would be to cancel their FF programmes. There is that other website that especially specialises in these programmes with real experts - the name escapes me at the moment and I have no time to google or look through bookmarks now since I need to run but I'm sure you will find it or somebody will remember. But you're better off trying to find info in these airline enthusiast sites than here. There are a lot of aviation nuts out there :)
posted by keijo at 2:28 AM on August 11, 2005
Basically, almost all the U.S. full-service airlines are in a sad state but the last thing they would do would be to cancel their FF programmes. There is that other website that especially specialises in these programmes with real experts - the name escapes me at the moment and I have no time to google or look through bookmarks now since I need to run but I'm sure you will find it or somebody will remember. But you're better off trying to find info in these airline enthusiast sites than here. There are a lot of aviation nuts out there :)
posted by keijo at 2:28 AM on August 11, 2005
FlyerTalk. Which IMHO is a better place for this kind of info than Airliners.net (which is a better place for info on airline equipment).
I checked before my previous post, and no one on the DL board there seems to be overly worried. I think US is the only airline people are really worried about liquidation because it is now its second time in Chapter 11.
posted by grouse at 2:56 AM on August 11, 2005
I checked before my previous post, and no one on the DL board there seems to be overly worried. I think US is the only airline people are really worried about liquidation because it is now its second time in Chapter 11.
posted by grouse at 2:56 AM on August 11, 2005
Perhaps tangential, but my understanding is that unredeemed miles on their books represent a deficit (or is it liability), i.e., the opposite of an asset.
Getting custmers to redeem miles would, perhaps (and I Am Not An Accountant) help their financial situation. Sure, it's not revenue, but it is a decrease in deficit.
I mean, doesn't this parallel unused vacation time in a company; their books look better the more vacation time is used up?
posted by stevil at 8:11 AM on August 11, 2005
Getting custmers to redeem miles would, perhaps (and I Am Not An Accountant) help their financial situation. Sure, it's not revenue, but it is a decrease in deficit.
I mean, doesn't this parallel unused vacation time in a company; their books look better the more vacation time is used up?
posted by stevil at 8:11 AM on August 11, 2005
but it is a decrease in deficit.
The term is liability, not deficit. Though I'm not entirely sure how they account for frequent flier miles, it occurs to me that there could in fact be several methods. One thought would be to assume it to be a loss they incur every year based on statistical analysis of how often people actually use their rewards. Like a merchandising accountant would have an allowance for returned goods. Despite flier miles being handed out like candy, I have a strong suspicion that not many people use it. Of course, I could be wrong, but my assumption is based on the fact that a majority of flights booked are by people who only fly a couple times a year.
posted by SeizeTheDay at 11:59 AM on August 11, 2005
The term is liability, not deficit. Though I'm not entirely sure how they account for frequent flier miles, it occurs to me that there could in fact be several methods. One thought would be to assume it to be a loss they incur every year based on statistical analysis of how often people actually use their rewards. Like a merchandising accountant would have an allowance for returned goods. Despite flier miles being handed out like candy, I have a strong suspicion that not many people use it. Of course, I could be wrong, but my assumption is based on the fact that a majority of flights booked are by people who only fly a couple times a year.
posted by SeizeTheDay at 11:59 AM on August 11, 2005
This thread is closed to new comments.
posted by SeizeTheDay at 10:16 PM on August 10, 2005