Live from the Mo Show: Delta SkyMiles Still Flying Despite Looming Bankruptcy
(Promo) In the face of a steady stream of pessimism about the prospects of bankruptcy for parent Delta Airlines, the Delta SkyMiles reward program is still flying.
On Tuesday, the airline said that it was cutting salaries of most employees by 10% starting in January. Annual vacations are being capped at five weeks, instead of six, and employees will be asked to pay a greater share for health benefits.
“We don’t know what will happen,” said Nancy Montgomery, senior account manager for the SkyMiles program, but she noted that Delta has 33 million current members in the program, of which 10 million have been active in the past year.
Montgomery said she and her staff have watched other airlines struggle through bankruptcy (particularly United and US Air), and studied the impact on their loyalty programs.
“But people are still using our miles, companies are still calling us to find ways to reward their employees and customers with travel,” she said.
In recent months, these have included ShareBuilder.com (which gives SkyMiles in exchange for stock purchases), Michelin (2,500 miles for a set of tires) and a new Web site, www.skymilesshopping.com, which showcases merchants who offer miles for purchases.
While more than 50% of SkyMiles are generated by non-travel purchases or activities, the program is not as broad on the redemption side. Unlike other frequent flyer programs (American AAdvantage, for example), Delta SkyMiles can be redeemed only for travel. However, Delta has partnered with 18 other airlines around the world that honor its miles.
If Delta gets grounded, those partners may be processing lots more SkyMiles.