SkyMiles and WorldPerks Members Advised Not to Panic
||:: Late-Breaking News
(Posted: Sep 14, 2005)
News of recent bankruptcy filings by Delta Air Lines and Northwest Airlines has SkyMiles and WorldPerks members concerned about the future value of their miles and already booked award tickets. But InsideFlyer magazine publisher and editor, Randy Petersen, is cautioning frequent flyers to guard against panic.
"I can state with confidence that I do not believe that the SkyMiles program nor the WorldPerks program is in any imminent danger," Petersen said.
According to Petersen, research conducted by InsideFlyer has concluded that Delta Air Lines maintains strategic partnerships and possesses several valuable assets, such as an abundance of European gates, which should provide the airline with the resources it will need to manage its operations for at least the next 12 months. This could well be enough time to begin serious restructuring efforts that could lead to a more competitive and profitable airline.
The prognosis for Northwest WorldPerks members is slightly more guarded, due in large part to the current labor issues facing the airline. Like Delta though, Northwest maintains a number of valuable gate assets, primarily in the Asian region (it used to be Northwest Orient afterall), which provide the airline with what should be sufficient resources to weather this storm. For now WorldPerks members should do the same as SkyMiles members, continue to earn and burn as they normally would, with the only caveat being that WorldPerks members should be aware that this advice could change in as little as six months.
InsideFlyer is recommending against a "run on redemptions" by members who want to protect themselves from a devaluation of the currency.
"The SkyMiles and WorldPerks programs are two of only three major airline programs, along with the Southwest Rapid Rewards, that offer no option to convert miles to another program; therefore, redemption opportunities are limited to awards offered by the airlines and their partners," Petersen said. "Members could, of course, redeem their SkyMiles or WorldPerks miles for awards on partner airlines, but at this point this is not a necessary step to protect the miles so we recommend against redeeming for awards that members would otherwise not have selected."
InsideFlyer has provided ongoing guidance and analysis to members of the United Mileage Plus, US Airways Dividend Miles, Air Canada Aeroplan, Hawaiian Airlines HawaiianMiles and Varig Smiles programs as the respective airlines have negotiated bankruptcy proceedings. Members of those programs who have followed the advice of the magazine have enjoyed a stable valuation of their miles and, in the case of Dividend Miles, have actually seen the value of their miles increase as a result of the merger with America West Airlines.
As the situation at Delta and Northwest progresses, InsideFlyer will continue to update its advice in both the print edition of the magazine and online at http://www.insideflyer.com
posted: Oct 9, 2005 at 3:33am (MT)
I would be pretty concerned that even though they may not totally go out of business, they are being rapidely devaluated. As of Jan, the "cost" of a RT Delta Business class ticket to Europe & other many other places is going from 180,000 to 250,000 miles!
posted: Jan 24, 2006 at 1:20am (MT)
Delta Skymiles partner Air France no longer allows skymiles reward travel in first class as of December 31st., 2005. This is also a significant change to the Delta program that should be noted.
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