Have Sky Miles Program Changes Failed Delta's Best Customers and Shareholders?

In this article (Paragraph No. 10,351) the author notes that Delta Air lines announced a seemingly radical change in its frequent flyer program in December 2002. The change affected the distribution and use of upgrades and the way status miles would be earned. The change was met with great frustration among members of the elite level frequent flyer community it affected most. After continuous attempts by this group, assertedly Delta's best customers, to work with the carrier on what the group felt was a fairer policy, Delta made no alterations and went forth with the implementation of the new policy. In this paper the author concludes that the reaction of these important customers has been to abandon the airline. The author discusses the corporate governance issues surrounding Delta's move and explores the possible economic impact of the changes and the migration of the carrier's coveted elite flyers to other airlines. The reduction in the number of these flyers and, hence, their revenue stream, breaches the Delta board's and management's duty to its shareholders in maximizing profits and shareholder price. The author further discusses whether a duty under the paradigm of corporate governance can be established for the elite flyers of Delta and, if such a duty can be recognized, whether that group of flyers can bring an action in equity against the airline.

• Corporate Authors:

  International Aviation Law Institute

  DePaul University College of Law, 25 E Jackson Boulevard
  Chicago, IL  United States  60604
• Authors:
  • Magedoff, Ari Royce
• Publication Date: 2004

Language

• English

Media Info

• Media Type: Print
• Edition: Transfer Binder 1: 2001 to 2004
• Pagination: pp 4311-4326
• Monograph Title: Issues in Aviation Law and Policy

Subject/Index Terms

• TRT Terms: Airlines; Customer satisfaction; Economic impacts; Frequent flyer programs; Governance
• Identifier Terms: Delta Air Lines; Delta AirElite
• Subject Areas: Aviation; Law;

Filing Info

• Accession Number: 01149569
• Record Type: Publication
• Files: TRIS
• Created Date: Jan 29 2010 12:03PM