This May Be the Best Frequent Flier Perk Ever
Forget about getting bumped up to first class. Delta Airlines is now bumping its best customers off commercial flights entirely -- and onto private jets.
The program got off the ground last week, according to Bloomberg, with its first flight traveling from Cincinnati to Atlanta.
To be eligible for the upgrade, fliers must have at least 125,000 miles in travel and $15,000 in annual spending with the airline. The bump costs an extra $300 to $800.
In addition to improving the loyalty among some of Delta’s best customers, the program has a side benefit for Delta, allowing it to get some value from positioning flights, known as “empty legs,” which make up about 30 percent of industry flying.
Delta and other airlines have been shifting their loyalty programs in ways that make it easier for elite flyers to earn rewards and more difficult for more irregular customers.
Related: Rethinking airline points strategy with the Points Guy
Starting in June 2016, Delta will issue rewards based on the amount of money spent rather than miles traveled, and the airline may change the number of miles necessary to book a flight based on demand and other factors.
Analysts say that other airlines may follow suit. Airline reward programs have been unsuccessful in fostering loyalty among patrons, many of whom book flights based on cost and convenience rather than brand preference. Only 44 percent of travelers and 40 percent of business travelers fly at least three-quarters of their miles on their preferred airline, reports Deloitte.
Delta’s reward program ranked 9th on U.S. News’ annual ranking of the best airline rewards programs, released this week, receiving 3.1 stars out of 5. Alaska Airlines was ranked first.
Chart of the Day: SALT in the GOP’s Wounds
The stark and growing divide between urban/suburban and rural districts was one big story in this year’s election results, with Democrats gaining seats in the House as a result of their success in suburban areas. The GOP tax law may have helped drive that trend, Yahoo Finance’s Brian Cheung notes.
The new tax law capped the amount of state and local tax deductions Americans can claim in their federal filings at $10,000. Congressional seats for nine of the top 25 districts where residents claim those SALT deductions were held by Republicans heading into Election Day. Six of the nine flipped to the Democrats in last week’s midterms.
Chart of the Day: Big Pharma's Big Profits
Ten companies, including nine pharmaceutical giants, accounted for half of the health care industry's $50 billion in worldwide profits in the third quarter of 2018, according to an analysis by Axios’s Bob Herman. Drug companies generated 23 percent of the industry’s $636 billion in revenue — and 63 percent of the total profits. “Americans spend a lot more money on hospital and physician care than prescription drugs, but pharmaceutical companies pocket a lot more than other parts of the industry,” Herman writes.
Chart of the Day: Infrastructure Spending Over 60 Years
Federal, state and local governments spent about $441 billion on infrastructure in 2017, with the money going toward highways, mass transit and rail, aviation, water transportation, water resources and water utilities. Measured as a percentage of GDP, total spending is a bit lower than it was 50 years ago. For more details, see this new report from the Congressional Budget Office.
Number of the Day: $3.3 Billion
The GOP tax cuts have provided a significant earnings boost for the big U.S. banks so far this year. Changes in the tax code “saved the nation’s six biggest banks $3.3 billion in the third quarter alone,” according to a Bloomberg report Thursday. The data is drawn from earnings reports from Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo.
Clarifying the Drop in Obamacare Premiums
We told you Thursday about the Trump administration’s announcement that average premiums for benchmark Obamacare plans will fall 1.5 percent next year, but analyst Charles Gaba says the story is a bit more complicated. According to Gaba’s calculations, average premiums for all individual health plans will rise next year by 3.1 percent.
The difference between the two figures is produced by two very different datasets. The Trump administration included only the second-lowest-cost Silver plans in 39 states in its analysis, while Gaba examined all individual plans sold in all 50 states.