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Does merger mania mean mileage mayhem?

The long-anticipated flurry of [% 2509700 | | airline mergers %] may, finally, be upon us, beginning with the get-together of the country’s third- and fifth-largest carriers, Delta and Northwest. According to a Financial Times report, the airlines are already in discussions with their labor unions, a critical step in the consolidation process and a clear indication of the seriousness of the merger negotiations.

The two questions uppermost on the minds of many Delta and Northwest customers concern their frequent flyer miles. First: Will I lose my miles? And second: What will the value of my miles be, post-merger?

The good news is that no one, no matter which program they currently participate in, will lose any miles. While neither airline has addressed the issue, it is a near certainty that mileage accounts from the two programs will be combined in the event that a merger is consummated. So travelers who currently have miles in both programs will find themselves with a single account with a higher mileage balance.

The good news goes hand in hand with the bad news. Mergers are always about increasing efficiency, and redundant services are reduced or eliminated when two airlines merge. So while the surviving program will have more members, with more miles to be redeemed, the number of seats available for award redemption on the surviving airline will not increase proportionately. So it’s likely that cashing in miles for free seats will be more difficult than it is now.

There are also variables that defy prognostication. Exactly which features of which program will be incorporated into the program of the merged carriers remains to be seen. The programs of Delta and Northwest are already fairly similar, so the new program won’t be significantly different than either of the existing programs. And both already belong to the same global airline alliance, SkyTeam, so the core group of airline partners would remain the same.

But there are differences.

Delta, for example, typically gets better marks than Northwest for award availability. And Northwest is generally credited with making more upgrades available for elite members.

Would the new program maintain Delta’s generosity? Northwest’s upgrade policies? Both? Neither?

It won’t be possible to answer such questions until the new company takes discernible shape. In particular, it will come down to the business philosophies of the new management team and how they view their mileage program: as an ongoing investment in loyalty and goodwill, or as a marketing expense to be cut to the bone.

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