Delta’s New Mileage-Earning System Will Cap the Number of Miles Earned On Expensive Tickets – Won’t Reward High Value Customers After All

Delta’s mileage-earning details page for the new Skymiles program going into effect January 1 detail how miles will be earned based on fare paid, instead of miles flown. And it has some interesting details about why customers buying the most expensive tickets won’t do so well, after all.

I outlined Delta’s changes last week. The talking point from Delta is that their most valuable customers will be rewarded, while people paying the lowest fares will get reliable transportation (and, cough, very few miles).

They’re changing the redemption side of things too. They haven’t told us how yet. That makes many flyers even more nervous than the changes in mileage-earning from flying.

But I’ve already shown that many business travelers flying expensive tickets won’t earn more miles than they currently do — it’s flyers only on the most expensive tickets, and flyers who normally buy expensive tickets on short routes, that come out ahead.

And I’ve also shown that it will take more spending for Gold and Platinum elite members to come out ahead of the old program than it will for General Members to come out ahead.

But it turns out that Delta is going to impose a cap on the amount of mileage earned, no matter how expensive a ticket.

Here’s the section:

Delta is going to award a maximum of 75,000 miles per ticket, no matter how expensive it is.

And here’s the fine print, that say the cap is inclusive of bonus points earned for elite status:

Miles earned for base fare and carrier-imposed surcharges, excluding government-imposed taxes and fees. Miles earned per USD spent includes Medallion mileage bonus. Subject to a maximum of 75,000 miles per ticket.

So the higher your elite tier, the lower the ticket price is where you’ll hit that cap.

Delta’s 125,000 mile a year Diamond members will not earn a single additional mile for business class tickets over $6818.18 (in base fare plus fuel surcharges).

A Diamond who flies $11,000 tickets regularly might get excited thinking they’re going to receive 132,000 miles (although we still do not know how much those miles will be worth, and Delta says they won’t tell us until the 4th quarter). But the new Delta system is going to claw back 58,000 miles from this high value customer.

(HT: Commenter David G.)


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Pingbacks

Comments

  1. maybe the cap was put in place to prevent fat finger mistakes, but seriously the low cap makes so little sense

    so long-haul Y loses, transcon loses, any advance purchase loses, even the highest priced J loses … so few winners in the scheme

  2. This is totally rational on the part of Delta.

    No one who is seriously interested in gaining useful miles for award flights is flying Delta, unless that flight is the only possible one available. Since miles given out don’t incentivize paying customers anyway, why bother?

    The only reason to keep a FF program at all, is so that “low information” customers, who don’t yet know that the SkyPesos program is virtually useless, keep flying with Delta in blissful ignorance.

  3. LMAO. Diamond medallions, Delta is just not that into you. Luckily for me, it seems like Silver is the new sweet spot.

  4. Hadn’t noticed that – thanks for pointing it out. I’m a DM who flies those $11K tickets a few times per year, and I will have to think about whether to credit those miles to Alaska. When I look back at the last $11K itinerary I flew, however, I earned 69,172 miles including class of service and Diamond bonuses. So if I were awarded 75,000 for the same itinerary I would be coming out ahead, though not by much. I’m not trying to be a DL apologist, and I’m as worried about these changes as anyone since I have a lot to lose, but just wanted to point out that this may not always be a negative outcome for high-spending business travelers (of course, reserving judgment until we learn about the redemption side).

  5. The more details I see on this, the more incredulous I am… I could start to rationalize part of what they’re doing, but taken as a whole, I can’t figure out what their goal really is. It makes me wonder how smart the DL people driving this and their consultants really are.

  6. This benefits *who* exactly? I wonder if this will change quickly.

    They’re trying to incentivize spend… up to a maximum amount? Maybe they figure those buying $11k tickets are not swayed after receiving 75k miles.

    Something tells me there are more people like @Neal, considering their options carefully. IDK why Delta did this. It removes their one crutch in promoting these changes, that they’ll benefit high-revenue passengers most. I really bet it changes.

    Delta is doing revenue-based so wrong. *sigh*

  7. I really feel like Delta would prefer it if we *didn’t think* about the mileage program when buying tickets. Maybe they’re trying to push away margin business that’s only incentivized by FF programs? IDK why they’d do that, exactly.

  8. The negatives can be rephrased 50 different ways, but if you spend 20+ CPM and you don’t fly $6K+ tickets, you’ll end up ahead. I understand that means many people will lose out, but there’s a decent swath of the population that already pays 20+ CPM and will end up gaining. It seems this is being downplayed.

  9. On a semi-related note: expect an update to the lack of award chart situation shortly… Apparently DL does listen :)

  10. Gary, I’m all for you getting your criticisms out there and getting Delta to reconsider some of these decisions–and especially to be VERY cautious about the redemption side changes–but this one seems a little overstated as an issue.

    How many tickets hitting this cap will actually come out with fewer miles than they would have under the pre-2015 system? My guess is none, which means the new system will, in fact, be more rewarding for an $11k ticket than the current system, and Delta is 100% correct in saying high spenders are being rewarded more under the new system, given the parameters you’re providing here.

  11. @NEPIC and @Gary, Are either of you hearing that it’s going to be the other shoe dropping or is there a chance Delta is actually being fairly conservative with the changes? (i.e. the low, mid, and high don’t really change and they’re simply adding low-mid, and mid-high rates in the middle)

  12. Obviously releasing a chart is better than not releasing the chart, but until we see inventory, what levels are available for what flights, we really can’t judge it.

    Suppose domestic one ways are listed at 10K, 20K, 30K, 40K, 60K. If 10K flights are actually available, that’s an improvement. If 10K and 20K are as elusive as current “low” awards are, then it’s a devaluation.

  13. This has been chatted about since it came out.

    The easy work around in the short term is to buy two separate one-way tickets, as once you’re up into that sort of price point (on Delta, at least), there’s rarely a price advantage to buy a round trip ticket.

    The bigger issue that I see is that caps like this are easy to lower over time. 75k moves to 50k in the future, and the carrier will say “this impacts less than 2% of our tickets,” etc, etc. Slippery slope.

    Recall when MQMs first came out, this earn rate was 2x on paid F…because DL valued paid F pax so much…the MQM earn rate was cut to 1.5x within two years.

    One slight solace…I suspect the cap just applies to the base and status bonus earnings, but not the CC-related extra earnings.

  14. Patricia,

    This cap does nothing about fat-finger “mistake” fares, which DL has already decided to devalue for flights flown in or after 2015.

  15. This is actually awesome for me. I will only pick places to travel where the AMEX IAP fare is about $7,000. I have recently discovered they do allow a lot of the lower priced fares to eern a second ticket free. Foesn’t the Centurion card give a medallion level to start with?
    Gary has it totally wrong, it’s the SkyButtcoin Program to me since the value or miles earned seems to be some kind of trick and certainly isn’t a store of value.

  16. @nybanker Not true in my experience with one-ways. Very few intl C class one-ways I look at work like domestic tickets, where the cost is roughly half the RT. Often two one-ways will run 14-15k for a RT that’s roughly 10k, so I don’t think that trick will work for most people.

    I agree that 75k is not a small cap, but if Delta is truly trying to provide outsize rewards to high-rev fliers, it’s still feels a bit cheap to me, especially since low-rev fliers can easily lose 50% of their earning ability.

  17. I think where Delta misses it is the fact that many os the same pope pole buying expensive tickets ALSO by cheaper one for different routes or with family. I used to buy plenty of influence J at 6-7 k a pop. But company makes me fly coach domesticly. And when I fly personally, I look for the best deal. Most flyers are these hybrid flyers. What they pick up in the top end, they will be net net losers. In my case as a DL Diamond and 3 FO family members looking for a trip to TPA $250 ticket. Why would I book the family on DL? This won’t work for them unless the rest of the oligarchy joins in.

  18. It seems that just trying to make Silver status will be difficult – you need $2500 MQDs, but they’ll only earn you 7 miles per dollar (if you are a Silver) which means 17,500. Unless you happen to ready MQDs at $2500 and MQSs at 30, you have to go to about $3600 in tickets to get you up to 25,000 miles, correct? or am I missing something???

  19. on my previous comment, can you add the two check marked items – I didn’t see them until after I posted. Thanks

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>