In this post I am going to offer some possible insight into what’s going on with Delta Skymiles — award availability, and the future of redemption — based on conversations with several different knowledgeable people regarding the transition to a revenue-based program and the agreements they have in place with their partners.
None of those people shared the full picture, so it’s possible that this is slightly off but nonetheless I believe it’s at a minimum directionally-correct.
Delta miles used to be great. Ok, not great, but they used to be much more useful than they are today – for booking awards on partner airlines.
They’re still really useful for business class awards to Australia on their partner Virgin Australia (not for their own flight to Sydney).
At least if you’re originating in Los Angeles, or are willing to buy tickets to and from Los Angeles (or can fly Delta ‘partner’ Alaska Airlines there). Actually finding corresponding connecting award space on Delta is a… challenge.
How long can this great deal last?
Because other Delta partner awards are drying up. And not because those partners have gotten tighter with award space.
Delta miles used to be very useful for booking awards on Air France, which has always offered great space. Air France still makes outstanding award space available. You can book the space with Air France miles. And you can book the space with Alaska Airlines miles. But good luck redeeming for it with Delta miles.
You would expect Delta to have better award space on Air France than Alaska does. Delta and Air France are joint venture partners. Ostensibly they’ve got flights that are ‘metal neutral’ and share revenue. At the very least you would be able to redeem for the same seats with Delta miles that you can with Alaska miles.
But you can’t.
And I think I may have been a bit off previously in my understanding of why that is. Oh, for sure Delta is blocking access to the seats. Delta has described the issue as being due to pricing (which is true). I assumed that Delta just wasn’t willing to pay as much for the seats as Air France charges everyone else. That may not be exactly what’s happening.
When Delta came out with their new revenue-based mileage-earning chart, they didn’t come out with their new award chart at the same time. After much haranguing they introduced the award chart for flights to or from North America, and not the rest of the world.
It sure seemed like they had been hiding the ball, and then they introduced the chart and it wasn’t awful — not a ton of changes at the saver level compared to what we have now, but with 5 levels. Delta says they didn’t’ want to overload information. I wonder whether the chart really wasn’t done when they announced the earning changes.
Delta had planned all along to go truly revenue-based on the redemption side, effectively eliminating the role that award charts play for booking tickets on their flights. But:
- They faced technical challenges. You’d think this would be easy. But they can’t even get the current award booking engine to price things correctly.
- And they may have backed off of the goal out of fear that high value members would bolt for competitors, since taking away award charts means taking away the chance to get real value out of miles.
The technical challenges would have been bigger if Delta hadn’t planned to offer a fixed value per point but to price awards dynamically. I’ve been told that was the plan, and it’s far more complicated if you’re going to vary how much a mile is worth (hint: it wouldn’t have been a lot in any case).
I still believe they will get there. And the reason is that they’ve apparently been renegotiating their contracts with partners – at least with joint business venture partners Air France and KLM – to give them access to any seat with points.
Delta would pay their partners a percentage of the lowest price for a ticket to their partners in exchange for any available seat, and the idea was they’d price the award accordingly. (For instance, I imagine a $2500 ticket might cost Delta $2000 and cost members 200,000 miles or likely materially more).
There may be terms that include some saver space at a lower price point, or Delta may be required to make a minimum amount of Air France inventory available to its members as part of Skyteam.
But to the extent these new contracts are already in place, negotiated in anticipation of going revenue-based on the redemption side and not just the earning side, Delta doesn’t want to pay such high prices for partner seats. So they block the seats.
Air France may be making award seats available at the saver level. Delta won’t let members have them. And it’s possible that the seat is available to Alaska Airlines more cheaply than to Delta, because Delta put together a new contract that caused the seats to cost them more… but pulled back from the edge of the reason they had done so.
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