Delta has made several changes to how they display award availability and pricing in recent weeks, that may point towards a whole new way of handling redemption.
It Looks Like They’re Preparing to Move to Revenue-Based Award Redemptions
They told us we were getting revenue-based mileage earning for Delta flying, but that awards would continue to be priced based on a traditional award chart (albeit with more gradations than before).
Nonetheless, several recent moves seem to telegraph another direction:
- Delta eliminated their award charts — just pulled them off the website — without telling anyone. When asked they said that members now get all they need to know from the award calendar. That suggests pricing could change and change rapidly, or at least they’re preparing for it to. Perhaps it’s a move towards real-time pricing based on the cost of a ticket.
- Delta now has 21 day advance purchase requirements for the lowest award prices in many (most) markets. Just like traditionally the lowest cash prices require advance purchase, so too do the lowest prices for award tickets. The is the opposite of how awards have traditionally worked, with seats an airline won’t sell available at the lowest prices — and the best knowledge of what’s going out empty close to departure.
- Delta eliminated extra award availability for elite members and co-brand credit card holders. That makes sense to do if redemption is going to be about fare and not availability (award inventory).
What I Don’t Get is the Timing
Delta gave 10 months’ advance notice of what their award charts would look like for travel within and to/from the US, starting January 2015.
Three months ago they released more award charts.
Why in the world would they do this? For 10 months they told us to expect what redemption would look like. They continued to tell us even as 2015 drew near. They started the year with this new mechanism in place.
And then six weeks into the year they look as though they’re on the verge of blowing it up.
I’d have expected them either to introduce new award pricing with the 2015 program, or wait a year. Introducing a new system and then changing right away… something is missing.
Could it be that they knew the IT wouldn’t be ready, but they somehow got their technology act together in a way they didn’t think possible? One thing I never trust is the ability of Delta IT to properly price an award ticket.
Why I Expect the Worst
Delta is making changes, but doing so quietly. They didn’t announce the end of award charts. They didn’t announce the end of extra elite availability. These were discovered and Delta called out on it. They haven’t announced new 21-day advance purchase requirements for Delta awards in most markets, they just did it.
If what they were doing was plausibly good for members, they’d be the first to trumpet it.
If they go with revenue-based redemption, then their miles are like money… only with no central bank or currency board, nothing at all that keeps them from changing the value of their currency at will and no history of even giving members advance notice when they make changes.
Nations work exceedingly hard to develop credibility for their currencies, to make credible commitments to fight inflation. Delta doesn’t have a strong track record of trust with its miles, and isn’t sending out any signals at all that would suggest they’re even trying to build one.
If you can earn a currency that works like money, why not just earn money instead? The whole point of miles is that you could get something aspirational at a discount, that they could serve a purpose different than money.
They’ve got a new $2 billion contract with American Express. Are they about to turn their co-brand Amex cards into 1% cash back cards where the ‘cash’ can only be spent at Delta’s whim on travel? In that case you’re far better off with a 2% card that earns.. cash. (I do not actually expect that any revenue-based redemption will wind up with a single fixed value for points. That would be far too transparent.)
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