Delta’s Latest Devaluation is Even Worse Than I Thought

This week Delta announced changes to award pricing but refused to tell us what it would mean for members.

They said,

[T]he number of miles needed will change based on destination, demand and other considerations.

When I asked for clarification and more details, I was told:

I literally shared all the details I was able to share.

Since there are no longer any promises at all from Delta about what an award is ‘supposed to’ cost, we are left with whatever price Delta tells us at a given time. And all we can do is talk to their agents and start to piece things together ourselves, and make searches on their website (which still doesn’t include many partners).

Matthew started to do this. I had a look as well.

Let’s take a simple example.

According to Delta’s 5-tier award chart that went into effect January 1, the most expensive roundtrip award in the SkyMiles system was supposed to be 350,000 miles.

That was ‘level 5’ pricing for US-South Africa and for US-Southwest Pacific.

That promise — as expensive as it was — is now out the window entirely. And I do mean entirely.

Delta’s new pricing went into effect immediately for travel June 1 onward. So I picked a set of random dates for a simple business class roundtrip, Brisbane – Los Angeles.

Remember that this is booking plenty ahead, 10.5 months in advance.

The itinerary adds a ‘saver’ award seat on their joint venture partner Virgin Australia to connect up with Delta’s Sydney flight.

Since Delta doesn’t include saver award seats in when you’re booking an award at a level higher than saver, they charge you additively. Since you can only have partner awards at level 1 prices, if you book Delta at anything other than level 1 you pay extra for the connection on a partner airline.

I searched two passengers and here’s what I got.

Add insult to injury? They warn you that this is such a bargain you’d better act fast because there’s only 3 seats left at this amazing price!

(Presumably there are 3 business class saver seats available on the Virgin Australia Brisbane – Sydney flight.)

So how does this price when two people want to use SkyMiles on these random dates within days of as far in advance as you can book? 1,660,000 miles.

Note that the Northern summer is low season for Australia travel. And so you don’t think I”m somehow cherry picking dates that are uniquely expensive, here’s a paid itinerary.

At $5620.10 per person, that’s $11,240.20 for two passengers. Or — at 1,660,000 miles — $0.00677 per mile. Matthew points out it’s often a better deal to spend American Express points as cash towards a ticket rather than transferring them to SkyMiles to redeem an award. (And American Express points offer one of the lowest value ‘pay with points’ redemptions among major card issuers!)

Past advice about SkyMiles goes out the window. I once believed that no matter what, a SkyMile would be worth at least a penny, and that drove my advice on earning miles. You can still certainly do better than a penny a mile in redemptions, but I’m not willing to claim that as a floor any longer.

American Express has to be going ballistic. What sane person would put spending on Delta co-brand credit card, other than to meet the minimum spend requirement for a signup bonus? Some people will still want to spend their way towards elite status but even those folks will have to realize that doing so comes at a cost.

As I say though not every itinerary will provide as little value as this one does. Delta’s new discounted economy awards can get you 1.44 cents apiece in value.

To a 90% approximation the way to squeeze real value out of SkyMiles is booking purely on their partners, with rarely the opportunity to include Delta flights even as connections. For as long as that lasts, at least.

So I don’t care how many miles you think you earn as a ‘big spender’ under Delta’s revenue-based program, Delta Skymiles doesn’t really reward even high spenders anymore. And don’t you dare ask how much your miles are worth, because they’ve “literally shared all the details [they’re] able to share.”

Update: for those that are skeptical, have a look at Delta flights only (not partners) for one passenger, one way. Watch what happens June 1. Here’s Sydney – Los Angeles:

And here’s Johannesburg – Atlanta:

It does seem that the most expensive awards are originating outside the U.S., but I have glimpsed our future, and all I can say is: go back.

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 InsideFlyer.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 »

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  1. Not a Delta fanboy by any stretch of imagination, but what exactly has changed? One lousy routing? Check the next June from JFK. Almost all Europe is available in J for at least 2 people! SYD (why even bother with BNE) and HND from LAX are great, ICN and NRT from SEA are very good. ATL’s more sucky, but that’s the way it is, devaluation or not. Can it get worse? Of course it can, but we’re not there yet.

  2. @Brian But gutting your frequent flier program to the degree is not something that an airline in a competitive environment would do. And the government just signaled they would be investigating this. I bet Delta now wishes they did this months ago. And perhaps UA can’t make the same changes immediately now either as there has been “noise” about this for a while.

  3. @Nick – “But gutting your frequent flier program to the degree is not something that an airline in a competitive environment would do.”

    Delta has come to the conclusion, apparently, that they don’t need a good frequent flyer program. And they’re right. They are generally regarded as the best airline (in terms of operations) of the legacy carriers, and they are making money. So, in spite of their piss poor FF program, people will fly them regardless. So why WOULDN’T they gut the program if they feel they don’t really need it?

    “And the government just signaled they would be investigating this.”

    And that’s probably ALL the government will do. I seriously doubt anything will come of this collusion investigation, unless someone at the airlines was stupid enough to put in writing, “Hey, guys, let’s align our prices so we don’t beat each other’s brains out.” And maybe even then, nothing will come of it.

  4. Yes, It’s really bad. Because of this recent change I’ve totally revisited my Delta strategy going forward. We will burn the remainder of our miles (already have done a lot) and exit to American or United. I figure the 1 or 2 times a year I want to fly Delta to just take advantage of FCM and buy up. Otherwise invest the time were it is not as bad.

  5. Darth Chocolate are you there? I guess you love Skymiles even more with these latest changes since they’re driving away even more CC churners and MS’ers? Satisfied now or are you excited thinking about even more great changes coming down the pike to Skymiles?

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