Didn’t Think SkyMiles Could Get Worse? They Just Obliterated Partner Award Pricing

Delta has made it clear for the last several years that their currency has no stable dependable value, and they’re not to be trusted. Small children whose fathers are hunched over controls have landed planes with fewer signals than SkyMiles has given out.

Delta Devalues More Often Than Argentina

At the beginning of last year Delta made changes to the price of several international awards for travel October 1 onward. You’d think one devaluation in the first quarter of 2016 would be enough for the SkyMiles program, but that would be wrong because they made no notice changes to Tel Aviv awards in March.

Then late in the year they increased the price of transatlantic business class 15,000 miles roundtrip to 140,000 miles with no notice. Compare to 115,000 at American and 115,000 on United metal from MileagePlus (140,000 on partners) with no fuel surcharges. Delta adds fuel surcharges to awards originating in Europe.

Delta Just Massively Spiked Prices for Partner Awards

Without any notice whatsoever, Delta has made two drastic changes:

  • Raised the cost of partner awards, so that partner saver awards are now more expensive than awards on Delta flights in (many? most? they haven’t told us) cases.

  • Introduced variable pricing to some partner awards. Until now partner awards have had a fixed cost, a partner award was either available or unavailable. Now it may be available, but close to departure might cost you more.

Here’s New York JFK – London. Delta business class is 70,000 miles (lowest) and Virgin Atlantic saver awards are 85,000. They actually introduced this back in October and claimed it was a glitch.

This is a 30,000 mile increase roundtrip, after just raising prices 15,000 miles roundtrip. Travel prior to October was 125,000 miles roundtrip in Virgin Atlantic business class. Now it’s 170,000!

But wait, there’s more..

April 25th is less than three weeks out, and there’s business class saver award space on Virgin Atlantic. That’s now 102,500 miles one-way. For transatlantic. Saver award. Words fail.

Delta is still 80,000 miles each way in business class between the US and China. But partner China Eastern sees a 15,000 mile each way (30,000 mile roundtrip) increase. Fortunately there’s no further increase for close-in travel as of this writing.

Other changes we’re aware of:

  • US-Australia goes from 95,000 to 115,000 each way on partner Virgin Australia (a 40,000 roundtrip increase)
  • US-South America economy goes from 30,000 to 35,000 miles each way on partners

There are certainly going to be others, of course Delta won’t tell us what prices have gone up because they eliminated award charts and sometimes even claim it’s illegal to give program members advance notice of changes (and silly excuse that so wrong a Delta executive promised me they’d never use again).

One Trick That Still Works for Lower Pricing

There’s a way to get the Delta metal pricing while flying on a partner however. It appears that as long as you have a Delta flight segment in the itinerary, you get the lower Delta metal price. If you can find a Delta domestic flight with lowest level award space to connect to your partner international price (and if Delta doesn’t disallow it) then you get the old saver price:

What Delta is Up To

They rolled this out while their entire airline operation is in meltdown. Their IT broke down such that customers couldn’t even pull up itineraries on the Delta.com website, but they managed to spend time and resources finding a way to deliver even less to their customers.

Delta wants to go revenue-based on redemptions, but revenue-based redemptions are transparent. You have points worth a certain dollar amount. Here you have no idea what awards are going to cost, and they aren’t even tied to price. They’ll tell you your points are like money, and the price changes day to day, but with money you can buy tickets from Delta or United or American. And you can buy toothpaste.

The value of your money is reasonably fixed and transparent, at least you know when there’s inflation. Delta won’t even publish inflation statistics. That’s the worst kind of money, like you find in unstable third world dictatorships. The biggest problem SkyMiles faces is their trust deficit.

You don’t get information to understand what miles are worth, and when they make changes Delta doesn’t play straight with what they’re doing with your miles or how that will affect you. The lack of an announcement underscores that. Delta makes changes, without (any) enough information for members to understand what those changes are or mean, and the airline’s position is that’s all the information anyone deserves to get.

What’s the message here? Delta’s President says he doesn’t want you to redeem miles for travel. Instead Delta wants you to use your miles for Dom Perignon in their club and in the future perhaps for haircuts.

They are trying to create the perfect company town. They pay out SkyMiles, and then set the prices of goods in their company-owned store. And here’s the thing, they have a monopoly in this town. So while they tell you you’re getting 1 cent per point (as though that’s a good thing!) redeeming miles for Dom Perignon, that’s based off of Delta’s inflated prices. $250 for a bottle of Dom Perignon is nuts, and so is 25,000 miles.

Except you do have a choice. I desperately want to like Delta, because of the devaluations at American. But when American announced their new award chart in late 2015, they told me they did their best to make sure the devaluations made the program not quite as bad as Delta’s. And Delta’s just keeps getting worse.

(HT: One Mile at a Time)

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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Comments

  1. This is basicly the last straw for me. I’m now extremely close to pulling our $500k budget from Delta. Enough is enough!

  2. While AA may not have further “devalued” in the formal sense, since the actual D-Day (3/22/16), they have virtually eliminated saver space.

  3. Airlines are playing the same role as central bankers have been for more than a decade: competitive devaluation (race to the bottom).

    Among the big three US carriers your choices seem to now be: use AA miles for the best rates on partner redemptions when they actually exist, use United for the best saver availabilty (also on partners) but at generally higher rates than AA saver, and wait for skypesos to run a sale on discounted toasters before redeeming. I guess we just have to be content with a strong dollar and low oil prices giving us great revenue fares.

  4. @Gary

    One would think as airlines continue adding to supply and bidding down revenue rates they’d like to increase award availability for the marginal unused seats to write-down some liabilities, but it isn’t happening. Example: there’s plenty of cheap AA tickets available on the Cuba routes where potential redemption values would be under $0.01, but still no seat availability. Shouldn’t AA (and other airlines) give people every opportunity to book award redemption at awful rates?

  5. Agree with everything you said here, Gary. BUT, as you also (wisely) wrote about earlier, Delta’s game is operational superiority: you’re going to get where you want to go mostly on time. To many (especially those who, unlike us, don’t play the FF game) this is worth more than miles they earn. That’s what Delta’s betting on here.

  6. DL’s deval strategy is truly “boiling the frog”. By doing tiny bits of piece-meal every time, there’s never an event large enough to trigger significant customer backlash or defections.

    At least a black market exists for the Venezuela Bolivar (and previously for the Weimar Republic and Zimbabwe) that exchanges their worthless currency at rates closer to reality. SkyPiles doesn’t even give us that.

  7. I just spoke with Delta about this… I was told:

    “We Understand your frustration. Our mileage tickets are all based on availability. Another travel day may get you the results you’re looking for.”

    Seeing that are we positive that all of the lower business award tickets to Australia are now 115,000?

  8. I’m surprised you can run a loyalty program with no fixed value awards — isn’t it a bit like running a lottery without telling folks what the prize is? — but humans continue to demonstrate that they are suckers.

    And, hey, you could argue that it’s better to have the award valuation be unknown than CLAIM you have a fixed price for an award but make it near impossible to claim that award (aka, no award seats).

  9. This is why I moved my spend over to Chase Sapphire. I have no interest in earning more Mileage Plus points given that it’s only a matter of time before Scott Kirby does something similar, though maybe not as drastic.

  10. To follow-up on @Evan ‘s excellent point, do the airlines seriously consider outstanding miles to even be liabilities at this point? Or do they treat them with the same gravity that the federal government treats “unfunded liabilities”? After all, is it a liability if you’re not actually liable for providing anything?

  11. “Obliterated”? That means “to destroy utterly; wipe out.” Delta may have obliterated the value of Skymiles for those wanting to redeem for partner awards, but they didn’t “obliterate partner award pricing.”

  12. @Pat they are accounting liability, ~ $4b on Delta’s books… $5b on United’s… only $2.5b on American’s (which is likely to change-increase-with new accounting rules being adopted January 1)

  13. Delta has been notoriously slow lately. On time flights are not happening anymore. My last few flights were delayed 1-4 hours because we were awaiting the flight crew or captain. You spend extra to fly at a specific time just to have it all blown away by poor planning and scheduling by delta.

  14. I have never earned a Delta mile in part because of how crappy they are with their stealth devaluations. I am flying Delta J on an awards ticket early next year but I used AF miles for it. Glad to be sitting this one out at least until/(when?) other airlines follow suit.

  15. This has been a good year for me. Two programs I’ve been tempted by – Hyatt and Delta – but never mustered the energy to go through the transition of investing my loyalty efforts into ended up being the best exercises in…let’s call it “measured procrastination” I could hope for.

    What frustrates me about Delta is I continue to see all this moaning and groaning from Delta loyalists, along with empty threats. But Henry LAX is right – nobody is willing to make good on their threats to walk away.

    Would love for you guys make good on your threats and dole out legitimate financial punishment for these decisions (especially people like “Mr. Half-million budget per year” who is “extremely close” to pulling out). If nobody punishes Delta, what is the incentive to the other airlines (and hotels) to do anything but follow their lead? Delta is going to bring this whole thing crashing down for all of us while you people all “threaten to leave but learn to adjust”.

    I can’t give them less than my zero business. Would be awesome if those flying Delta would learn to adjust to a new airline instead of learning to absorb the blows Delta keeps doling out.

  16. I am surprised that American Express, probably the largest contributor to Delta’s earnings, could not prevent massive devaluation. What credit card issuer will buy miles from Delta in the future?

  17. Had to cancel an award flight after I had emptied out my SkyZimDollars, so now I’ve got 50k to burn. Will do that ASAP and be out for good.

  18. Eventually this is all going to come back to bite them on the ass. I live in Atlanta, but of my 25 flights this year 12 have been on United, 10 on American and three on Delta. Three more united segments next week too

  19. Those who still credit their flights to Delta deserve this. You’ve been warned a while ago.

  20. Given how much AA loves to blindly copy DL, isn’t it only a matter of time until they do this too?

  21. Historically, I’ve used Amex’s Membership Rewards points for transfers to Delta. One used to be able to get good value that way. Not anymore! With my business Plat, I can pretty much get a better price AND availability just buying a Business ticket with MR points. Sheesh!

  22. You know, everybody always says that the other USA airlines copy Delta, but nobody has ever copied this no-fixed-award strategy. I’m not all that surprised, because it seems like a dumb idea to me, and I don’t really see a lot of downside for an airline to actually having an award chart (since you can still make “saver” seat inventory as stingy as you want to be).

  23. Also worth pointing out that the economy in the VS example is 5k more than Delta as well, just like South America.

  24. Sooo glad I never got suckered into earning with Delta. They insist on racing to the bottom.

  25. Not saying Skymiles are good, but for someone like me who doesn’t mind traveling in economy domestically, availabilty is much more than both American and United. Also the last few flights I’ve booked have been at 11k or 9k one way. I could care less about increased pricing on first class with partners.

  26. Thank god I escaped to Air France / KLM Flying Blu 18 months ago before I dug myself into a trench with these DL bastards. I feel sorry for anyone who has to deal with these recalcitrants.

  27. With Delta, you are lucky they don’t anesthetize you on the plane and take one of your kidneys.

  28. AA is so much worse. Not a single saver ticket virtually anywhere. And if you find one it’s on BA and is $1000 in surcharges. Delta is still better.

  29. What Jason said. Have looked for AA tix for very mundane routings and am very flexible … a joke. Months and months of nothing, weekends commonly 50k one way domestic.

    It’s been a little more than a year since I booked any serious award tix … it’s appalling what’s happened to prices and availability, pretty much across all the big 3.

  30. People will accept a lot if at least the rules of the game are transparent. Unpredictable and capricious rules on the other hand…

  31. My experience is they are really not that interested in your opinion anyways. Can’t use upgrade certificates either when you want, even if half the seats show open. That, added to the only survey I receive is whether I’d refer someone.

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