Delta’s Untrustworthy and Frequent Changes to Award Pricing
I gave Delta a pretty hard time on Friday for announcing changes to their award chart effective immediately, for travel between February and May.
They had previously announced award chart changes for travel beginning in June. The clear implication at the time was that we could use the current award prices for travel until June. But they didn’t stick to that. And as is Delta’s practice they made the changes immediately, with no notice to their members.
I do not think Delta is honest about what customers can expect and I find absolutely zero credibility in their claim that they are legally precluded from providing their members with advance notice of changes. Other airlines do it. Delta has done it in the past (what’s more their SEC filings do not include self-reporting of legal violations..). And the Department of Transportation doesn’t regulate frequent flyer programs in any case.
But Where’s the “Revenue-Based” Frequent Flyer Program?
So I don’t trust the program one bit. Nonetheless, I think there’s some good news buried here.
In March 2012 a memo was leaked outlining Delta’s plans to fundamentally change their frequent flyer program to a revenue-based system. I understand from several sources that Delta management was up in arms over the leak, suggesting it was accurate. There were also job postings related to making these sorts of changes that were uncovered.
The plan, as I understand it from several sources, was:
- To replace points-earning based on miles flown with points based on money spent.
- To charge for award seats based on the price of tickets.
Development of the program was slow going. No doubt there were IT challenges. Points weren’t going to be worth a fixed amount. Instead, awards were going to be priced dynamically and sometimes points would be worth more and sometimes less.
Nonetheless, I thought they were about ready to pull the trigger back five or six months ago. There were nervous board members at Delta, but management was pushing for this and displaying confidence.
And yet.. it didn’t happen.
These Frequent Changes Suggest a Revenue-Based Program Isn’t Close
In August they announced an award price increase. Why increase your prices if you’re going to change your system right away. That was the first sign that things weren’t moving along the way they were expected to.
Then in September Delta renamed its current award levels. As I noted at the time, why do that if you’re on the verge of replacing your award redemption structure?
And now they’ve increased award prices for travel even prior to June. Again, that has to be Delta not on the verge of implementing their revenue-based changes to points-earning and redemption.
And that’s the good news here — that Delta miles, while worth less than those of their major competitors, aren’t about to become worth a whole lot less.
If Delta Doesn’t Pull the Trigger on Revenue-Based, Others May Not Either
And that’s good news even for folks who don’t accumulate Skymiles. If Delta doesn’t go first, if revenue-based earning and redemption doesn’t look ‘all the rage’ no matter what consultants selling it at conferences say, then perhaps other programs won’t take their own plunge. US Airways and Alaska have both been rumored to be considering it.
US Airways of course either is or is not merging with American, and that puts off any changes. Alaska has invested a ton in its partner online award booking. I didn’t expect either to go first. Alaska could have most easily followed (and remember both Alaska and US Airways followed Delta with three-tiered award charts for their own flights).
So another round of no-notice devaluations at Delta could mean no revenue-based program on the near-term horizon, and that’s good for members of all programs, everywhere.
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