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