Update: Delta has rolled back this change… at least for now.
Last month I wrote that small children whose fathers are hunched over controls have landed planes with fewer signals than Delta gives out that their miles cannot be trusted.
A week and a half ago Delta CFO Paul Jacobson told investors that Delta miles have become more valuable since the airline moved to a revenue-based program two and a half years ago. That was laughable on its face (though financial analysts don’t usually know much about the particulars of this part of the airline business, so the room didn’t simultaneously bust a gut at the claim).
However Delta didn’t wait very long to put the lie to Jacobson’s claim again (usually Delta waits a few months between devaluations, not this time).
Delta Skypesos Inflating Faster Than Zimbabwe Dollars in 2008 for Business Class Travel to Europe
A year ago Delta SkyMiles business class awards between the US and London on Virgin Atlantic cost 125,000 miles roundtrip.
Then in August 2016 they raised the price of awards for travel starting in January 2017 to 140,000 miles roundtrip.
Last month without notice Delta increased the price of awards on partner airlines. Virgin Atlantic awards went to 170,000 miles roundtrip — or 205,000 miles for travel within 14 days of booking.
That was as much as a 64% increase in a matter of months. But Delta wasn’t done, it seems.
Delta Has Started Adding Fuel Surcharges Without Notice to Virgin Atlantic Business Class Awards
For years Delta has really stuck it to their European members, and to Americans booking one-way awards. They’ve added an “international origination surcharge” (fuel surcharges) to awards that begin in Europe. They also add fuel surcharges to certain partner airlines like China Eastern and China Southern, even originating in the U.S.
Delta has started adding massive cash co-pays to business class awards on Virgin Atlantic. These are junk fees, huge taxes on members, because the airlines ‘can’. And they’ve further debased the currency without any advance notice, again.
For many recent devaluations Delta has implemented them immediately but only for travel starting several months into the future. This change goes into effect for travel immediately, and adds nearly $1000 per transatlantic roundtrip on Virgin Atlantic.
Here’s an actual saver award for travel this coming week:
Delta of course owns 49% of Virgin Atlantic, this isn’t just a partner unilaterally imposing new costs on a frequent flyer program.
And since fuel prices are exceptionally low compared to when fuel surcharges became common (and many airlines have eliminated them), they aren’t called fuel surcharges anymore. Airlines often refer to them now as “carrier-imposed surcharges.” In other words, they are fees imposed by the airline but they aren’t even fees for anything in particular. They’re fees because the airline can.
In Case You’ve Forgotten These People Cannot Be Trusted
Delta wants to pretend SkyMiles should be spent like cash, but this is a great reminder that their miles aren’t anything like money. You can use them only exactly how and for what Delta says, and SkyMiles devalue at whim — rapidly.
Two years ago I wrote that Delta appears to think their customers are stupid, that the only thing keeping a proprietary currency with no central bank from inflating is fear that customers would stop trusting it however Delta seems to believe it can inflate at ever faster rates without consequence.
We know that American and United are having trouble meeting credit card signup goals, and that credit card co-brand deals are multi-billion dollar revenue drivers for the airlines at high profit margin. Customers seem to be catching on that airlines are offering less value from their frequent flyer programs at the same time bank programs are offering even more value than ever before.
When SkyMiles gets its comeuppance I won’t cry for
Argentina’s central bank Delta’s leadership.
(HT: One Mile at a Time)