Delta Laughs in Your Face, Adds Huge Cash Co-Pays to Virgin Atlantic Business Class Awards Without Notice

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)

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. Even before this happened, anyone who was still trying to get honest value out of the Skymile program was an idiot. They got what they deserved.

  2. Their ceo sucks up to trump like there’s no tomorrow and he feels he can stick it to the customers too, just like trump does.

    Maybe if more uneducated, stupid, ignorant deplorables fly delta, he can pull it off too…

  3. You were pimping their credit cards a few days, you are a hypocrite of the highest magnitude. Only money talks with you.

  4. @CJ sounds like some bitter Hillary voter/main stream media anchor.

    Now to the point….
    Delta now has it’s BA. All they need to do now is make the award searching for TATL only turn up Virgin Atlantic flights through LHR like AA.com does. Just one more reason to not fly Delta. I get that they have a building full of accountants that are sitting around like a bunch of Las Vegas Strip hotel owners trying to figure out a way to nickel and dime customers but come on already. Enough is enough. I hope they end up like Kmart #strawthatbrokethecamelsback

  5. Might as well add them to domestic flights on their own metal while they’re at it… I bet only then will actual saver space finally open on a consistent basis.

  6. Glad my wife and I had a VS award from LHR last week. Enjoyed it very much, including the Clubhouse at LHR. Probably now the last time – burning through the last of 4+ million SkyPesos that we had earned over the years. AS keeps looking better and better and better. If only they’d match my lifetime DL status.

  7. As of yesterday you were recommending apps for their cards. Now this? Glad I didn’t bite.

  8. >>We know that American and United are having trouble meeting credit card signup goals<<

    We do? Would you care to source that? I read piles of credit card stuff, and I haven't run across that yet.

  9. Pull down your Skymiles affiliate links then.

    What’s really missing from the YQ debate is that by segregating it from the base fare, the airlines avoid paying 7.5% domestic tax on that revenue.

  10. Seems like you also enjoy laughing in the face of your “customers” too. One post pumping your Delta Amex affiliate links and a few days later this post? We can’t trust you either.

  11. So are you still going to keep the links to the Delta cards in your Recommended Credit Card Offers section of your blog?

  12. 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.

    Whatever school graduated you wants your diploma back…

  13. Gary-

    Quit being two faced. Pull down your affiliate link then. As long as you don’t, you are all talk and just as bad as Delta execs.

  14. Man, this really hurts the value of my Membership Rewards stockpile. I like Delta, but this destroys the value proposition of spending on any card that earns DL miles. $205,000 in spending to earn the miles portion of a TATL award. Then tack on another $1K for the copay. $205,000 on a 2% cashback card would generate $4,100 in cash that I could spend on anything I wanted. This is going to kill spending on the Skymiles cards for anyone who isn’t an idiot. Happily for Delta, there are a lot of idiots out there.

  15. Oh puh-lease. Agree with the many folks upthread calling you out on your hypocrisy. Take down your Amex Delta affiliate links, or shut up and stop pretending you give a rats ass about anything other than lining your own pockets.

    Folks are sick of your dishonesty, and they’re right to point out how bloggers pimping Delta credit cards while simultaneously grousing about Delta’s behavior are full of it.

    Time for everyone to stand up to Delta. Bloggers, take down your affiliate links to Delta Amex cards, and readers, stop applying for Delta Amex cards (I was going to but now will pass) and cancel any Delta Amex cards you have (I have had one for a decade, but will be calling to close it tomorrow – and will tell them why).

    We all see Delta repeatedly and brazenly screwing its frequent flyer members. It will keep doing that until they get a reason to stop. We all need to give them that reason – card holders, and yes, card-pimping bloggers, too.

    I’m in. How about you, Thought Leader? All talk and no spine?

  16. Wow, just the other day you were trying to encourage sign-ups for the Delta cards. And you still have the links up. If you really feel this way, stop pushing your affiliate links! Obviously you can no longer be trusted! I’ve relied on your suggestions, but this is a blatant contradiction and I can no longer trust anything you write. You have lost yet another loyal reader

  17. @Andyandy If it takes you $205k in spend to earn that many MR points, you’re doing it wrong…

  18. Nice you included “Vince” in the post.
    It’s good the 150,000 DL miles I’ve had for 3 years will never expire.
    Maybe I’ll need to sign up for a credit card just to use them at 1 cent.

    At least I got them for free paying credit card bills with the Suntrust debit card at Walmart.
    But, then , no carrier deserves any loyalty except Alaska and even their first class has a small pitch.
    DL ihappens to be the cheapest first class LAS-LAX the date and time I want to travel and I need to get 2 bags on the flight.
    I didn’t even consider the miles.
    I’m running all non-bonused spend through the Alliant 3% cash back card (2.5% after year 1).

    I’ll just buy miles when an award is cheaper.

  19. Gary, you’ve got it all wrong. Delta devalued because Skymiles were just too valuable.

  20. @Beachfan @Arzini @Alex – if Delta miles remain worth a penny, a 70k bonus is still $700. I am absolutely clear that it is dumb to spend more money on a Delta card beyond earning the signup bonus unless you’re doing the spend to help earn status. The card is still worthwhile for Delta hub captives who aren’t elites to get travel benefits.

  21. Delta is actually completely trustworthy and reliable. It, and the other Big 3 legacies, can be trusted to relentlessly exploit every possible way to transfer more and more of your (or your employer’s) money to shareholders and executives. When they say anything else — they are lying. And that’s the name of that tune!

  22. Well, at least Delta offers decent domestic saver award availability in coach, at least on the routes that I frequently fly, and sometimes at mildly discounted rates. Often times, finding saver availability on American on same or similar routes is impossible.

    I recently called to cancel my AA credit card and gave the lack of reasonable saver award availability as my reason for doing so.

    So, if you are upset with a program such as Delta’s, cancel their affiliated CC and give AMEX your reason. That is your leverage. Similarly, if you are upset with this or any other blog for alleged hypocrisy, stop clicking and reading and driving ad revenue. Leaving comments but not acting on it accomplishes little and is another form of hypocrisy.

  23. FYI the fee is now gone. My guess it will be back and this went live when it should not have. I would book ASAP!

  24. As AA, DL, and UA engage in this race to the bottom, it’s a bit like a train wreck — you can’t help but watch. FORTUNATELY, however, you don’t have to fly them!¹

    _______________
    ¹ Except in those cases where you’re trapped living near one of the legacy carrier’s major hubs where that carrier is the only (proverbial) game in town. In that case, you’re f****d!

  25. And now a day later Delta is not charging a fuel surcharge for these redemptions. Not sure what is going on, but we just went through this where you flew off the handle without getting official confirmation and a day later it was fixed. Try getting confirmation of the official policy first, because now this article bashing delta is out there and yet it doesn’t even accurately reflect the current reality of their program. Maybe it was a glitch. Maybe the surcharge will be back. Makes more sense to get an actual answer first before running around screaming that the end of the world is here. Delta seemed like a pretty crappy program to begin with yet you were pushing their cards. I’m not sure why anyone, other than people with no choice due to location, would want to go out of their way to invest in their program given their track record.

  26. I acquire Delta miles only if they are free. They are usually worth very little, but occasionally they give me great value. For example, on a recent trip to Buenos Aires I got two business class tickets from SFO to there on very comfortable flights, plus a one- way to Iguazu Falls. (The return from there was via British Air Avios). So I keep collecting the free ones, just in case. I do intend to live and travel for quite a few years.

  27. The term are they to be trusted should apply to all the majors. Should American be trusted? United? Earn the miles and make the bookings. Even Alaska raised the Emirates redemptions sharply without notice.

  28. @Bill —> what part of screen shots don’t you understand? EVERY blog posted the fact — yes, FACT — that DL was adding fuel surcharges to VS flights.

    For example, TPG: “Today brings yet another slap in the face to those who collect Delta SkyMiles. After raising partner award prices just last month — without notice as usual — the airline has now begun passing along massive carrier-imposed surcharges on Upper Class award flights booked on Virgin Atlantic using Delta SkyMiles. These are what used to be referred to as ‘fuel surcharges’ until oil prices dropped and airlines couldn’t really keep that fiction going. But rather than get rid of the surcharges, they simply renamed them.”

    And then, today TPG writes: “As of this Monday morning, though, it appears the website has now rolled back the change. The same Virgin Atlantic flights that included the surcharge yesterday are now pricing identically to the Delta flights, save the 30,000 difference in miles.

    “What’s going on here? It’s not clear. The original change may have been an IT bug, or this new revision might be the bug. Or it’s possible Delta had planned to make this change and accidentally rolled it out earlier than planned, then rolled it back. Or maybe Delta felt the customer outrage and thought the better of the change. (Alright, that last one is highly unlikely, but it’s always a possibility.)”

    THUS IT IS IN THE BLOGOSPHERE . . . .

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