Delta Award Sales Expose the Egregiously Low Value of SkyMiles

During Delta’s earnings call the airline’s CEO said miles are worth a penny apiece. He explained the new upgrade upsells they’ll be offering post-purchase, and miles are money: “we’ll have an offer for you that would be 17,000 miles for you or it’s a $170 in cash.”

There was lots of excitement this week over a Delta first class award sale for Thanksgiving starting at 8000 miles or $99. That is a good deal — 1.2 cents per mile.

  • Business travelers aren’t flying for work over Thanksgiving, demand for domestic first class drops.
  • Only Boston – Buffalo on a regional jet was actually $99 one way for first class.

What Delta has done is adjusted its mileage program so you get more consistent average, low value. Programs with fixed award charts might still charge 25,000 miles for a domestic first class saver award seat even when it’s selling for $99 because it would otherwise go empty. You just pay cash instead of miles when the mileage deal is bad but the fare is cheap.

With Delta you aren’t going to get great value for your miles, but you can still get a penny a mile when fares drop. They don’t have award charts, and they’ve been driving towards a revenue-based program where miles have consistent (low) value.

Don’t confuse that with delivering value to members. Delta will call a 34,000 domestic coach roundtrip a ‘sale’. They call 75,000 miles roundtrip in coach between Atlanta and Honolulu a sale.

When they call 27,000 and 28,000 mile awards a ‘sale’ that just underscores how little sales make sense in the context of Delta which no longer respects members enough to publish regular prices.

They’ll run sales for just 5000 miles one way but you’ll often find these are for flights you can buy for less than $90. In other words you’re still not getting 2 cents a mile in value from Delta even on these 5000 mile sales.

Delta currently is offering a rare business class award sale to Europe (HT: Joe Brancatelli).

  • The ‘sale price’ is 188,000 miles roundtrip. That’s insane.
  • This ‘sale’ is only available for travel during off-peak winter months. It requires 60 day advance purchase and a Saturday night stay to get the ‘deal’.
  • American’s business class published price is 115,000 miles, United’s is 120,000 miles (for their own flights)
  • Air France KLM’s Flying Blue will let you book the same Delta awards for around 125,000 miles roundtrip — one third fewer miles than Delta’s ‘sale’ price. Korean Air charges 80,000 miles roundtrip for the same seats (plus fuel surcharges).

Delta has been driving value to those who:

  1. want to fly economy as their reward (they still charge as much as 100,000 miles one way for business class to Europe at the saver level)
  2. will choose where to go based on Delta’s sale
  3. can act quickly and spontaneously in making their booking whenever a flash sale comes up

Most people start with the destination and look for the reward. They book well ahead, around their lives and schedules. And heaven forbid they want their reward to involve greater comfort..

To be clear these award sales are nice. They provide more value than Delta offers without the sales. That doesn’t mean that they are offering great value, or better value than competitors, overall or for the majority of members.

One way to think about this is the opportunity cost of earning miles. If you fly Delta despite the value of SkyMiles, sure just figure on using them at around a penny apiece. But why on earth would you choose to spend money on a SkyMiles credit card (unless you’re using that spend to help you earn status)? Even a 2% cash back card would get you nearly double the value. Delta ‘sales’ underscore how uncompetitive SkyMiles is in delivering value to members.

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. Oh wow a delta sale ?
    That’s amazing let me empty my Membership Rewards account
    Maybe I can get that Delta 500k one way business class seat to Sydney too
    Awesome I love getting burned and ripped off

  2. Until the early years in the 21st century Delta was known to be the most consumer friendly airline. Clearly times have changed.

  3. You hit it right on nose Gary! I can’t agree with you more!! Those so called Delta sales are nothing more than garbage and worthless flights!! Bastards!!

  4. @Allen. Delta IS the most consumer friendly airline, or at least the most customer friendly. Their mileage program, on the other hand, is a joke

  5. I consider myself a fairly dedicated hobbyist, but since burning up all of my Delta miles a few years ago SkyMiles is one currency I am not at all focussed on rebuilding. The program has all sorts of arcane, arbitrary, and unknowable rules such that redeeming feels like a total sucker’s game (and I don’t feel much differently about Flying Blue). One has little idea when earning miles what they will be worth in concrete awards or how many it will take to get somewhere I want to go. My last trip from North America to Asia I had reasonable options on OW and Star, but the Delta site quoted me 1 Million Miles roundtrip for my itinerary (that was for one seat)! A joke.

    I have no DL branded credit cards and fly DL only when I have no choice. It’s just a crap program, not worth playing the game.

  6. @ Gary — As much as I think Delta’s executives have ripped off billions from long time loyal customers, I think the miles are still worth 1.2 cpm, but at a fixed rate. I sincerely hope some of these executives get what they deserve for screwing over their customers.

  7. I still think Skymiles are worth more than AAdvantage miles most of the time. The sunday after thankgiving, every flight on AA is 75000 miles domestic one way.

  8. Except that their “sales” are not really sales, but a feature. If you play with their engine, they keep these “sales” prices even after they end. Skymiles has evolved (or devolved) into an Avios-type program where you can still find excellent value in certain types of flights in economy. I personally welcome this. They don’t want us pay miles for the forward cabin, fine — I don’t buy F or J with Avios either. And, by the way, if you want to buy Business with SkyMiles, you still can — just forget North America. Garuda comes to mind, still a good value.

  9. Yet Delta continues to be the most profitable airline. When your product is in demand, you can and should charge more. I would and so would you.

  10. The ironic thing, though, it has been for us that despite all of this, I still find myself looking at Delta first (even though I am in DFW and being lifetime Platinum on AA) because the service and the options on One World to Europe… Seriously… AA, BA or Iberia… Are you kidding me?

  11. “What Delta has done is adjusted its mileage program so you get more consistent average, low value.”

    Excellent analysis in this article and this sentence sums it up. These ‘sales’ are mostly illusory, and factoring in taxes and fees — sometimes quite higher than what you’d pay on a “normal” award ticket — they’re not a good value.

  12. The Delta sales are typically not sales as already mentioned. There ARE some actual sales now and then, though.

    Last year they had D1 (business) sale to Europe – for like 3 days.

    Got 2 tix to MUC for 96k miles each. They were selling for like $3k at the time, so that was really a sale.

    Last good one I’ve seen, though.

  13. Delta miles can be an excellent value if you are not insistent on redeeming them right now and for a very specific flight. We continue to redeem sky miles for close to 2¢ each, but no there are times when we don’t redeem because the value isn’t there.

    Gary’s blog has devolved into little more than one Delta rant after another. Bring us some useful information if you’re going to add value to this topic.

  14. I just finished a round-trip non-stop JFK-Toronto departing last Sunday and returning yesterday evening on Delta (operated by Endeavor Air). It was a rewards trip: 17K Delta-miles +$53.81 taxes and fees for a rewards main cabin trip. At the time I booked it (9/28/18) I thought it was a good deal for the ~2hr flight. As it turns out, my Diamond Medallion status got me upgraded to First on both segments (and I gave the upgrades to my wife that was traveling coach for her employer; I was her “accompanying spouse”).

    I don’t feel ripped off at all. In this case, Delta’s been pretty good to me (and I’ve been very loyal in return).

  15. @Greg – considering that prior to the latest Citi/Barclays deal the average price American was selling miles for was 1.2 cents, that the price they are selling miles to their biggest buyer has gone up since then, while I do not know the actual price that amex is paying per mile i am going to guess it is slightly more yes.

  16. I cleaned out my and my wife’s SkyMiles account for C tickets to Italy in 2014 just before a devaluation (back when there were DL award charts). I dumped my SkyMiles AmEx for an AmEx that earns Membership Rewards points. Although I was a silver and gold medallion SkyMiles member for a number of years, DL quite apparently no longer places the same value on loyalty and is no longer interested in my business — why would a thinking person with a choice choose what it’s done to SkyMiles? — so it doesn’t get my business. Other airlines provide a better product on international routes and a comparable product on domestic routes and most of those maintain a frequent flyer program as a loyalty incentive that offers better value and on which one can make plans. On the rare occasions when routes, schedules, or other factors make taking a DL flight necessary, I put the miles in a partner airline’s (superior) FF program, usually Korean. Even airlines like Spirit attract some fliers, so I’m sure DL will continue to attract some. “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.”–John Ruskin. And, of course, there are some fliers who, because of flight routes, the unavailability of other airlines at their home airports, and other factors, are DL captives. My sympathy to them.

  17. Good analysis, if a bit disheartening. Personally, I don’t mind Delta only providing one cent value per mile if they sell miles for one cent each. It would be like Disney Dollars.

  18. This year got 28,000 mile round trip LAX-ZUR on an award sale. Also 17,000 round trip LAX-BOS on an awards sale. Both economy but upgraded instantly to comfort as a diamond. SKYMILES now has value.

  19. Yep. I was doing ok with sales, got several 70k one way to Europe. But haven’t seen any of those in a while. Was spending a lot on delta cards for gold status but am giving up on that to avoid collecting a lot more points. I usually fly first anyway, except with the companion ticket, so I dont benefit from gold. I can’t believe people are dumb enough to redeem at 1c value. Even when you earn at 1.4 or 1.5 with the cards, it’s so much worse than cash back.

  20. One plus of fixed pricing is open availability. Who is complaining about Southwest and JetBlue’s programs?

    For people with money (theirs or OPM), I am increasingly believing that fixed pricing provides better opportunities.

  21. Well, I’m not so negative about DL’s “sales.” I’ve booked myself and several family members on various trips to the Caribbean this winter averaging about 18,000 Skymiles roundtrip each. These are tickets that would cost about $500 each.

    It kind of depends on what you want to use your miles for. You seem like a “fancy pants” traveller, who’s not willing to do vacation travel in coach. In that case, yes, the DL program sucks. But if you’re an opportunistic traveller — say, somebody who thinks a cheapo winter trip to Turks & Caicos sounds like a good idea when there’s a “flash sale” — the DL sales are a good deal.

    I don’t use Skymiles as my primary loyalty program. I don’t think it’s very good for that. But, with these sales, it definitely fills a valuable niche. Kind of the same way BA’s Avios program fills a niche. I’m WAY more interested in accumulating Skymiles than I was before — because before these sales, I wasn’t interested at all.

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