During American’s third quarter earnings call they emphasized that they would begin aggressively upselling customers after purchase. The model here is Delta. After you buy a ticket they still have the opportunity to market seats to you and upgrades, and even sell miles. Why stop after you’ve made your purchase, or wait until you check in?
During Delta’s earnings call they charted their path to more upsells: allowing customers to pay with miles wherever they are trying to sell something for cash.
No other airline does more to treat their miles as a hyperinflated currency, where a lot of miles buy exactly what you’d get for cash (like basic economy).
Delta’s CEO told analysts to expect miles to be worth a penny, “if your company buys you a coach ticket and you want to sit in the Premium Select cabin, we’ll have an offer for you that would be 17,000 miles for you or it’s a $170 in cash.”
Just like with their explanation for basic economy awards, the reason they’re doing this is because “you asked” for miles to be worth so little. And miles are actually more valuable even as the value per mile falls because you can use those miles in more ways. According to Delta’s Senior Vice President who oversees SkyMiles,
Whether you’re just starting to build your SkyMiles account, or you’ve been collecting miles for years, Delta is making all of our Members’ miles more valuable by offering more ways to use them for Delta purchases, big and small..Our ultimate goal is for SkyMiles Members to have the choice to use miles anywhere they can use cash with Delta, and to be able to make those transactions available in digital channels.
There are two major implications to this. First, Delta will sell incrementally more upgrades. That will make complimentary elite upgrades and confirmed upgrades more difficult to get, as some of the seats that would have gone to those will be sold to other customers spending miles instead.
Second Delta’s mileage upgrade awards are already crazy expensive. We’ll see whether post-purchase mileage upgrades will ultimately replace Delta’s hidden mileage upgrade award chart — whether mileage upgrades will always be simply priced based on fare.