5 Things Delta Told The SEC About Its SkyMiles Program

Delta filed its annual 10-K with the SEC and released it publicly at the end of the day on Friday. Buried in the 272 pages are interesting tidbits about the SkyMiles program – although they’re less transparent about it than you might expect given the $6 billion they’ve borrowed against the program.

  1. The Points Guy Says SkyMiles Are The Best. That’s what you’d think reading this sentence at least,

    SkyMiles has been widely recognized as a top loyalty program by external reviewers such as U.S. News and World Report and The Points Guy.

    What’s always bothered me the most about Delta is their disingenuous communications. For instance the U.S. News ranking hasn’t claimed SkyMiles is the best program. They haven’t said “our top X programs are among the best.” Instead when U.S. News has inexplicably ranked them number two, Delta trumpets this achievement using the weasel word that they’re “a” top program.

  2. 10% of flying is paid for with SkyMiles. This is up compared to pre-pandemic times, reflecting both the dominance of leisure travel (people spending their miles) and the large number of accrued miles, people kept earning even when they weren’t burning earlier in the pandemic. They’re often not getting great value for these miles, but they’re using them now.

    In 2021, 10% of revenue miles flown on Delta were from award travel, as program members redeemed miles in the loyalty program for approximately 23 million award tickets

  3. American Express revenue is almost back to pre-pandemic levels. American Express and Delta entered into a deal extension through 2029 during 2019 that involves American Express paying Delta more for its products. Revenue to Delta nearly hit 2019 levels in 2021, but bear in mind that at a higher per-unit cost that doesn’t mean actual miles sold to Amex reached that level.

    During the years ended December 31, 2021, 2020 and 2019, total cash sales from marketing agreements related to our loyalty program were $4.1 billion, $2.9 billion and $4.2 billion, respectively, which are allocated to travel and other performance obligations, as discussed below.

  4. Delta owes SkyMiles members $7.6 billion worth of travel. They owe taxpayers more than that (you’re not getting bailout money back, and Ed Bastian says the government has effectively committed to future bailouts too). However SkyMiles are sitting on the balance sheet to cover future travel at a value of $7.6 billion.

    At December 31, 2021, the aggregate deferred revenue balance associated with the SkyMiles program was $7.6 billion.

  5. Miles don’t expire, but they’re still betting many miles will never be redeemed. And your not using your miles is big money to them:

    A hypothetical 10% change in the number of outstanding miles estimated to be redeemed would result in an impact of approximately $140 million on total operating revenue recognized for the year ended December 31, 2021.

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. Do you know if Delta Airlines has an affiliate program for traveling related YouTubers, affiliate marketers and bloggers?

  2. I am curious whether the pay with miles ability that delta has with reserve card holders – where you can use your miles as part payment on a cash ticket – is counted in their SkyMiles redemption figures . Also curious how they account for customers who use miles to pay for top shelf liquor in the clubs .

  3. “What’s always bothered me the most about Delta is their disingenuous communications.”

    Kinda like your own, Gary?

    at least Delta proofreads.

  4. P2 just finished booking a trip to SEA from DFW on DL. Now P2 is a lifetime Platinum on AA and has a pretty sizable stash of AA miles. Why DL? (1) points requirement is almost 50K less for 1st class than AA. Sure has to stop in SLC, but pretty good considering the DL clubs far, by far outclass AA. In current today ranking: DL first, AS second and a very distant third AA. Every flight research on AA in the past month or two would result in ridiculous point requirements. Of course YMMV.

  5. Using all 4 of these — American, Delta, Southwest and Alaska — I have been able to get extremely good value in my flights this last year. By that, I mean using minimal miles. When I fly for leisure, I only look for coach. In my quest for bargains, I really can’t tell the difference between any of the frequent flyer programs. It really just depends on the destination, and which side of the U.S. I’m leaving from. I suppose for most people, some of the “value” in their favorite program is in the airline’s planes/seats themselves, or the way flight attendants treat them, or the amenities on board, or the ability to refund if plans change… But for me, I don’t care about any of those things. I figure that all flights are uncomfortable, travelling is a beast, and it’s just a means to an end. I wanna get the maximum # of trips i can. So, i represent the average consumer. And the average consumer really doesn’t care what frequent flyer program we use as long as we can get trips for free. Although, one thing does trump the lowest-mileage cost… it’s finding the flights that fit my tight schedule.

  6. @Tim Dunn – pre-pandemic they had 91,000 employees, I do not have any employees, so yeah I’d hope they’ve got folks in their comms shop doing proofreading. There’s nothing *disingenuous* about my communication, perhaps you do not know what the word means? (since typos and whatnot aren’t ‘disingenuous’ and that’s the issue you flag in support of your claim)

  7. The full paragraph containing the quote from DAL’s 10K is

    “Our SkyMiles program is designed to attract lifetime members and grow customer loyalty by offering incentives to increase travel with us. Our award-winning program offers a wide variety of benefits including award travel and access tocomplimentary elite benefits and services when traveling with us and our partners. As our brand has strengthened, the SkyMiles program has seen an acceleration in membership growth. We believe there is opportunity to continue this trend as weseek to elevate our customer engagement through opportunities to earn and redeem mileage credits (“miles”) as well as co-brand card offerings coupled with a strong customer experience. The SkyMiles program has a large, growing and premiummembership base. This membership base has historically resulted in higher premium revenues and more resilient cash flows for us. SkyMiles has been widely recognized as a top loyalty program by external reviewers such as U.S. News andWorld Report and The Points Guy.”

    and yet YOU wrote
    “What’s always bothered me the most about Delta is their disingenuous communications. For instance the U.S. News ranking hasn’t claimed SkyMiles is the best program. They haven’t said “our top X programs are among the best.” Instead when U.S. News has inexplicably ranked them number two, Delta trumpets this achievement using the weasel word that they’re “a” top program.”

    there isn’t a thing in their paragraph about DAL saying its FF program is the best.

    You created a narrative of your own which is contrary to the facts and then argued against them.

    THAT, not typos, is what is disingenuous, Gary.

    the real issue is that Delta had the unmitigated nerve to cite The Points Guy in its annual report to the SEC and THAT is why you have a buy up your backside.

    and DAL filed its latest 10K this past week, not pre-covid. you should be able to find the number of employees on their payroll as of Dec 31, 2021. It’s in there.

  8. @Tim Dunn – yes, read the full paragraph. They imply SkyMiles is deemed best – when the sources are not claiming that. And you have to parse their statement carefully to realize it is technically correct but misleading.

  9. No Gary you and only you are inserting your own interpretation which is not what they said. You and only you are disingenuous
    Admit you are wrong and walk away

  10. Gary: I suggest you don’t bother replying to Tim Dunn. He gets triggered anytime anything is said that is not 1000% pro-Delta. The people in Crankyflier’s forum got sick of him.

  11. I’ve really found out how useless SkyMiles are over the past year and I just want to liquidate them as fast as I can.

  12. One of the biggest blunders I ever made was not using 75k skypesos for 2 F tickets to Maui in the mid-90s. Probably wouldn’t get even a one-way seat now.

    Great to hear DL is forced to fill 10% of its seats with passengers who are not paying a dime. I am sure it kills them particularly with none of the high rev international biz travelers.

    Why do people continue to use their Amex DL cards when there are so many better options? I guess a sucker is born every day.

  13. Skymiles are great for us! We live in SEA where domestic fares/redemptions are frequently low & our Sky club is new & amazing. I frequently choose DL over AS & I’m OW Emerald. Deltas bid to capture AS market share has yielded all of this to SEA flyers so…YMMV I guess.

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