Delta has begun imposing basic economy restrictions on their cheapest coach awards for international travel, as first reported by Thrifty Traveler.
- This isn’t the case in every market. Many European destinations still don’t have this.
- It means a fee for seat assignments in advance, and a fee if you want to cancel and redeposit your miles (Amreican and United generally aren’t charging redeposit fees). Paid Sky Club members can’t use the lounge when flying on basic economy tickets.
- And you may spend 20,000 or more additional miles per person each way to avoid basic economy.
Redemptions were once a reward for loyalty and so customers were treated better when using their miles. That’s why award tickets have always been more changeable, for instance, than revenue fares.
That made business sense for the airline, too — customers who have a good experience using their miles become more loyal. They start accumulating miles faster. They earn miles with more partners, generating more revenue from co-brand credit cards especially.
So it was odd for Delta to start booking its lowest-priced domestic coach award tickets into basic economy back at the end of 2018.
- The idea of basic economy was to separate leisure customers from business customers, keeping business travelers from booking the cheapest tickets
- And it was the result of competition from low cost carriers like Spirit and Frontier who were driving down ticket prices
- But SkyMiles lowest-price awards are almost by definition leisure, and they do not compete with other airlines for how members redeem their points.
This is merely a way for Delta to once again make their miles less valuable, and require more miles for even a basic airline experience.
Delta’s President has literally said he doesn’t want members to use miles to fly for free and even envisions future low value redemptions like a haircut instead. Delta has literally taken a haircut to the value of your miles. They keep raising the price of award tickets and don’t seem to be able to stop themselves.
The airline believes they’re better than competitors, and people will fly them even without providing reasonable redemption opportunities. So they don’t.
So far they haven’t been wrong! They keep squeezing money out of Amex, and hub-captives in Atlanta, Salt Lake City and throughout the Upper Midwest keep spending on their co-brand cards. SkyMiles is a dumpster fire because you let them get away with it. Every other airline suffers from lower co-brand card spend when they devalue their points, but Delta does not seem to.
How is it even possible they could get worse
Skymiles is the most profitable and valuable loyalty program in the world. While I am surprised at these latest changes, no one can argue against the success Delta has achieved w Skymiles. When the market walks away, Delta will reconsider but every other airline would die for the revenue that Delta gets
I fly out of a regional airport where United, American, Delta and Southwest all have roughly an equivalent amount of service. I only fly Delta if my destination is Atlanta. SkyMiles are worth 1 cent. Occasionally you can get a flight on a partner where there is better value but that’s hit and miss. I guess they have their loyal customers, but see no reason to be one.
@ Gary — I noticed that redemptions AFTER the 15% discount have now frequently declined to 1.1 cpm and many before the discount are less than 1.0 cpm. Deal with dishonest comapnies, and you get screwed. It will be great when we move to a nonhub for any of the big three and aren’t held captive anymore.
Sadly I’m not surprised. I was a Delta elite until 2016 when they really started to devalue the program. I do still fly Delta, but only when there really isn’t another decent option (basically ATL and MSP). Too bad because I really like the airline, but AA, Alaska and United treat their elites so much better.
I for one don’t fly Delta except when I’m trying to use up my Skymiles. But fortunately I’m not in a fortress hub city.
I am not sure SkyMiles can be termed the most valuable loyalty program considering it’s nickname alone
People don’t fly DL for the SkyMiles program. They fly for what is a generally better overall operational and service experience when compared to AA, UA and WN. If you are a points-chaser your best best is credit card points program you can use across merchants.
To paraphrase my favorite quote from the movie The Big Short – Mark Baum “Hey… excuse me! Let me ask you this: What company treats its customers that s**ttily and succeeds?” “Fine.. OK.. Delta”“
In my opinion, Basic Economy (BE) is an embarrassment for a company which makes billions every year. They should be ashamed. May it would work for someone who flies once a year and knows well in advance exactly when and where (s)he needs to go, and never changes plans. But for anyone who flies regularly, DL’s BE is a shameful trick to get your $$$. As someone who flied DL almost exclusively since 1983, I feel embarrassed for our hometown airline, one of the biggest employers in GA. And we used to be proud…
I don’t get why people are still spending on their Delta cards.
I might be being dense, so spell it out for me, because I don’t see much new. There’s no award chart, and the typical redemption (without a credit card) is around 1.2 cpp. Took me awhile to find some routes with international basic economy, but looks like redemptions on basic economy international are slightly cheaper in cash price and miles compared to regular economy. Found a few redemptions closer to 1 or 1.1 cpp in some routes, tho.
Seems like it’s just another price point for a fare tracking with a (nearly) fixed value point currency, similar to southwest. Are there some “saver fares” with higher cpp that I’m missing?
That over-the-top claim is a “projection” of Delta, the airline, onto its loyalty program. The reality is more like “Delta Air Lines is the most profitable of the US Big Three airlines in spite of Skymiles, the least valuable loyalty program of the US Big Three” (AAdvantage is only slightly better).
Carefully parse the words in what I wrote before responding because I did…
My words are accurate as written.
Value as defined by the company standards is detailed in SEC filings for every US airline.
DAL gets more from Amex and Skymiles than any other airline in the world.
and the value of what consumers get from the loyalty programs is ALSO detailed in SEC-filed financial statements.
As Gary himself has noted, DAL does not trail its competitors in the value of awards it gives and in fact leads several airlines.
You can search his database of articles for details.
I fly 2-3 weeks a month. I used to fly United and Southwest 4 years ago, now I only fly Delta. They are by far the best when it comes to customer service. I don’t use my Skymiles for free flights, I use them to upgrade my medallion status. That is a fantastic perk and I get free upgrades. Delta is #1 in my book.
Question for Gary and everyone else: Assuming that one is willing to fly anywhere in the world, but not in economy, what is the best remaining use of Delta miles? Let’s say, hypothetically, a million of them.
(I wanted to book a Saudia flight with Delta miles in 2021, but then that disappeared, too.)
I searched. I got “USELESS: Delta Now Charges Over 500,000 SkyMiles One Way For Some Economy Travel”
Is ANYONE still trying to earn Delta points via credit card? It’s an absolutely worthless waste of crediti-card purchasing. I tried to buy a N.American roundtrip ticket tonight on Delta, and they wanted 170,000 points. Are you joking?
Around the Christmas holiday last year, I tried to use my Delta points for a roundtrip from my tiny local airport to the nearest hub. (<4 hr drive). The ticket on Delta was 130,000 miles. Delta seriously thinks I need to spend $130,000 to earn a ticket costing $180.
Delta miles are worthless.
As a very loyal Delta medallion, I do not care that my miles are worthless.
I upgrade at a far better rate than coworkers on AA/UA even if I’m at a DL hub. When something goes wrong, they take much better care of me than AA/UA peers get (minus that mess right after COVID). And most importantly, the flights run on time, have great service, and don’t suck – AA definitely can’t match any of those.
Given my home airport is SEA, I could fly DL, but place them last behind AS, AA, and UA. I get as good experience on AS, can bank AA flights to AS, and UA seems to have fixed its worst issues. Plus it seems the bulk of delayed and cancelled flights outbound are on DL of late. What has DL lost? A paid often first class customer because their value proposition out of SEA is lower – at least for me – than the primary competitors.
@Tim Dunn — Like I said, parse my words carefully. I’ve said this in response to some of your comments over at OMAAT. Your arguments, while generallt factual, almost invariably convolve the performance of Delta, the successful airline company, with that of its loyalty program, whose success members and loyalty game players rightfully judge based on completely different set of standards that boil down to what is in it for them.
DL may be parlaying its loyalty program into billions in revenue from banks, contributing to its success as a for profit company, but how much of that success translates into benefits for Skymiles members when the costs of premium or even economy award seats are absolutely insane, and the clear downgrade reported in this post being yet another case of DL socking it to Skymiles members?
The distinction is not even subtle. DL the company is highly successful thanks, in large part, to parlaying its loyalty program into big contracts with banks. In that respect, Skymiles is very profitable and valuable for DL, the airline company. To “project” that success onto or convolve it with Skymiles, the loyalty program, and characterize it as most profitable or valuable from the POV of members has got to be cruelest and most tone-deaf joke of the century. It’s all about DL’s benefits and financial success and very little about “loyalty” to members. Which makes one wonder why anyone in their right mind would be loyal to Skymiles (notice that I did not say “loyal to DL”).
G’day.
My very first award ticket on Delta was in the 1990’s. I completed my outbound, but had to change my return. When I went to the Delta office (they had these back then), I was told no problem, my award ticket was the equivalent of a full fare Y class ticket. The good old days! (Now Delta does stuff like continuing to push Reserve cards touting SkyClub access when they cannot handle the SkyClub entries for the cards that are already out there. Kind of immoral or deceptive, I would say.) From a customer’s POV, the old Delta was much better than the current DL.
The big problem is that we put up with it and keep flying Delta.
@Ferdinand Magellan – book from Mexico for old pricing
SkyMiles is a dumpster fire because you let them get away with it!
Bam
DCS,
if you would like to compare the collective value of Skymiles compared to every other loyalty program and post that number here, then we will consider your narrative.
Since US airlines are REQUIRED to value their liabilities and costs from their loyalty programs, it is not a surprise what US airlines “give away” in awards.
Other airlines do a worse job of providing value to their customers than Delta – and Gary has written on that very subject.
You clearly haven’t figured out how to find the personal value from Skymiles that others find in Skymiles and which Delta provides based on its own financial disclosures.
quoting anecdotes over and over again does not establish the actual truth of how loyalty programs work on a macro basis for millions of customers involving billions of dollars worth of transactions.
@Tim Dunn “Since US airlines are REQUIRED to value their liabilities and costs from their loyalty programs, it is not a surprise what US airlines “give away” in awards.
Other airlines do a worse job of providing value to their customers than Delta – and Gary has written on that very subject.”
This is a bit misleading and I think you know that.
1. Delta fills a higher percentage of its seat miles with award passengers than American or United. That’s not the same thing as providing more value to customers, since it doesn’t say anything about the redemption prices they’re filling those seats at and it doesn’t speak to other awards like partner awards (which aren’t how most people redeem).
2. Airline frequent flyer program liability accounting is a bit of a sham. For instance the liability for a mile earned from flying is roughly 8 times as much on the books of an airline as a mile sold to a third party, not because there’s any difference whatsoever in the potential cost to the airline of that mile but because the two types of transactions are governed by different accounting rules.
so you don’t like the rules, think they are all wrong, but can’t argue with the disclosures which do say that DAL provides more award space than other airlines.
DAL does offer value as good or better than other airlines to consumers – and still ends up w/ a more valuable program to the company.
THAT is why people keep signing up for Skymiles and the program remains the most valuable.
Citing endless anecdotes rather than the big picture doesn’t change that many, many people see as much or more value in SM as other programs.
Having DL hub captives tell us how much they hate the program while still flying DL is no different on DL than other airlines. and there are choices for people from DL hubs – if they wish to connect to dozens of destinations.
Purchase decisions are a choice. and people continue to choose DL and use its SM program
@Gary – thank you very much for that Mexico info. Are there any other remaining “sweet spots” that you know of? Anyone else?
People have done award searched and then reported, as has this very site, on the insanely expensive DL awards, which take nothing away from the DL’s financial success — your one metric and justification that absolves DL of every transgression.
It’s like searching for Hilton awards, finding only so-called “premium” awards that are unaffordable and saying: “Hey, this is no big deal. Just look at Hilton’s fattening bottom line! Have you read in their Form 10K filing to the SEC the glowing reviews about how Hilton Honors, the company’s “award-winning” loyalty program, has been the primary revenue driver?”
There is the business side of things where DL is making out like gangbusters, and then there is the part where real folks go out and try to spend their Skymiles and it is a blood bath. The two cannot be convolved into just how well DL is doing financially. For members, Skymiles is not the rewarding program that you claim or seem to think it is…
” done award searches”
Some of these comments don’t seem to understand how capitalism works. The less Delta provides to its customers, both frequent flyers and others, the more profit it makes, and the more “valuable” its frequent flyer program is — to it. To say that SkyMiles is a profitable program and that it is a wretched, miserable program are two sides of the same coin.
Note that in the US, there is absolutely no serious competition whatsoever to provide the most generous frequent flyer benefits. That’s how oligopolies (or “shared monopolies”) work.
Is there any reason to sign up for the now promoted AMEX/Delta credit cards – does 60k miles get you anything? I got an offer in the mail for 60k.
It is indeed odd the best carrier in the US has the crummiest reward program. Their redemtions border on the ludicrous – 100K miles one way MSP-CUN, 250K miles one way SFO-CDG, all in economy of course. But I still prefer them over UA and AA because of the vastly better flying experience.
Just Delta trying to show their customers some love.
@ Tim Dunn
Arguably, there is much in your position that makes sense and rings true from the perspective of the airline, but, perhaps not so much from the perceptive of the customer.
From the customer angle, surely@ DCS makes some valid counterpoints?
The customers of SkyMiles are mostly not people and organisations buying airfares, they are Amex, the credit card companies and other loyalty partners buying miles within the loyalty program framework. If SkyMiles can make multi billion dollar deals to sell miles to Amex (which it reportedly can and has done well) surely that serves as some guarantee of revenue and becomes a key driver for the “success’ of the program? That driver is not necessarily coupled with airfare revenue.
Of course for that to work, the end customer must be involved in transactions accruing miles. But the responsibility for that engagement has devolved to the third party loyalty partners.
Perhaps you have the data, but if SkyMiles follows the trend of other airline loyalty programs, more miles are accrued by members through third party transactions than through actual flying. There is a real world delineation between the scenarios of airfare purchaser and credit card / other spender (although the two can occur together).
The airline itself appears to have established a positive brand position compared with the other major US carriers – good for them – FWIW I have always enjoyed the few flights I’ve taken with the airline and have absolutely nothing negative to report based on my personal experiences.
To be fair on SkyMiles (and what @ Gary didn’t mention) is that there are other examples of tiered redemption costs according to feature set. The obvious example is Avianca Lifemiles – redemption costs now vary for the same award seat depending on the package on offer.
The issue comes when a program member goes to redeem their SkyMiles. With traditional award seats now “hidden” in the mix, many members will have a shock when they see the cost in miles outputted from the dynamic pricing model, especially if they fail to locate those traditional award seats. That reality will no doubt also be catching up with members of Mileage Plan, MileagePlus, AAdvantage as they progress their dynamic pricing models and removal of award charts.
IME it is possible to find award seats in the SkyMiles system at traditional award seat pricing (aka the old award charts). Each program has its strengths and opportunities (which is fine, providing members have a mixed strategy and aren’t reliant on the one program).
BUT there is also something happening with SkyMiles redemption pricing, which does not appear to be the case for other programs.
I have run the numbers for various programs, and here is high correlation between dynamically priced rewards and their retail value. I find cases with SkyMiles wherein there is an apparent disconnect between dynamically priced award seat and actual cost of airfare, as much as a twofold difference in redemption value for dynamic rewards (not traditional). SkyMiles is using some sort of algorithm, which is not apparent from the outside looking in.
Incidentally, the proportion of seats on a plane accessed through SkyMiles rewards is irrelevant unless you are referring to “traditionally” priced rewards (aka former award chart pricing). QF recently claimed in its advertising to offer 10% of its total inventory as classic awards – that would be far preferable from a customer perspective than other airline claiming, say 15% of seats redeemed per dynamically priced rewards….;)
I wonder when AMEX becomes insolvent, having trillions of “worthless” skymiles on their books.
In the 90s and early 2000s I used to fly on DL frequently. I opened up an Amex gold delta cord and my wife and I charged our entire life on that card. We used to be able to use miles to take our family of 4 to places like Ahwaii or Costa Rica, with miles to spare. Fast forward to this year. We’ve accumulated from Amex purchases approx 450K miles. My wife and I tried to secure a RT flight from LAX to Athens, Greece for a cruise. Economy, non-promre time. Delta wanted over half a million miles for that. 10-15 years ago it might have been 80-100K. I threw my hands up and told my wife we are moving everything to our bank’s credit card that we can use for any airline, with much better value per mile. My biggest issue is trying to find a way to use my delta miles for something in the near future. I wish they were transferable.
Compared Skymiles’ award redemptions to AC’s Aeroplan. Skymiles difficult to decipher – Aeroplan very straight forward and much, much better (in terms of how many miles for what class/destination travel). Here’s what I tried – same dates;
YYZ > DAR in J
Aeroplan 220,000 points (Ethiopian)
Skymiles 860,000 points (KLM)
Not particularly scientific, but there you have it!
That is the sort of mentality that perpetuates the “dumpster fire” that’s Skymiles. From the POV of the miles/points game, which is the primary interest of most who frequent sites like this one, DL’s purported “better flying experience” compared to AA or UAis is not worth the insane award costs that the airline charges. For those paying cash, the “better flying experience” would definitely be a valid reason for preferring DL.
Old habits die hard, and unfortunately a lot of travelers are cut from the same cloth as people who keep paying subscription fees long after they have any use for the subscriptions. Also, travelers are in a pickle of a situation due to all the governmental waivers and favors granted to the 3 big US airlines in revenue-sharing partnerships with one or more European airline: fewer choices and more collusion and/or signal following (if different) among the remaining airline frequent flyer programs with a wide network of partners.
What type of idiot uses skymiles to book a free ticket? You use your skymiles to reduce the cost of the ticket. For example, I’m saving $500 flying in Delta One from Pittsburgh to Dublin
Delta will continue to steal from customers as long as they allow it. #BOYCOTTDELTA
What’s not fair is flying 1st class out of an airport that doesn’t have a lounge ….no benefit to the passenger. But if I fly from an airport where there is a lounge and purchase a less expensive seat, my platinum card is worthless
I’d be willing to bet that a good amount of Delta’s success with SkyMiles has a lot to do with the fact that they’re the only airline with 7 co-branded credit cards that can be easily churned.
While American may have a similar number of cards via Barclays/Citi, you can’t get all them all within a couple of years and then churn over and over again with rapid succession.
No need to mention UA or Southwest because Chase has a built-in deterrent, 5/24.
Alaska can be done but with only one personal and one business, they’re an afterthought for most unless you live on the west coast.
With the exception of Bilt, AA doesn’t have a 1:1 transfer partner.
American Express via all the Delta cards and then add in all the MR earning cards (that again, can be churned over and over again without so much as a blink from Amex) and it’s easy see why Delta moves straight to the top with their SkyMiles program.
Who cares about blowing 50k on a one-way, 1 hour flight from ATL to LGA when you can generate MR points faster than most can blink their eye.
I wouldn’t fly Delta, or any of the other American flag carriers unless I was forced.
That being said, if we choose to vacation in the contiguous United States, we’ll drive.
Anything to save going through an airport in America.
I understand the cabin crew’s anger at having to deal with unreasonable passengers, but I also believe the airline employees are taking advantage of the situation.