Delta Devalues Without Notice for the Fourth Time This Year. This is The Most Egregious Yet

Delta just devalued their miles again, raising the price of business class awards between the US and India 38% without any advance notice and with immediate effect.

Their pricing isn’t competitive with other major frequent flyer programs — American offers better availability to India and just raised its pricing to what Delta used to charge.

  • The price of Delta business class saver awards between the US and India was 70,000 miles each way. That’s been the price since the no-notice devaluation for travel June 2014 onward.

  • Now, for travel January 1 onward, US-India will be 97,500 miles each way at the saver level. There was no notice given for this change, it’s simply in effect. That’s an increase of 54,000 miles roundtrip (39%).


Washington Dulles – Mumbai, Business Class

This is Egregious Because it Happens Right Away, and It Makes Delta’s Miles Uncompetitive

In the past Delta has argued that changing prices right away for travel dates in the future is providing notice (it isn’t). In this case they aren’t doing that. They’ve changed pricing immediately, not for travel stating in March or April but for travel even starting today.


Partner Award Business Class Price for Travel Today

In contrast,

American, which partners with both Etihad and Qatar, offers better award availability to India than Delta does.

The Fourth No Notice Devaluation This Year

At the beginning of the year Delta made changes to the price of several international awards for travel October 1 onward.

You’d think one devaluation in the first quarter of 2016 would be enough for the SkyMiles program, but that would be wrong because they made no notice changes to Tel Aviv awards in March.

And in August they increased the price of Europe awards. At 70,000 miles one-way it seems inevitable that they’d also increase the price of India awards, since those were going to be more expensive than just Europe.

This is at least the fourth no notice price increase in saver business class international awards this year.

Despite eliminating award charts, Delta does have an award chart. There is saver award inventory (all partner awards are saver awards), and the price of awards is fixed when it’s available. Delta just doesn’t publish the chart of prices any longer. That way they can hide when they increase prices although they have no problem touting when they lower prices via a ‘sale’.

Delta used to refuse to give advance notice when making changes to their chart (going so far as to preposterously claim it was illegal to do so). Now they do not even give notice once they’ve already made changes.

Revenue-Based Redemptions Are Transparent, Delta SkyMiles Isn’t

Delta wants to go revenue-based on redemptions, but revenue-based redemptions are transparent. You have points worth a certain dollar amount. Here you have no idea what awards are going to cost, and they aren’t even tied to price. They’ll tell you your points are like money, and the price changes day to day, but with money you can buy tickets from Delta or United or American. And you can buy toothpaste.

The value of your money is reasonably fixed and transparent, at least you know when there’s inflation. Delta won’t even publish inflation statistics. That’s the worst kind of money, like you find in unstable third world dictatorships. The biggest problem SkyMiles faces is their trust deficit.

A loyalty program is a promise of future value for purchasing behavior today. Changes without notice renege on that deal.

Think of Lucy, Charlie Brown, and the football. You’re told that if you save your miles, there’s a reward at the end of the rainbow. As you get close, the reward is yanked away from you. It’s bait and switch.

You’re offered miles in some amount for your travel purchases today. And you’re offered miles to incentivize you to use a co-brand credit card today. And you’re offered miles for taking surveys today, or renting cars today. And those miles are incentives because of what the program tells you that you can do with them. This is the promise programs make.

Except Delta. Their lawyer told the Supreme Court that they owe you nothing for your miles. Here’s what Justice Elena Kagan said in shocked response,

JUSTICE KAGAN: I just don’t see why that would make sense. Because if I knew that it was really up to you to give me the free ticket, maybe I was willing to get it and maybe I wasn’t. I don’t think that I’d be spending all this time in the air on your planes. You know, I’d find another company that actually gave me the free ticket.

As Justice Kagan seems to suggest, would the last SkyMiles member please turn out the lights? There is a limit to how far an airline can devalue its miles.

(HT: Point Me to the Plane)

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. Gary enough with the hyperbole. You opted into the consensual terms and conditions for SkyMiles which are subject to be changed unilaterally without notice. Amazing you can’t grasp this simple concept. Besides you rarely fly DL anyway, so why do you care? Is this just to get clicks and hits and push other credit cards?

  2. Checking one way business class to Europe, partner flights no longer show up. This was not true a few months ago. How can I check on availability with other airlines such as Air France?

  3. I think it’s good bloggers like Gary publically trash Delta as it helps at least some clueless average flyers learn the truth and just maybe after a while it’ll make a difference. Delta won’t suffer at the hands of casual flyers but if enough business contracts get cancelled and enough AMEX cards are dumped, they’ll start to feel it.

  4. Josh G:
    Could you please post where those consensual SkyMiles terms and conditions prohibit hyperbole posts?
    But that’s even beside the point, there’s nothing consensual about SkyMiles sign up (or other program), those are take or leave it deals with one party stacking the deck against the consumer. Calling it by it’s name isn’t a complicated concept either.

  5. Devaluation percentage matches Obamacare price hikes. Socialism at its best in the airline industry too under “The Legacy”! If you can cough up the miles ’til drained, you fly. If you can’t, it’s “your on your own”!

  6. Gary, please don’t listen to Josh D and others who somehow think what Delta does all the time (and some loyalty programs do sometimes) is ethical and who also impune upon your integrity while doing so as well. I appreciate your posts and your thoughts everytime Delta or anyone else does this.

  7. @Josh G I laid out an argument why this is wrong. That Delta publishes terms that says they can do whatever they want doesn’t make it immune from criticism for doing so. On the contrary, I believe it’s imperative for customers to know that Delta doesn’t just say they can, but that they will.

    You seem to be suggesting what they are doing is LEGAL, which is entirely beside the point. (Under Northwest v Ginsberg you likely have no grounds to sue, but that’s simply a function of the Airline Deregulation Act’s preemption of state regulation of airlines and how the court has extended that to frequent flyer programs.)

    I’m not suggesting customers sue. I’m suggesting customers be aware, and value their SkyPesos accordingly.

  8. I still don’t get how this is allowed. How is this not illegal inducement? Miles need to be regulated as a financial instrument, which is what they really are. You are induced to spend money on their card or on their flights being promised 1/70,000th of a free flight for every dollar you spend. But they only deliver 1/97,500th of a free flight. If you did that with equity ownership or a bond, the SEC would not just fine you but revoke your license to work in the securities industry. Imagine telling a stock brokerage client you would invest his $100,000 in a money market fund and then his first statement showing only $66,000. You would go to jail.

  9. off topic: Melissa, leave politic on the side, Obamacare price hikes is not Obama’s fault, just companies that love to make a lot of money, if, not, tell me how is possible that Canada or in many European countries offer it for free?. In the US is a business, that’s simple, but please, show your ignorance in a forums, not here.

    I hope Delta start losing their loyalty customers, until a few weeks ago, the Big 3 were all equal, not anymore, looks like Delta like to be the worst FF program.

  10. This is the natural outcome when an increasing percenrage of miles redeemed come from credit card signup bonuses rather than actual revenue tickets. The programs present many opportunities to earn miles without actually flying so everyone understands that over time the value of miles will be diluted. Earn and burn.

  11. Amex must be getting really peeved at Delta. Amex buys a billion miles and Delta betrays customers so badly that Amex Skymiles cardholders switch to Chase.

    The only remaining advantage for SkyMiles is the lack of a close-in booking fee. I wonder when that’s coming.

    As to “revenue-based redemptions are transparent”, that is not true on Southwest. There are about 6 different exchange rates depending on the fare class, and the fare class is hidden from the customer. The fact that the airline uses the cash price as PART of a formula for the points price does not make the revenue-based redemptions transparent.

  12. Not that this makes the situation better, but 62,5k One Way (with very low taxes ex-USA) USA-Europe Delta award redemptions are still possible. I actually booked one last week.

  13. @ABC 70k miles or 50k miles at low cost is still worthwhile, earn and burn, there’s mention in that post of what I think about SkyMiles but I still accumulate them when cost is below a penny a point.

  14. With Delta, I guess they feel that “No Award Chart Means Never Having to Say You’re Sorry”

  15. Without question, the airlines (specifically DL) are BEGGING to be regulated on FF programs. When it happens, please remember that they caused it themselves with moves like this.

  16. well done @Josh G by lurking by your keyboard all night & strike first again! did you opted into the consensual terms and condition for getting a life? maybe you signed with the airlines.
    useless comments like that by JG helps none of those who reads the blog.

  17. I rarely read the comments. However, already have found Melissa bashing first Hillary and now Obama – completely unrelated to the subject. What a bore. How would you like to sit next to her at a dinner party. Zzzzzz.

  18. @”Thought Leader in Travel” misfires: “A loyalty program is a promise of future value for purchasing behavior today. Changes without notice renege on that deal.”

    Puh-leeze! This is the type of naive mindset that leads to the canard that there are such things as “guaranteed” loyalty perks!

    EVERY loyalty program, hotel, airline, credit card, etc, has a variant the following in their T&C:
    _____________________________
    “AIRLINE has the right to terminate the Program or to change the terms and conditions, rules, regulations, policies and procedures (“Program Rules”), benefits, conditions of participation or mileage levels, in whole or in part, at any time, with or without notice, even though changes may affect the value of the mileage or certificates already accumulated.

    AIRLINE may, among other things, withdraw, limit, modify or cancel any award; increase the mileage, cash required, applicable co-pays or number of certificates required for any award; modify or regulate the transferability of awards or benefits; add an unlimited number of blackout dates; or limit the number of award seats available to any or all destinations. Members, in accumulating mileage or certificates, may not rely upon the continued availability of an award or award level, and members may not be able to obtain all offered awards or use awards to all destinations or on all flights.”
    ________________________

    You are “guaranteed” NOTHING and you are told so up front, and that if you sign up you AGREE!

    That’s why a statement like the one from the “Thought Leader” deploring “breach of trust” or claims that there are “guaranteed” loyalty perks are mindless.

  19. Dying to see how Melissa will turn the World Series into a political rant. When all you know how to use is a hammer……..

  20. nsx, regarding “lack of a close-in booking fee” – Delta is even non-transparent about that. Until about 18 months ago, you could book the lowest cost awards (for example, 12,500 miles for domestic flights) right up to the day of travel. Now, on most routes that people actually want to fly, Delta only offers much higher priced awards if you book within 3 weeks of travel, even if there are plenty of empty seats on the plane. De facto, that’s the highest “close-in booking fee” in the industry.

  21. AMEX raises SkyPesos sign up bonus, Delta unilaterally devalues again. Gonna steer very clear of this POS program. No thanks to Delta, ever.

  22. Oh what a surprise. My DW is Diamond thru BIS travel but we’ve never once flown DL for personal travel. Not once in 5 years of her being a Diamond member. Why? Because the miles needed are so obscenely ridiculous and/or premium seats on decent routes so hard to find that we.always found better value elsewhere. And India was one of the destinations we were considering for our next trip. Good to know I won’t have to bother searching DL.

    And yes, these sorts of no notice devaluations are going to help the case for long overdue regulations for FF programs.

  23. Well, if people keep patronizing Delta and their CCs and do not push back against this nonsense, why would anything change?

  24. DCS, please shut up and start your own blog. Thankfully, I’ve finally learned to skip over your insulting remarks. You bring no value to the discussion.

  25. @toomanybooks sez: “Well, if people keep patronizing Delta and their CCs and do not push back against this nonsense, why would anything change?”

    I do not recall having ever seen a loyalty program rescind a devaluation because members cried foul. Loyalty programs MUST devalue their points or companies that run them would choke under the weight of the “financial liability” due to all the points that they issue but cannot claim full monetary credit, in $M or even $B, for a portion of the associated sales until the points have been redeemed, forfeited or simply expire. It’s why points have an expiration date; accounts get closed for lack of activity even if they still have points in them [there are options to reinstate closed accounts, e.g., for a fee]; it’s why programs flood you with offers to shop online for items not related to their basic business, etc. But nothing takes care of a company’s “financial liability” associated with its rewards program more effectively than devaluing their points. Some devaluations are necessary to keep a program competitive because their awards got too cheap compared to their competitors’, or to nurture an ailing company back to health (both of those were true for HH’s 2003 “Thermonuclear Devaluation”, and for United’s latest selective “devaluation” of their awards).

    Therefore, rather than to cry foul every time a program devalues, travel bloggers would do a lot more good by calmly analyzing a devaluation and then informing their readers about what it means for them. If there is a remedy, they would suggest it as a way to lessen the “sting”. In 2003, I had analyzed HH’s devaluation and determined that all it did was to make HH awards as “expensive” as HGP’s or Marriott’s (SPG’s remained by far more expensive), so I stayed put, while folks were jumping ship to join programs that would actually charge them the same or more for awards, unless they joined IHG or Club Carlson [which most did not] 🙂

    No, I am not on the side of the loyalty programs. I am just keenly aware of Reinhold Niebhur’s “Serenity Prayer”:

    God, grant me the serenity to accept the things I cannot change,
    Courage to change the things I can,
    And wisdom to know the difference.

    In short, I am a realist…

    G’day!

  26. Haha-the greatest use of Skymiles is for magazine and newspaper subscriptions. I usually get around 5 cents per mile.

  27. Will – shhhh. If Delta realizes you can actually get good value, they will devalue immediately.

  28. The timing of this devaluation sucks. I was going to book two one-way business class tickets to Nepal this Thursday for next year when the date opened up. Don’t have enough miles anymore…

  29. @Sam — At least you found a solution that you believe would work for YOU. Bitching about devaluations is an exercise in futility because at the end of the day, we always end up adjusting…just like you’ve just resolved to do by avoiding AMEX. 🙂

  30. @Jan — No, you shut up or start your own blog. It is tiring to have to address folks like you who have no clue what kind of medium this is. If you learned to skip over my “insulting remarks”, then you clearly are not jumping high enough because they still unhinge you.

    G’day!

  31. DCS is right, some people just hate truth. Not a big deal. We all know Delta does this, they’ve been doing it with no notice for a couple years now. Devaluations are inevitable with the growth of the credit card churning industry, it will absolutely continue to happen as long as credit card companies are buying buckets of miles and bloggers continue promoting them for a living. When Amex boosted the signup to 100,000 on the business platinum a couple weeks ago VFW and OMAAT each had multiple posts loaded with links promoting the surprise announcement, making sure everyone knew that they could have up to 8 Amex cards. I have no animosity toward Ben or Gary, they’ve found a way to make a living promoting credit cards, good for them. But it is disingenuous to make a living promoting the ever increasing and prolific mileage bonuses, and then express outrage about programs making changes to adjust to the flood of miles that are being distributed. There’s no guarantee of award availability or price just as there is no guarantee that any of the credit card churners will ever pay more than one annual fee on their CSR or Amex Business Platinum.

    I do not like the direction of these programs, not one of them. I would love to go back to the 1995-2005 era when most miles were BIS, premium awards were pretty easy to get, and pre-boarding included about 20% of the passengers – but those days are not coming back. The mileage game is now flooded with credit card miles, and credit card holders expecting benefits and award prices will have to continue marching upward if people expect reasonable redemption options.

    Delta eliminating a published award chart and making surprise award price hikes sucks but what sucks far far harder is American’s practice of turning many of their saver awards into unicorns. AA may have an award chart but their wholesale elimination of availability on most of their routes combined with their recent devaluation has had a far greater impact on me than Delta or United raising award prices, Delta awards may be going up, but the awards are much easier to get and Delta miles are also much easier to get. There’s a reason my AAdvantage balance is among the highest.

  32. The sad thing is that, unlike devalued currencies littered throughout world history, I cannot use Skypesos in lieu of wallpaper, kindling or toilet paper.

  33. Despite the outrage over Delta changing the price of India awards, both VFW and OMAAT followed up within 6 hours posting lists of their “10 Best Credit Cards” and both of them included…the Delta Amex cards. If the miles are so useless and the program is so unfair, then walk the talk.

  34. I haven’t used any Delta miles for trips in a long time. The number of miles I had to use were ridiculous. Been flying on American and United lately (miles to Hawaii on AA were 1/2 the price, and miles to London on American the same). Sad because I’m elite and I’d rather fly Delta; but hey….

    I guess they will figure it out eventually.

  35. Very bad for Amex. There’s a REASON that Bloomberg ran its cover with people worshipping a different card product.

  36. Very educational. Thanks for the post and also to most of the comment poster. DCS I appreciate your perspective as well. One more thing to throw out there:
    Convenience (home location and non stop flight availability) also play a part in how you buy your tickets. That has been huge for me lately. I moved to an area where southwest and united offer the best routes to my normal destinations. Delta would take more travel time (but I would use Delta if I could find reasonable award tickets which clearly doesn’t happen often) United is okay, but I had never flown Southwest before. And boy was I shocked at the concept of no close in fees, no change fees, no bag fees (2 bags), and most of all REUSABLE funds for even “non refundable” tickets (you don’t get money back if you cancel a nonrefundable ticket, but can use the money toward another ticket within a year of purchase date). Incidentally, If you are eligible for and get a “senior” ticket, it’s a nonrefundable rate but is fully refundable.
    Southwest policies blew my mind so much that I am almost exclusively buying southwest tickets currently if they serve my destination airport. To add icing to the cake, I have traveled enough with Southwest this year that I have companion ticket so my wife flies for free with me (well $5.60 one way in fees) for this year AND next year.

    Getting back to delta… award booking has been so ridiculous compared to other airlines that I let my Skymiles platinum status expire. I think I am currently silver from Amex spend, but I have stopped using my delta reserve card so I will be down to no status next year. I have hundreds of thousands of delta miles and maybe one day I will use them if they have a “sale” on award tickets, but I am not holding my breath.

    Delta kept my business for years after hooking me in with my first elite status on an airline (silver medallion status that I obtained from one single round trip from Hawaii to Germany). However they have lost my business due to their lack of taking care of existing customers.
    Anyway, thanks for reading.

  37. SkyMiles should be renamed Poof!Miles. I had been considering the Delta Gold card, because of the attractive sign-up bonus…but then I came to my senses. (It would have been my only card with an annual fee.) FF programs are just a shell game most of the time.

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