Delta Dunks On Southwest Airlines Devaluation, Says Not Considering Reducing Value Of SkyMiles

Mary Schlangenstein who covers airlines for Bloomberg asked CEO Ed Bastian during Delta’s earnings call about Southwest’s no-notice 6.5% devaluation of Rapid Rewards points yesterday and whether they’d considering doing something similar.

Bastian offered SkyMiles as a contrast to Southwest, “we’re not considering that, and we’re very excited about the value [of the SkyMiles program].”

Wait, wut?

Delta devalued SkyMiles twice during the pandemic massively increasing the cost of award travel on partner airlines both times.

Travel between the U.S and Europe was 75,000 miles each way in business class in September. They raised the price to 120,000 miles each way, a 60% increase. Delta raised the price of Los Angeles – Southeast Asia to 165,000 miles one-way in business class. In contrast American Airlines will charge you 140,000 miles roundtrip.

That’s simply a continuation of what we’ve seen from SkyMiles since 2014, and really from every loyalty program has that eliminated award charts. When a loyalty program doesn’t publish its value proposition, it’s easy to change that proposition and not tell members you’re doing so. And every time a program has gotten rid of their charts they’ve found the temptation to follow the road of short-term expense reduction too tempting.

Historically Delta hasn’t paid the price for its devaluations, offering a loyalty program earn-and-burn proposition that’s worse than competitors, seemingly because of the strength of its brand. By offering better operational performance and marginally friendlier staff, customers have stuck to the airline and its co-brand partner American Express. With recent cracks on the operational performance side we’ll see whether they’re able to continue getting away with it as travel demand recovers.

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. So Bastian is now gaslighting us. I suppose that given Delta’s track record that shouldn’t exactly be a shock, but to hear that from him is disheartening from an airline that used to be pretty honest.

  2. If Delta keeps the no change fee policy, it will bring me back as before it was $600 to change 3 tickets which normally wiped almost the entire value. Still going to fly mostly Southwest though due to better customer service and bigger planes than Delta on my routes.

  3. After the Easter meltdown where Delta filled middle seats that were supposed to be blocked… after people may have relied on that seat blocking to choose DL over other airlines… I no longer find this a trustworthy company.

  4. “Bastian offered SkyMiles as a contrast to Southwest, “we’re not considering that, and we’re very excited about the value [of the SkyMiles program].”
    Oh boy. This is rich. I prefer flying Delta but their pricing in both dollars and especially SkyMIles is getting out of hand.
    Are they operating a better airline than AA and UAL? Maybe a bit. Maybe.
    But the FF program mileage requirements are embarrassing save for the odd special they run. And not just the number of miles but even availability at lower levels is virtually non-existent in most cases, particularly D1. Like zero in many cases.

  5. @ Gary — Apparently, I missed the announcement that Donald Trump had gotten a job with the Delta PR team.

  6. Southwest’s problem is that they have fixed redemption values while Delta and other airlines have moved to dynamic award pricing for flights on their own metal. You have no idea whether the value of Skymiles has increased or decreased because it is specific to each route. Southwest did not offer partner awards so there is no apples to apples comparison.

  7. Atlanta based, I have a vacation trip to & from Europe planned for early winter. Delta has one flight with two connections via KLM at 120k one way, several others on AF or DL at 165 K or 320K, nothing available roundtrip at any price. United has three with one connection via Turkish at 154K round trip and AA is two connections on more than a dozen flights (the last with BA but minimum fuel charges) at 115K round trip. That’s why I have fewer than 300,000 Skymiles but nearly 2,000,000 with AA & UA. Oh, and baseball’s All-Star game is now in Colorado which has more restrictions on voting than Georgia. Bastian is an ass.

  8. I must be odd. I fly from Milwaukee, strictly domestic except Mexico, because of the schedule, the total trip, meaning overall price and airline personnel friendliness. Southwest goes where I want at the price I want (free checked bag(s) and nice staffing. The accumulation of points is trivial to me.

  9. Like DL could get any lower. They are almost negative as they are. sticking with my AAdvantage miles.

  10. Calling Delta’s staff “marginally friendlier” compared to UA/AA is like calling Lebron James a “marginally better” athlete than Kevin from “The Office.”

  11. It’s a shame what has happened to Delta. Until the early part of this century, Delta was viewed as the most customer friendly major US airline.

  12. You do realize the points are based on the market value of the flight? Less planes are in the air because of the pandemic so the price has risen. Give it a few months as more flights are added and you will see the adjustment. Cherry picking these examples and saying the CEO is lying is lazy journalism.

  13. Airlines should do what they need to do to make safety the number one priority. They should pay more for the best equipment and to retain or attract the most conscientious people. If it costs more, so what.

  14. I used to fly to Phc with 125 k, miles then 150 k then 175 k and now whopping 325 k mile on business to Lagos. Delta will drive away many clients unless Bastien reverses course on the devaluation proposals. I am changing my loyalty.

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