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].”
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.