Delta announced their new revenue-based points-earning scheme last week, and curiously absent was details of what changes were going to look like on the redemption side of the equation.
Delta had told us there would be a five tier redemption chart, unlike two tiers that most programs have and three tiers that Delta has had since 2008. But that they wouldn’t reveal the specifics until the fourth quarter of the year.
Delta Made the Right Decision to Come Clean on Their Award Chart Changes
I’ve been highly critical of Delta for the decision to hold back details of changes to their award chart.
- You can’t evaluate a program knowing only how points are earned. Redemption is 50% of the equation.
- Members are earning points now that they will redeem next year, and Delta wouldn’t tell their members what those points would be worth.
Delta knew the chart, but it was a secret chart. Until now. As I shared last night, Delta decided to release details of their 2015 award chart now instead of waiting until at least October.
As much as I gave them a hard time for their initial secrecy over their impending changes, I have to give them real kudos for recognizing a mistake and being willing to acknowledge it and change course.
What We Now Know About Changes to Delta’s Award Structure — And What We Don’t Know
We already knew that we’d get miles and cash awards (no new details announced about those yet) and one-way awards for half the price of roundtrip (like American and United have offered for several years).
What’s new are the award charts for all-miles redemptions. But Delta has only shared their new award charts partially — they’ve posted a .pdf file of their new award chart but only for trips beginning or ending in the mainland U.S., Alaska, and Canada — and not the award charts for the rest of the world.
(It was only three years ago that they bothered publishing award charts for the rest of the world at all, the best worldwide travelers could do was guess what an award should cost based on what Northwest used to charge before the two airlines merged).
Delta announced a major set of award price changes back in August for travel beginning June 2014. They also couldn’t quite wait for those higher prices to go into effect, so they initiated an interim devaluation in November. Both of those changes were made without notice, and applied to bookings being made immediately.
Having done that already, the new award charts do not increase prices at the saver level. And in 3 out of 44 award categories, saver awards drop 5000 or 10,000 points.
What they do, however, is increase the number of award categories from 3 to 5 — for both economy and for business class — meaning there are now a total of 10 award categories as part of their chart, up from 6 (and compared to 4 at United and American). They’ve made it more complicated to know what to expect.
Here’s the new business class award chart, with all 5 award levels and blue highlighting where prices go down and dark grey where they go up:
Here’s the economy class award chart, with all 5 levels and the same sort of shading.
So What Does This Mean for Pricing of Awards on Delta?
We really do not know what this will mean for Delta award prices in practice. As I observed yesterday, it will be impossible to tell how this will affect travelers in 2015 until that time comes — because it is all contingent on how much award space is made available at each level.
- Will there be as much saver award space available as before? If so, this has to be seen as an improvement other than for last seat availability where prices are indisputably going up.
- Will availability gravitate towards higher categories? This would be a stealth way of devaluing the redemption side of the program. You keep the lowest pricing effectively intact, and just don’t offer seats at that level, making level 2 the de facto saver award that most customers can get.
My bet – and I cannot say this with certainty – is that over time Delta awards will be more expensive rather than less expensive from the perspective of someone looking for saver award space.
Interestingly, this chart also rolls back some of the extreme prices for last seat award availability.
Some of those prices were truly shocking, and in this chart fall from 20,000 – 35,000 miles. Long gone are the days you could just spend double miles and get any seat you want, though — South Africa business class last seat availability drops from a peak of 380,000 but is still mind-numbingly expensive at 350,000 miles.
I also expected the changes to be worse. Delta’s lowest level award prices remain roughly on par with the competition availability issues aside.
This May Not Hurt the Most Valuable Part of the Skymiles Program – Partner Redemptions — At All
Delta has decent award availability on its partners like Virgin Australia, China Southern, China Eastern, Saudia, and Aeroflot.
What Delta hasn’t been known for is decent availability on its own flights. So the real sweet spot has been redeeming Delta miles for premium cabin awards on partners, often with the biggest problem being finding a domestic flight to the international gateway city (the city from which you depart the US). And these changes on their own do not make those partner awards more expensive.
As a result this is not a devaluation at all for me because my interest in Skymiles is not redeeming to fly on Delta.
My interest is redeeming on partners and that availability only exists at the lowest level. That availability should not change, unless Delta chooses to block award space that their partners are offering (it’s certainly the case now that I can book awards on Air France using Alaska miles that Delta will not let me have using Skymiles, so there may be some of this now).
Bottom-line: The low prices are very similar to what they offered before. The high prices are what they offered before. Now there are more gradations in the middle, and the action is all going to be in what availability looks like for each. We won’t know that until next year.
It’s a more complicated award chart, but it’s not a true revenue-based redemption system, and partner awards should still be about the same as they were before. So there’s no new alarm or concern in the award chart at this time.
I do wish, however, that Delta would release the rest of their charts for travel between other regions of the world than the US 48 states, Alaska, and Canada.
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[…] mentioned of any change to partner awards, which is what had me most worried. View from the Wing reports Delta sources as confirming nothing will happen to partner awards as part of this particular […]