Delta Won’t Award Miles On The Cheapest Fares Anymore – Yes, That’s A Bad Thing

Delta will no longer award miles or status credit on its cheapest fares for tickets purchased December 9 onward for travel starting in 2022.

Matthew Klint of Live and Let’s Fly declares this to be reasonable “and should not be taken as an affront.” Here, I think, he conflates whether it’s ‘fair’ for the airline to make whatever offer that it wishes transparently (even if it’s a bad offer) and whether consumers should accept a worse deal when they have a choice.

Misunderstanding Basic Economy Fares

Matthew mistakenly argues that basic economy is primarily about “compet[ing] with ultra-low-cost carriers like Frontier and Spirit” – the idea is those airlines offer less, so Delta should give less when it charges their prices, and that creates a reason for customers to spend more on Delta.

Even if ultra low cost carriers initially spurred Delta to think along these lines, that’s not how basic economy fares are actually used. They’re primarily about market segmentation.

Airlines don’t want to sell tickets for less money than a customer will pay. It used to be that airlines separated business travelers who would pay whatever fares were asked from price-sensitive leisure travelers with advance purchase requirements and Saturday night stay requirements. But those tools no longer work (and that’s largely the fault of low cost carriers who don’t impose similar rules on their fares). So Delta uses basic economy as a way to offer low fares and compete for leisure business, that business travelers don’t buy.

Delta is using its loyalty program as a way to differentiate these customers. And the move not to award miles on the cheapest fares is the flipside of another practice they already engage in, charging more miles to avoid basic economy restrictions on award tickets. Clearly applying basic economy rules to the cheapest SkyMiles awards – redeemed by members who already have SkyMiles – isn’t about competing with Spirit and Frontier.

To be sure there’s an element of convincing customers to buy up an additional $30 – $60, but the fare difference can be in the hundreds of dollars and that’s pure segmentation.

But even if Delta was using them ‘against ultra low cost carriers’ those carriers do offer miles and both Spirit and Frontier have revamped their programs to become more valuable including easier-to-earn elite status that in some cases offers more than lower-tiered status at Delta.

Matthew claims that Delta without miles is still the better choice over Spirit or Frontier, which is beside the point. It’s not as good a deal as the lowest fares on American Airlines, which matters even more. But the claim of being better than the low cost carriers is also highly debatable since Spirit’s Big Front Seat is probably the best deal in all of travel. They’ve even been adding internet to planes.

It’s Not Unfair, Delta Just Doesn’t Value Low Fare Business

It’s not ‘unfair’ of Delta, they can reward whatever they wish. There’s no bait and switch here. In that sense it’s “reasonable.”

However,

  1. It seems short-sighted not to use the loyalty marketing engine to incent price-sensitive leisure travelers – this is business they want which is why they’re offering fares at low prices to begin with
  2. It’s Delta offering less value to customers than competitor airlines

In other words, customers need to realize the bundle of value that Delta is offering on the cheapest fares is falling, and factor that when comparing their alternatives. And customers looking for the lowest price should factor how the airline values their business.

It’s ‘fair’ for Delta to value any business (or not) as they choose. But that doesn’t mean customers should shrug at the move.

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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  1. Delta used to claim that loyalty was a two-way street and when everyone was an elite nobody was an elite. When I say “used to claim” this was literally 5 years ago. As a 1.5 million miler and a 7-year Diamond Medallion, I can honestly say that Delta is useless and worthless. Gate agents can’t even be bothered to process upgrades. I’ve been on flights to the middle of no-where that had 50 passengers on the upgrade list for 1 or 2 seats in first. I’m fortunate that 90% of my flights are paid first or business. If I was flying economy, I would do JetBlue, Southwest, Hawaiian, or whatever airline made both sense and cents. Unfortunately, I am 100% hub captive so I have to keep flying Delta.

  2. The only question is how long until AA and UA do the same.
    It would be more problematic financially if AA and UA DON’T follow DL.
    Since WN gives away far more benefits to ULCC passengers than anyone else including the ULCCs, they are by far the most exposed.

    Delta has long received more revenue for its services than any other US airline. They clearly don’t see a need to attract very low revenue esp. if it allows loyal passengers to buy down.

  3. If those that buy Basic Economy fares are also those that refuse the wear masks, then you definitely do not want to have these people onboard. Let them wreck the Spirit or Frontier cabin instead.

  4. Isn’t the absurd part that we are talking about 5 miles per dollar for most people buying these tickets. So the leisure traveler who flies 2x a year and would buy the $250 ticket looses out on 1,250 miles. Those miles are in all likelihood never going to get redeemed. The elites would earn more miles and might actually buy these tickets as you still get some elite benefits. So they are just screwing the elites out of miles. That’s not competing with low cost carriers. That’s competing against yourself.

  5. Gary, Matthew pointed out that you get free checked bags, free carryon, IFE and the most dubious one, more legroom. The big front seat is nice but there is only a few on each plane. I’m a Southwest flyer…..

  6. It’s shorthand for being cheated. The Marriot Bonvoy program is so famous for it that it’s become a verb for other cheating or program falls short situations.

  7. To me, it’s fairly simple. Why have a loyalty program if you don’t give anything (miles in this case) to people to make them loyal? It’s not like Delta would be giving people a ton of miles for the amounts they pay on Delta for these fares anyway. It’s very poor optics and seems to have failed a focus group approach. Delta could rule the airline world if they played it differently which makes me think it’s because of poor management.

  8. @DaninMCI – Agreed. An airlines FF program should award all passengers something for butt in seat miles. After all, that should be what it’s about. When someone could spend 300 dollars on a TC BE flight and get nothing, but could then also spend 300 via a shopping portal and maybe get 1000 points with a shopping bonus, is a telling sign FF programs have lost their way. I’m not sure I predict the other two will follow suit. I could see UA possibly doing it and then AA keeping their pittance of an award for BE to distinguish themselves.

    Unfortunately it will just keep getting worse. We had our opportunity during the pandemic to demand a passengers bill of rights. You want money, agree to a new set of laws but as per the norm, the government caved and just padded their pockets with money and instead of anything changing for the better, it will continue to get worse. People need to travel. So when their all a crap show one really cannot vote with their feet enough to make a true difference.

  9. Gary – I too disagreed with Matthew’s comment how he would always select a BE over spirit/frontier. Frontier maybe but I would fly spirit every day of the week before buying any airlines BE fare. Because for what likely would amount to the same price. I could be sitting in one of the front seats. The big three can keep their Coke Zero. I don’t fly spirit, but have many years ago and always thought everyone’s complaints were unfounded (IRROPs aside).

  10. @DaninMCI & Shawn: I too agree with both of you about FF and loyalty. These days carriers look at it this way- if you buy a BE ticket for $300, let’s say that $300 is just good enough to cover the cost of fuel, gate, agents… so airlines do not make much, so they don’t want to give you anything. On the other hand, if you spend $300 shopping, Macys has to pay MileagePlus something so it didn’t cost airline a dime but they make profits so they give you some “UA peso”. Carriers are greedy. They always want more and more and more profit. Lots of people become free agents; not loyal to a particular carrier. Miles devalue every day. If we sit in F class of a B737 or A320, it is NOT much different than coach regarding food, services, baggage… My personal opinion is a F class meal they serve barely costs more than $25. If we pay $$$ more for just a little more legroom and a $20 meal, we flunk basic arithmetic.

  11. I think it’s less likely for AA and UA to copy this move, since both are basically moving to fully revenue-based elite qualification requirements. UA also already kind of penalizes BE by only awarding PQP, not PQF.

  12. “But the claim of being better than the low cost carriers is also highly debatable since Spirit’s Big Front Seat is probably the best deal in all of travel. They’ve even been adding internet to planes.”

    Well, Gary, I’ve been raving about BFS for years while you kept insisting how much Spirit sucks. That’s fine, it’s a good thing you’ve seen the light, finally. 🙂

    Unfortunately, Spirit has also devalued things, just like the big guys. BFS lost the recline and got twice as expensive as it used to be. $20-30 used to be normal for a medium-length flight, now it’s more like $60-75. Can still be worth it, but let’s remember that Spirit charges for every segment, so if you need a connecting flight – double that.

    I would still use Spirit for non-critical flights, but I would buy an exit seat, not BFS. And I would sure as hell avoid Delta BE. Gee, just a though of getting squeezed in the middle seat…

  13. Just stop selling ultra cheap seats then. The bargain basement fliers tend to be among the most problematic anyway so just charge higher prices and stop competing with airlines like Spirit. Honestly many of us are willing to pay more so we don’t have to fly with some of the people who opt for spirit airlines and so we don’t have to pick and choose every little service. Provide a solid product at a reasonable price and people will fly it.

  14. @Andy Shuman – I’ve been writing that Big Front Seat is one of the best values in travel for years. I haven’t been willing to fly them regularly (though I’ve flown them) due to lack of internet. That doesn’t matter to some folks, but it’s a deal-killer for me because I need to be productive during the business day.

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