In this post I am going to offer some possible insight into what’s going on with Delta Skymiles — award availability, and the future of redemption — based on conversations with several different knowledgeable people regarding the transition to a revenue-based program and the agreements they have in place with their partners.
None of those people shared the full picture, so it’s possible that this is slightly off but nonetheless I believe it’s at a minimum directionally-correct.
Delta miles used to be great. Ok, not great, but they used to be much more useful than they are today – for booking awards on partner airlines.
They’re still really useful for business class awards to Australia on their partner Virgin Australia (not for their own flight to Sydney).
At least if you’re originating in Los Angeles, or are willing to buy tickets to and from Los Angeles (or can fly Delta ‘partner’ Alaska Airlines there). Actually finding corresponding connecting award space on Delta is a… challenge.
How long can this great deal last?
Because other Delta partner awards are drying up. And not because those partners have gotten tighter with award space.
Delta miles used to be very useful for booking awards on Air France, which has always offered great space. Air France still makes outstanding award space available. You can book the space with Air France miles. And you can book the space with Alaska Airlines miles. But good luck redeeming for it with Delta miles.
You would expect Delta to have better award space on Air France than Alaska does. Delta and Air France are joint venture partners. Ostensibly they’ve got flights that are ‘metal neutral’ and share revenue. At the very least you would be able to redeem for the same seats with Delta miles that you can with Alaska miles.
But you can’t.
And I think I may have been a bit off previously in my understanding of why that is. Oh, for sure Delta is blocking access to the seats. Delta has described the issue as being due to pricing (which is true). I assumed that Delta just wasn’t willing to pay as much for the seats as Air France charges everyone else. That may not be exactly what’s happening.
When Delta came out with their new revenue-based mileage-earning chart, they didn’t come out with their new award chart at the same time. After much haranguing they introduced the award chart for flights to or from North America, and not the rest of the world.
It sure seemed like they had been hiding the ball, and then they introduced the chart and it wasn’t awful — not a ton of changes at the saver level compared to what we have now, but with 5 levels. Delta says they didn’t’ want to overload information. I wonder whether the chart really wasn’t done when they announced the earning changes.
Delta had planned all along to go truly revenue-based on the redemption side, effectively eliminating the role that award charts play for booking tickets on their flights. But:
- They faced technical challenges. You’d think this would be easy. But they can’t even get the current award booking engine to price things correctly.
- And they may have backed off of the goal out of fear that high value members would bolt for competitors, since taking away award charts means taking away the chance to get real value out of miles.
The technical challenges would have been bigger if Delta hadn’t planned to offer a fixed value per point but to price awards dynamically. I’ve been told that was the plan, and it’s far more complicated if you’re going to vary how much a mile is worth (hint: it wouldn’t have been a lot in any case).
I still believe they will get there. And the reason is that they’ve apparently been renegotiating their contracts with partners – at least with joint business venture partners Air France and KLM – to give them access to any seat with points.
Delta would pay their partners a percentage of the lowest price for a ticket to their partners in exchange for any available seat, and the idea was they’d price the award accordingly. (For instance, I imagine a $2500 ticket might cost Delta $2000 and cost members 200,000 miles or likely materially more).
There may be terms that include some saver space at a lower price point, or Delta may be required to make a minimum amount of Air France inventory available to its members as part of Skyteam.
But to the extent these new contracts are already in place, negotiated in anticipation of going revenue-based on the redemption side and not just the earning side, Delta doesn’t want to pay such high prices for partner seats. So they block the seats.
Air France may be making award seats available at the saver level. Delta won’t let members have them. And it’s possible that the seat is available to Alaska Airlines more cheaply than to Delta, because Delta put together a new contract that caused the seats to cost them more… but pulled back from the edge of the reason they had done so.
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Last week I was trying to book a Business Class sale fare on Air France, Toronto-Singapore, through Delta and I could not. This was for a paid ticket for $3,400 CAD RT. I was going to pay the change fee on an existing DL booking that I had. Delta was the only site that did not have the fare – airfrance.com had it, as did KLM.com and all of the OTA’s. So, this lack of inventory issue seems to go beyond redemption tickets. Delta wanted to charge for $8,500 CAD for the same fare that was $3,400 on airfrance.com.
I lucked out. I booked slightly less than optimal times (Wednesday to Wednesday instead of Saturday to Saturday) over Memorial Day Weekend 2015 using the last drop of Delta Miles. 2 non-stop LAX-FCO on AZ and 2 AMS-CDG-LAX return on AF, all in business.
I will say though that availability dried up substantially on both airlines once the middle of May came into the window.
Availability per ExpertFlyer, not Delta.
I suspect it’s all about getting redemption costs down to the point where the “miles business” becomes profitable in its own right. At that point only the Lemmings should care. And United is just copying them at every turn, though with inferior IT.
Notice that the worst changes of Frequent Flier and Hotel points programs are happening under Obama. No surprise.
As a Diamond, Delta miles are extremely valuable for domestic flights. I hope that doesn’t change next year.
ED the main reason is because the economy is getting better, and the Hotel and Airline programs don’t need to go out of their way to win the business. If that’s Obama’s fault I think he would gladly take credit
Is Delta still offering all of Alaska’s “low” award availability? If so, that’s probably the best use of Skymiles (it’s not much, but it’s something!).
I’m noticing the same trend with other partners. Like I used to use United.com’s website to search Aer Lingus availability to use my BA Avios points with. The problem is that BA now won’t offer as many Aer Lingus seats as UA will (it seems to be limited to 2 per cabin per flight). The same with Air Berlin; BA only wants to buy 2 seats per cabin per flight.
The golden era of “partner rewards” seems to have passed.
Please don’t forget you came up with the term “skypesos” to describe Delta miles.
But @ED aren’t FF and hotel miles like a sort of “handout”? Or, more accurately, aren’t they really “stimulus” – pumping some currency into the system in hopes of generating a multiplicative effect on consumer spending? Wouldn’t a reduction of stimulus without an adverse effect on the market in question be a good thing in your eyes?
Interesting insights…
“But they can’t even get the current award booking engine to price things correctly.”
Ouch! Sounds like you don’t trust the world’s most rusted airline.
And your friend Suzanne will save us all.
Right.
I’ve redeemed for Delta now only twice in my life–once with Amex MR transfer for Delta SNA-ATL-FCO round trip and once with Amex MR transfer to AF for Delta LAX-JFK-TLV and AF TLV-CDG-LAX. For all the comparisons everyone tries to make between DL and UA being just as bad, the fact is that I can ALWAYS use UA miles to find UA premium awards and ALWAYS use UA miles to find premium awards on Star Alliance partners (even more so after the devaluation, coincidentally). I can find First Class on UA and on Star partners, too.
To me, there is no comparison. DL has horrible award availability for international flights on its OWN flights and even worse for its partners. DL doesn’t even have First Class on its own flights, and its BusinessElite isn’t as good as UA First–at all. DL doesn’t even allow you to use its miles to anything better than Business on its partners, if you can even find the award!
There is a reason they are called Skypesos. DL miles are the most worthless of all FF programs for any major airline in the world. Period.
These are some bold accusations. Source?
I noticed I April that I could also not book KLM flights that partners like Alaska were displaying. This problem is not limited to just Air France.
@ Bill, Amen to that.
Trying to get award space to Greece. Yes, there is space every day … but only at their HIGH level which is more than double the saver level (and only in economy anyway). What’s the point if there is no space at all at saver level.
I think Bill said it all!
@Mike “based on conversations with several different knowledgeable people regarding the transition to a revenue-based program and the agreements they have in place …”
I was so excited a year and a half ago. I had virtually emptied my Delta account. Got saver business class award to Sydney. Even managed to put together saver seats that got me from Madison to LA. To top that all off, I ever managed to get a flight from LAX to SYD on DL metal rather than Virgin Australia both ways.
I then turn around today and somehow the Skymiles creep has found its way back into my airline balances. Now, I have to start all over trying to find a good use for the miles I have left. Ugh. The annoyance of figuring out their system is almost more than the joy I get for snagging the seats I want.
I really wish I had skipped that big DL Amex signup bonus and just gone with a card with miles that work for something. Hell, I can’t even fly Madison-Fargo in January on these things.
Very interesting. If they do plan on devaluing their miles that much more, they’ll drive away all remaining loyalists and make miles worthless (which might be their goal). I still find it suprising Delta wants to ruin their moneymaking SkyMiles program though,especially with increased competition from far superior foreign carriers.
I don’t suppose they can run an airline on one giant hub, but those of us in Atlanta don’t have much choice but to stick with D. Delta is pretty much the only game in town for us. It’s nearly impossible for us to collect miles with anyone else except on CCs. We’ve just become accustomed to having one free economy flight for every 12-20 flights we pay for, and aspirational European F awards are once in a lifetime dreams. It took me 15 years of flights to earn my F to Hawaii. At least they don’t expire! (Which is only fair, since it takes years to earn a trip.)
Do you recommend that we burn our miles in anticipation of this? And plan to move to another program?
Time to just burn on “whatever” those skypesos I’ve had lying around for a long time never finding a seat I want. What a useless program.
Anyone who claims that Skymiles “are the most worthless of all FF programs for any major airline in the world. Period.” clearly hasn’t looked at how Qantas and Air New Zealand have gutted their programs. DL and UA are playing catch up but still have a way to go before they approach the worth(lessness) of Qantas Points or Air New Zealand Air Points.
@gary the real question… Is there a suspected time table on this change so I can know when to light the bonfire?
I do not have experience with Airfrance but I can always book domestic award tickets at low to medium levels. Just took wife to Hawaii FC and it took way less than 15 years. Took about 6 months for me but granted I fly non stop. Great flight also and welcomed by Delta Rep when landed at Lax for a long layover. I know they are not the most valuable but you can earn plenty and get some good trips domestically. 3 family trips so far this year. Can’t wait for skymiles 2015 either as I will earn so many more points as a segment flyer.
Bill-it seems you should have included a link for that post given that that level of hyperbole usually comes from a paid agent.
SkyMiles is dead to me. I don’t give it a second thought — except when you raise it in your blog, Gary. When flying Delta is the clear best choice (for routing, cost, or other reasons), I put my miles in Alaska. (I definitely won’t fly Delta enough to make elite, so that’s not an issue for me.) I would be fascinated to know (if there’s any way to know) the impact on Delta of its SkyMiles actions. I can’t be the only frequent flyer who has responded as I have.