This week Delta announced changes to award pricing but refused to tell us what it would mean for members.
They said,
[T]he number of miles needed will change based on destination, demand and other considerations.
When I asked for clarification and more details, I was told:
I literally shared all the details I was able to share.
Since there are no longer any promises at all from Delta about what an award is ‘supposed to’ cost, we are left with whatever price Delta tells us at a given time. And all we can do is talk to their agents and start to piece things together ourselves, and make searches on their website (which still doesn’t include many partners).
Matthew started to do this. I had a look as well.
Let’s take a simple example.
According to Delta’s 5-tier award chart that went into effect January 1, the most expensive roundtrip award in the SkyMiles system was supposed to be 350,000 miles.
That was ‘level 5’ pricing for US-South Africa and for US-Southwest Pacific.
That promise — as expensive as it was — is now out the window entirely. And I do mean entirely.
Delta’s new pricing went into effect immediately for travel June 1 onward. So I picked a set of random dates for a simple business class roundtrip, Brisbane – Los Angeles.
Remember that this is booking plenty ahead, 10.5 months in advance.
The itinerary adds a ‘saver’ award seat on their joint venture partner Virgin Australia to connect up with Delta’s Sydney flight.
Since Delta doesn’t include saver award seats in when you’re booking an award at a level higher than saver, they charge you additively. Since you can only have partner awards at level 1 prices, if you book Delta at anything other than level 1 you pay extra for the connection on a partner airline.
I searched two passengers and here’s what I got.
Add insult to injury? They warn you that this is such a bargain you’d better act fast because there’s only 3 seats left at this amazing price!
(Presumably there are 3 business class saver seats available on the Virgin Australia Brisbane – Sydney flight.)
So how does this price when two people want to use SkyMiles on these random dates within days of as far in advance as you can book? 1,660,000 miles.
Note that the Northern summer is low season for Australia travel. And so you don’t think I”m somehow cherry picking dates that are uniquely expensive, here’s a paid itinerary.
At $5620.10 per person, that’s $11,240.20 for two passengers. Or — at 1,660,000 miles — $0.00677 per mile. Matthew points out it’s often a better deal to spend American Express points as cash towards a ticket rather than transferring them to SkyMiles to redeem an award. (And American Express points offer one of the lowest value ‘pay with points’ redemptions among major card issuers!)
Past advice about SkyMiles goes out the window. I once believed that no matter what, a SkyMile would be worth at least a penny, and that drove my advice on earning miles. You can still certainly do better than a penny a mile in redemptions, but I’m not willing to claim that as a floor any longer.
American Express has to be going ballistic. What sane person would put spending on Delta co-brand credit card, other than to meet the minimum spend requirement for a signup bonus? Some people will still want to spend their way towards elite status but even those folks will have to realize that doing so comes at a cost.
As I say though not every itinerary will provide as little value as this one does. Delta’s new discounted economy awards can get you 1.44 cents apiece in value.
To a 90% approximation the way to squeeze real value out of SkyMiles is booking purely on their partners, with rarely the opportunity to include Delta flights even as connections. For as long as that lasts, at least.
So I don’t care how many miles you think you earn as a ‘big spender’ under Delta’s revenue-based program, Delta Skymiles doesn’t really reward even high spenders anymore. And don’t you dare ask how much your miles are worth, because they’ve “literally shared all the details [they’re] able to share.”
Update: for those that are skeptical, have a look at Delta flights only (not partners) for one passenger, one way. Watch what happens June 1. Here’s Sydney – Los Angeles:
And here’s Johannesburg – Atlanta:
It does seem that the most expensive awards are originating outside the U.S., but I have glimpsed our future, and all I can say is: go back.
Shocking, although part of me expects this from Delta.
I’m surprised their website even supports listing mileage costs up to 7 digits.
Actually, in each example you provide in this post, the search was for 2 pax.
So, that 700,000 award booking LAX-SYD was for two tickets, @ 350k each. Ditto BNE-LAX.
Still a crazy amount of miles, but not quite as insane as the post suggests.
No @G-flyer I did orginally stick a wrong graphic in at first, but BNE-LAX is PER PASSENGER look at the total for two, the graphic shows it at 1.6mm not 800k for two..
I think this actually might be a net positive change for Amex in the long run as now the DL Amex is a terrible deal given those pricing, which makes membership rewards CC more attractive. I would assume Amex’s own cards have higher profit margins opposed to a co-branded CC?
I mean higher profit margins for Amex.
As a long time Platinum Medallion, I’m completely horrified by your analysis.
And it reads plausible enough to be credible.
I’m only 14,000 miles short of re-qualifying as Platinum and had instructed my secretary to focus on DL when making my upcoming bookings.
No more.
Just emailed her and told her to avoid DL unless there’s a meaningful cost savings.
This was the final straw.
They’ve completely lost my trust and loyalty.
A many year run with an otherwise quality operation has come to an end.
A pity.
Man, I am quite pleased to have only 42,500 of these miles left and have stopped earning any others beyond any butt-in-seat miles I fly because of better price/schedule than competitors. They are just burning it all down. I am, frankly, shocked that they still even let you book partner awards at this point. They’re way too cheap relative to the dumpster fire that was DL awards.
Thanks for this information Gary. After reading this I immediately called up American Express and cancelled all of our corporate Amex Skymiles cards. None of our sales teams will be using the card anymore. I also passed along my displeasure to our Amex concierge who handles our account. We spend a fortune on Amex and I wanted them to know I can no longer support Delta receiving income from our spending. We’ll continue to use our other Amex corporate cards that don’t pay Delta any annual fees.
I have no doubt that this is pricing out the way DL intends it to (after all, with no award charts, how are we even supposed to know if an award is pricing out correctly or not?)… however this does seem to be an extreme example, b/c you can book the exact same LAX/SYD DL segments for those days for 350,000 in business. As you wrote, it’s the partner segments that inflate the price greatly. A smart flyer would just pay cash to get from SYD to BNE.
It’s not about the partner airlines . It is all about DL completely devaluing their program and charging an insane number of points for their own flights.
Here is a screenshot showing just the DL LAX – SYD nonstop for two passengers in business on the same dates. Just one DL flight each way, no partners or connections involved.
http://screencast.com/t/qEra9k4XXDmQ
750 000 miles per person. 1 500 000 total . DL lost it’s mind.
Watch out, the DeltaPoints douchbag will assault us with another 27 part trip report to the North Pole for speaking such I’ll words about Delta!
DL miles are sometimes usable for short-notice US domestic travel where you would have to pay a late booking fee to UA or AA and where the UA and AA saver levels are not available. (DL does not charge a late booking fee, one of its few advantages.) DL’s mid-priced awards can provide slightly more than 1 cent per mile in value in these situations.
@DWT I think this devaluation was so bad that you couldn’t even believe it.
From 6/1/16, those dates for LAX-SYD are 375,000 miles, PER PERSON, ONE WAY!! So that’s 750,000 miles for round trip for one person, without any partner flights.
!!!
@nsx that is the beauty of a non Delta Skymiles (membership rewards) Amex card. If you really have to use Delta Miles you can still transfer them without giving Delta any co-branding income from the Skymiles card. I refuse to give Delta 1 penny of the $195 annual fee Amex charges for a Skymiles card. Since they have no loyalty to me why should I have any loyalty to them?
I did a few searches to Europe, choosing Business/First. There are a few 125,000 miles routes and they are listed as Business but when you actually look to choose your seats on a partner portion of the flight, you can only choose economy seats. WTH?
@Gary– I see what is going on with the screenshot of the award calendar, but I just priced out LAX-SYD for the exact dates on Delta only in business, and the final award pricing is coming to 350,000 miles roundtrip + $108.40 in fees. Not sure what is going on here.
Even if it came up at 350,000 for LAX-SYD in business that is still outrageous. You make the 350,000 miles sounds like some type of bargain. Until people stop flying them and supporting them through using an Amex Skymiles account they’ll keep pulling this garbage. I’ll put my money where my mouth is and support airlines that support me as a frequent flyer. There’s plenty of other options out there that have a more modern and comfortable fleet and provide as good or better service.
just booked the last 3 seats for 830 k each as I knew they wouldn’t last long
for only 2 million 490 thousand miles we have seats
Thank You Delta 😉 🙂
You are the best!
Cant wait for upcoming UA Mileage Plan changes………
@ Gary — For premium cabin bookings, DL miles are still (for now) worth at least 1 cpm using Pay with Miles. You get 1 cpm and earn MQMs, which if you care about status are worth something.
I project being 2016 DM + 2017 PM by the end of 2015, and I am finally wondering if the DL thing isn’t nearing the end for me. I am primarily getting my MQMs through manufactured spending on Reserve cards, and I am just keeping my status to keep the free award redeposits/changes (probably the next thing they will take away). BUT, eventually our mileage balances will near zero, and then unless AA and UA screw us badly, I finally can’t justify continuing to give these lying, greedy backstabbers any more of my money. I hope this blows up in their faces.
@Gene wouldn’t you be better of taking that big volume of spend and putting it on a 2% card and using those rebates to just pay the change fees? How much are you spending in change fees?
DL has treated me well over the years and in return I’ve been loyal to them, but this is the last straw.
I’m cancelling my DL Reserve card and giving up pursuing status on DL.
It appears that Delta views frequent flyer programs as having had their day in the sun and now it’s time to kill them off. Could be that other carriers feel the same way and have been waiting for someone else to first pull the trigger.
@ Gary — Excellent point. I failed to mention that I use the unpublished DM co-terminal and free SDC benefit most of the time when I fly Delta. If I’m not DM, I lose those tools that have enabled me to game the system and generate lots of extra MQMs and save lots of miles on award tickets. Admittedly, so far I am still able to book the awards I need at a very reasonable cost past June 1, but my circumstances are very unique.
Once DL takes away all of the things I can game as a DM, it will be time to close all my DL AMEX cards and move my spend somewhere else, like Citi Prestige. In the meantime, for at least another year, I will likely keep putting massive spend on my Reserve cards.
I thought that a frequent flier program was a loyalty program. Considering the outlandish and exorbitant number of miles required for award redemptions at Delta, it is clear that Delta does not consider its frequent flier program a way to award its best customers for their business. Rather, the new redemptions now offered by Delta are an insult to those who stuck by Delta. Well, it is off to AA for me.
Not sure why, but Delta.com is asking me for 1.5 million miles AND my first-born child to fly to Peoria. I called to confirm it since that didn’t seem quite right, but I was told the price is the price is the price. Could be worse, I guess. At least they probably won’t violate me on the airplane–I hope.
Burn the Delta SkyRubles, credit flights to Alaska, give away orphan miles to charity, and be done with it. They have decided to exterminate their program.
Thank you (and other bloggers) for the warning! I’ll book my 2016 Independence Day ticket with UA as soon as they opens the reservation system. Present is always better than future in this game 😉
If airlines like Delta and AA don’t think that this issue is a sore spot with some of their best flyers they are dead wrong. When I see the amount of comments on this issue and a previous issue regarding AA not having any saver award inventory it proves they are taking a big risk when they start to screw around with their award charts and especially when they are dishonest about it. A lot of us who travel for business all the time spend a lot of money on expensive tickets and we like to know that if and when we want to use miles for a vacation or some other purpose those miles have a value to them. It’s one thing to give 90-120 days notice that they are changing the rules or the mileage requirements but when an airline intentionally gives no notice it’s highly unethical and clearly just an attempt to prevent people from using their miles before the value decreases. It becomes a matter of trust not just about their mileage program but about every aspect of their business. Personally I no longer have any trust in anything that Delta’s management says or does.
SkyPesos is too generous a term now. What are these, SkyTurds?
It’s really sick what these fucktards are now doing to destroy a once decent program, so glad i’m with AS and AA (for now.)
I spoke too quickly, it wasn’t DeltaPoints douchebag who defended Delta first, it was the ever present “I’m an expert because I flew one leg on a regional jet” MJ On Know Nothing About Travel who has enlightened us that we are just over entitled flyers who should ignore any drop of intelligence and just buy tickets on Delta and shut up.
This just makes flying on Delta purely ludicrous. As they say “we know you have many choices…..” And I’m exercising mine now. Bye, Delta. Glad we have only 150k left.
On man am I every happy I booked roundtrip LAX to BNE (Brisbane) last November for travel in Summer 2015 (left June 14th, back July 7th). 160K for business class seats on Virgin Australia (very comfortable!). That pretty much wiped out my Delta miles (around 7K left). 160K points now looks like it would have gotten me dropped off somewhere in ocean on the way (J/K).
Gary, do you think anything will come of AmEx’s supposed anger? I remember when UA devalued, you said Chase was pissed, but nothing much came of that.
@Nun – I vote for SkyDrachmas.
this is last straw cancelled dl/amex card unfortunately still have 200k delta points
@Nun SkyDrachmas
wow..at these redemption rates, why would I collect SkyPesos?
Gary – correct me if I am wrong but didn’t you coin the term “SkyPesos?”
I suspect this is a response to the government collusion investigation. I expect the other major carriers to devalue accordingly and what can we all do about it? Exactly.
It would appear that Delta is hoping to kill off the frequent flier program. All the more reason to fly the ME3 on International flights when you can. Delta has no loyalty to their customers, why do they expect support from us. I wish that Emirates and others would add more flights like the Milan flight to their schedule. Maybe Delta will value their passengers more when they start losing them at a rapid pace.
No one in their right mind can even contemplate on collecting skypesos.
I gave up on delta status 2 years ago. I don’t regret it for even one second, The sad part is, I really like the Skyclub agents, and FA’s. They are the best amongst the 3 legacy carriers. But obviously, they don’t influence any of the corporate decisions being made. I hope American does not go down this path.
Just booked 400k, so down to 1.4 M from about 3 M a year ago. Making progress…
For the record, guys, I looked up LAX-SYD for the week of June 6th, two passengers in business. If you’re willing to fly through Brisbane, there is availability at the formerly low level (80,000 miles) on 5 days out of 7. Doesn’t seem to be too scary.
I know it’s scary what they CAN do, but awards being way too expensive on Delta metal? That’s nothing new at all, and no different than AA. The sky isn’t falling yet.
@James K: And for how much longer do you think Delta is going to be willing to let you book a partner for 80K miles when they’re charging 375K for their own metal? I expect partner award prices to inflate sooner rather than later, and probably with just as much (lack of) advanced notice.
@JamesK… I don’t know where you were looking but when I did a search for June 6th it came up at 255,000 miles for business through Brisbane and 350,000 on the non stop flight to SYD. It’s ridiculous that almost 1 year out and the non stop Delta flight is 350,000 miles per person for business. Delta miles are completely worthless!!! I hope word of this devaluation spreads like wild fire so Delta loses a ton of their top fliers. It’s not just a small increase it’s basically like stabbing your best customers in the back.
255,000
+ $118.00 for the flight that stops in BNE
350,000
+ $108.40 for the Non stop
@Nick – I seriously doubt that this is in response to the government collusion investigation. DL has been moving in this direction for years, and many people were saying that this is where they were going well before DOJ started investigating airline collusion.