Head Of Delta SkyMiles Explains Why They Charge So Much More For Awards Than Other Airlines

The inimitable Brian Sumers interviewed the Vice President of the Delta SkyMiles program for Skift and put the question to Prashant Sharma why does Delta charge so many more miles for the best awards than other airlines?

Delta SkyMiles award pricing can frequently be double, triple or more than what you’d find elsewhere. That’s true even when you’re trying to fly Delta.

And Sharma’s answer is pretty simple: it’s because they can get away with it, and customers keep earning SkyMiles and signing up for the Delta credit card.

We take very seriously that the customers see value in the program, and the value is very holistic. A large portion of that for sure is using your miles to fly which is the promise of joining the program. And we feel confident that as we look at where customers are flying and their ability to use the miles, we are actually seeing that actually approach 2019 in terms of how customers are using their miles to fly so demand remains high. It’s also validated by the fact that customers are not only joining the program at record levels but also taking up cobrand at record levels which is further faith that this is a currency they want to earn.

So we looked at the value holistically. We feel very good that what we’re offering to customers. We continue to solicit feedback and satisfaction with the ability to redeem miles and the value of redeeming miles.

As long as customers keep engaging with SkyMiles, they have no reason to offer better value to members. In fact, Sumers digs a little deeper and talks about how Air Canada’s Aeroplan purposely offers awards that – while affordable for the program – look like outsized value to the member. Sharma sees no reason for Delta to do this,

Our focus here is to provide consistent and sustainable value…so we are not necessarily trying to play the game with customers or with bloggers. We listen to what customers want and we try to offer that on a compelling value across the board and that’s been our focus and we look at value more holistically as well. Mileage redemption is a big portion of it, but also just everything else that Delta can provide in terms of experience and making them come back to us.

He does highlight occasional sales that Delta runs, generally for coach travel out of specific cities, as a sweet spot in the program. You won’t find these good deals whenever you happen to search for award travel. Rather if you can watch for deals and jump on them when they come up you can get reasonable value out of your Delta miles flying coach.

We had offers for customers living in New York where they could do a roundtrip to Europe for 34,000 miles in Main Cabin or they could go to Miami for 15,000 miles roundtrip in Main Cabin. So we continue to have a portion of these for customers depending on when they want to go and where they want to go.

Sy Syms, CEO of the Syms Corporation, used to use the slogan “an educated consumer is our best customer” in 1980s TV spots. Delta could consider, “a consumer who doesn’t look for value, doesn’t know any better, is SkyMiles’ best customer.”

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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Comments

  1. Does Sharma speak english? His responses seem confusing with half finished sentences and bad grammar. Perhaps that made him a great pick for the job.

  2. Agreed
    The customer gravy train will run dry some day, sure but after this current management team is retired on the beach.
    In the meantime, we have 80k delta skypesos offers to hang on to. Indeed why give more to captive audience

  3. That answer (cynical though it is) used to make sense when DL’s operation was bulletproof.

    These days, though, they’re playing a dangerous game of chicken with that line of reasoning.

  4. DL has a quality product. I’m happy to fly them when their routes and times work for me. But I credit all my miles on them to Flying Blue, where I can actually use them.

  5. I suspect the pendulum will swing back on them… I’ve booked just one SkyMiles ticket in the last three years because they simply cost too much to redeem. And guess what? I charge practically nothing on the credit card and don’t generally consider flying DL for most business/personal trips because I see no use in collecting more DL miles than thee ones I have. AA, UA, AS and WN, plus some foreign airlines are worth continuing to fly. DL is where I look when everything else has been searched. Not smart, in my book.

  6. Since I have several currencies available to me and my airport has all the major carriers, I always comparison shop for awards. I haven’t redeemed with SkyPesos for a long time now. Luckily they don’t expire, so if I ever happen upon a reasonably priced award, I’ll still be able to use them, but I’m sure to cancel that AMEX card when the annual fee comes due. No value

  7. @ Gary — Just passed on a DL booking today. We have an SQ F award from FRA-JFK. The only option to get us nonstop to our final destination in first class is on DL. We are willing to pay cash, but these jerks would make us hang out in the terminal for a few hours before accessing their over-rated lounge until three hours before the flight. So, instead we booked AA from LGA. Smart move Delta. That kind of bs, plus dozens of hours on hold to reach agents this year mean I no longer care about Delta Diamond.

  8. I see plenty of value in my recent redemption on delta
    Only 150,000 miles to fly from ATL to MIA one way in coach
    Try to beat that!

  9. Sumer just reminded me why I tolerate American’s Management. Oh yah. It costs me less to fly my wife and daughter to Hawaii on AA than DL. Being based in LA, I can take AA, HA, or AS. Often they aren’t very good for West Coast Routes anyway since AS and DL relationship went sour. Also hopefully China Southern will resume their alliance with AA and eventually One World.

  10. I get a lot of value out of SkyMiles, particularly for coach domestic travel and during international flash sales. Not that complicated. It’s not like Delta flyers can’t also earn transferable currency for international travel – it’s what I do.

  11. I have not used my Delta Card in three years, since American changed their program I am now on track for platinum pro by next month and continue to earn significant Chase and United Miles.

  12. @Francis – it’s marketing non-speak for screwing one part of the value prop because they think another part of the value prop ‘makes up’ for it – the whole ‘holistic’ picture. In this case Delta thinks its ‘product’ is so good people are loyal to earn skymiles even if they charge inflated award prices.

  13. I think Delta’s gravy train is about to hit a wall. Some recent moves render the entire system extremely unattractive.

    Right now, cash price gouging is through the roof, flight toicket is 200% of last year, AAdvantage is literally pulling 3cpp on domestic flights, and skypesos is sticking to 1.2cpp, smh.

    I am getting out of delta program, and getting out of flying delta. I’d suggest everyone, if possible, do so as well. “quality product” means next to nothing when real money is involved.

  14. I Gary fan. No wear mask unless you are smarter than scientists. American Airlines evil. I still fly evil and bitch like snowflake for a living.

  15. Everyone claiming that the gravy train is going to run out because of SkyMiles’ lack of competitiveness is completely missing the point. SkyMiles has always been terrible, and that’s always been okay because DL has been head and shoulders a better product than AA and UA. As long as DL keeps this distance, they can charge a premium and value points worse than competitors.

    As UA catches up on the hard product, maybe that poses a threat to DL’s premiums, but the continuation of a meh loyalty program is not going to be the death blow.

  16. And Sharma’s answer is pretty simple: it’s because they can get away with it, and customers keep earning SkyMiles and signing up for the Delta credit card.

    That’s pretty much the exact definition of market pricing. You have a problem with it?

  17. There’s nothing about the delta product that is better or superior
    Their seat map is highly misleading
    I paid more for sub par cramped seating and the whole experience is like cattle on just about any airline.Perhaps others can rave why they may be a superior experience that I seem to be missing.I’d rather fly Southwest and I’m not a fan of theirs either but they also don’t rip off their customers relentlessly all the time
    Typically I’m on Alaska American Southwest United and when H#ell has frozen over I suppose
    Delta once every 3 years

  18. My favorite thing about Delta is that many of the clueless are taken off the carriers
    I wish to fly

  19. I wonder if there is going to be a pull away from Delta to American in NYC/Boston. The Jetblue NEA partnership fills in a lot of gaps. Loyalty points and co-brand spend incentivize spending on the AA cards.

    I’ve personally got some great redemptions from AA. Living in a delta focus city, but not hub captive – made me think about switching to DL, but recent improvements from AA in loyalty points, and filling gaps in routes i need to fly make it worthwhile.

  20. @LarryInNYC – Well, I don’t think it means what he thinks it means. He acknowledges the signups for the program are driven by new people / different people flying during the pandemic, and the cobrand has been running bigger initial bonus offers because they weren’t adding cardmembers in meaningful amounts during much of the pandemic (so normal attrition meant the overall portfolio shrank).

    Delta is free to do as it wishes, but part of the market is that consumers can be educated and do as they wish as well.

    But no, it’s not really a market because the market includes customs and norms enforced through tort law, and the Airline Deregulation Act as interpreted by the Courts (in particular Northwest v Ginsburg) specifically rejects the norm that airlines owe any duty of good faith and fair dealing that’s normally present in transactions.

  21. I always seem to find deals departing from near by airports. Ord to Bkk 60k miles (with Delta one global upgrade attached) 17k basic economy Cleveland to San Juan Puerto Rico. I guess it depends on having a flexible schedule. I do admit most award fares are ridiculously high.

  22. I already switched to an American Airlines Mastercard and rarely fly Delta anymore. SkyMiles is not worth it. Holistic that.

  23. In fairness, AA does have more reasonable mileage redemptions but any of the flights you’d actually want to fly are only available if you pay cash. Try flying from JFK to LHR on AA using miles – there often aren’t any options for direct flights at any mileage amount.

  24. He’s right. Delta will continue to charge whatever they want and get away with it and they have the other airlines to thank for it.

    Of the majors, they’re in the news the least with negative press. They’ll occasionally send an empty plane to pick up a stranded soccer team that has been screwed over by AA which makes them look like heroes.

    Their reputation is further boosted because others are just so bad. Frontier, Jet Blue, and Spirit make the news on the regular for operation meltdowns and leaving folks stranded.

    AA’s reputation precedes itself. Folks are still kinda “blah” on UA, not to mention their award pricing rivals that of Delta without the level of service that Delta delivers.

    AS caters to one side of the country and WN will never capture enough of anyone’s audience simply because of their lack of international destinations and lack of a premium cabin.

    So yea, Delta will keep winning for now…not necessarily because they’re the absolute best but because others appear to be much worse.

    Not to mention they know that if they ever get in over their heads or go a little too far, Daddy Warbucks, aka Amex will come to their rescue and bail them out.

  25. I have been seeing better value on Delta than AA recently on some domestic trips within the Southeast, especially around holidays where AA goes nuts and Delta’s doesn’t change. The key for me was the big update to no change fee, when is was $600 for my family of 3 just to change the time, I couldn’t even book Delta.

  26. Maybe I’ve been lucky, but I have found good value using Sky Miles for business class flights on Delta’s European partners. Using them on Delta metal is completely unaffordable except during the sales.

  27. All uou have to do is look at truly competitive markets. Boston. NYC. Los Angeles. What happens in these markets? Delta competes and wins. And this includes in card spend, which is tied to SkyMiles. Are all these high value customers that choose Delta in competitive airports dumb?

  28. @Anthony, exactly, DL took on solid regional carriers in BOS and SEA and I’d argue won in both, stopped any forward momentum from AA in BOS, likewise iced AA out of JFK/LGA, and is giving UA/AA a lot of trouble at LAX.

    They’re winning premium markets because they have the most premium product.

  29. Pretty cocky statements. I’m a Delta platinum card holder and I’m not seing much value quite opposite actually. After my trip this summer I will be looking for a better option as Delta sky miles is just robbery.
    Sharma will run Delta into the ground.

  30. This is exactly why I canceled my only remaining Delta credit card after Delta pulled multiple devaluations during Covid. They view customers as suckers to be milked and I take issue with that in general and more so for me personally.

  31. based in NY, opened their “cobrand” just because they have a centurion lounge and seemed to offer good value on certain rewards during covid, but having read this guy talk about ” holistic value”, I will have to close the Amex card. This person is nuts, and not only they devalued their own program, they made United to follow in lockstep. Only American lacks in the speed and ferocity they gut the value of their miles.

  32. If you want your frequent flyer miles to have better value, then you won’t find DL to be a good fit.

    If you get miles faster/easier than what you know what to do with, then you won’t care that other frequent flyer programs offer better value.

    Since I factor in what I can get in return for my cash flights, I choose not to fly Delta because their redemption sucks. My friend, on the other hand, rolls in SkyPesos at a rate that he can’t spend fast enough due to his work travel. So he doesn’t care DL charged him almost 2x the amount to go to Hawaii than what I was able to go for.

  33. Why does Delta charge so much more for Awards? Simply answer….because they can. Delta is slowly loosing it’s grip on reality. Consumers are smart, well read and now shopping around. I started flying Delta religiously 3 years ago before the pandemic and had to fly during the pandemic to support a family member going thru chemo. I choose Delta because of their professionalism and dedicated staff. Particularly on board. But Delta’s management is loosing touch. I’ll continue to fly them with a closer eye on constant goal post moving.

  34. I receive Delta credit card solicitations in the mail every few months from AMEX. They go straight in the recycling bin. 60k or 80k sign-up bonus for SkyShit isn’t going to cut it. They’d have to offer at least 150k just for me to open up the envelope.

  35. Typical corporate delusion. 1. We charge more because we can (or you are hub captive) and people love spending too many miles so they can be with us because we are so very awesome. 2. More people engaging, near 2019 levels, etc. (due to many more leisure travelers than normal who are typically infrequent flyers but we don’t see that part, just more people signing up).

  36. Delta SkyMiles are no longer SkyPesos. They have become Delta ScamMiles, as Delta tries to rip off gullible loyalty program customers who keep staying on — or even jumping onto — the Delta loyalty program hamster wheel meant for lemmings who will jump off the value cliff no matter how bad the Delta-designed landing has become.

  37. Three return tickets SEA-JFK-BCN this Spring for 38,000 skymiles each felt pretty nice to me. When dealing in multiple points ecosystems I find it pretty simple just to wait for value to present itself wherever it may.

  38. Can you please stop using this lady as a cover image. She is haunting me in my dreams.

  39. Personally, I envy those of you who have a choice of carriers. Living in ATL, we don’t.
    I did find a few good deal on SkyMiles during pandemic, in 2020 (ATL-DEN-SFO-ATL for 13K miles, for example). And, direct flights, esp. to Europe, are great – you get there early, with all your luggage, and avoiding hellish CFG or Heathrow changeovers.
    Lately, I use my SkyMiles just to book tickets and hold seats, until I find a good cash price, since cancelling SkyMiles reservations costs nothing. Did that for 84K SkyMiles/pp for ATL-ATH about 5 mos ago, when DL direct flight was $1,500, and kept it until DL came with a sale price ($1,004/pp).

  40. Pretty gross that the first comment in this thread is a racist one.

    TJA : “Does a guy with an Indian sounding name speak English?”

  41. Many people make decisions I would consider irrational. But sometimes that’s what people are comfortable doing, or they feel good about it. (People who look forward to their annual tax “refund”, for example, when most are over paying taxes in advance). I like to have some general idea of the value of an award ticket before I use miles, and act accordingly.

  42. It’s this kind of arrogance that makes me question flying delta. I have few other options. $360,000 miles to Upgrade to delta one a flight that I already had to pay $3600 for to Sweden for business. That is ridiculous.

  43. Delta could consider, “a consumer who doesn’t look for value, doesn’t know any better, is SkyMiles’ best customer.”

    It’s almost literally what the Skymiles head said to me at the Freddies Awards that were held at the Delta Museum in Atlanta. After asking her about devaluations and poor values, she told me that Delta does not focus their program on knowledgeable/educated customers. There are better programs for those customers. Delta wants the ignorant and uninformed customers. I supposed another way to say that is the ones who don’t care about the program.

  44. I used to be Diamond Delta. I havent spent one dime on Delta in 3 years.
    I have spent alot on more reasonably priced airlines tho. Kudos for Delta tho if they can keep selling tickets to suckers.

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