Last month Delta told investors that they added 1 million new American Express co-brand cardmembers in each of the last three years. They didn’t share stats on cardmember attrition however, so we do not know what the net growth of the portfolio actually looks like.
Delta has a new press release around adding Amex cardholders and the final 2019 total comes to 1.1 million.
Delta also shares that they’re adding SkyMiles members at “double the rate of just three years ago” and they cite a comment from their second quarter 2019 earnings call in support.
- Last month we learned that new SkyMiles members total 6 million for 2019, suggesting they were adding about 3 million members a year in 2016.
- They don’t tell us the number of active members, or whether and at what rate that pool is actually growing. When programs give total membership numbers that usually means all the people who have ever signed up for the program rather than those who have account activity recently.
They trumpet added general members in the program and added co-brand cardmembers (perhaps enticed by a limited-time bonus offer) as proving the value proposition of the program. They offer the following proof points about the quality of the program,
- Elite status challenges for current elites experiencing major life events like medical issues or changing jobs. They aren’t offering true family leave, just temporary status and an expedited path to keep status. This is a no brainer, a benefit that ought to be more generous (and in much of the world it is) and one that’s surprising we haven’t seen other U.S. airlines follow.
- Spend miles instead of cash for upgrades paying the difference between current fare and upgraded fare at a value of about a penny apiece. This is a terrible return on miles, and a reason why spending on the Delta credit card just doesn’t make sense unless you’re using the spend to earn elite status (since getting just a 1% rebate is less than half the value you can get elsewhere on spending).
- Miles don’t expire they say this is ‘unique’ but JetBlue, United, and Southwest points don’t expire either.
- No blackout dates for Award Tickets on any Delta Air Lines flight they say this is ‘unique’ but U.S. airlines generally do not have blackouts for award tickets on their own flights. Of course those awards might be four hundred thousand miles or more one way.
- Elite benefits “Complimentary Upgrades to Delta One on domestic flights, Rollover Medallion Qualification Miles and Choice Benefits for Diamond and Platinum Medallion Members.” Delta Diamond benefits are the one strength of the SkyMiles program.
- “[N]amed a Best Travel Rewards program by U.S. News & World Report for the third year in a row. This is another way of saying >they failed to win this award each of the last three years. There is no being ‘a best’ rewards program. Delta consistently comes out behind Alaska Airlines in the survey (which has myriad flaws).
Delta of course is the only airline where their cheapest awards stick loyal customers in basic economy. Miles have low average value. There are mileage sales, so if you can book spur of the moment and travel where and when Delta is discounting you can do a bit better.
Where SkyMiles is strong is in their top tier elite offering, which is the easiest top tier to earn since credit card spending can be used strategically to make up as much of qualifying miles as needed.
According to Delta’s own executives it’s brand and scale that drive credit card signups in contrast I believe to the quality of the SkyMiles program.