How Come People Are Rushing To Join Delta SkyMiles?

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.

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. I love the no blackout claims. They’ll charge a pound of flesh but hey no blackouts! Even AA is joining in on this now.

  2. Back in the days of an award table when I was a road warrior and million miler, Delta had my loyalty. I used my last Skymiles recently on an award sale and have cancelled my Delta cards. Southwest gets all my domestic business these days.

    I may fly Delta internationally if Virgin Atlantic Flying Club has a good deal popup, but otherwise likely not.

  3. It’s because of the rewards.

    I tried to book a trip from USA to South Africa for Feb/Mar using my large stack of SkyMiles. One way per person in Delta One (business class) would be only 465,000 miles !!! SFO-JNB with one stop. For two , return trip, that would be only 1,860,000 miles plus $112.10. Wow, a steal !!!

    Alternatively I could go in Business Class with Lufthansa for 80,000 one way per person, or 320,000 United miles plus $186.00 total also one stop. Probably less if I could get Avianca’s site to work or slightly more using Singapore miles and going westwards (and remember these miles are very easy/cheap to get).

    The reason I have some many Delta miles is the same every time I check – useless to use for my long-haul business flights. There’s always a much cheaper way. I suppose I can use them for short-haul like SFO-SEA for 5,000 each way, but that’s what Southwest and companion pass is for.

  4. Endless industry consolidation + network effect + the fact that they run the best US operation at the moment

    I believe their claims (in a genuine way) much more so than AA’s

  5. I signed up for Delta Platinum card. I used the signup bonus to book China Airlines in business to TPE. I was thinking of keeping it for some of the benefits but not after they hiked the AF. I’ll downgrade to the no AF card now.

  6. Slightly different take on Delta and Amex.

    Everyone has been reading about the Delta Flash sales using Sky Pesos. My wife used 10,000 or so miles to fly R/T LGA/FLL to see her brother.

    Delta has had mid 20,000 mile R/T redemptions between the US and Europe. Under normal circumstance (in 1995), that would have set you back 50,000 miles R/T.

    I recall a flash sale to Australia last year.

    Recently, Delta had 18,000 R/T redemptions between NYC and LHR. You read that right, 18,000 miles R/T. We booked 2 R/T tickets at 20,000 at times we liked. Baggage included for card holders. We even booked seats (woop-ee!).

    Readers here are in the know; but when non FF geeks hear about these deals, they jump on the credit card bandwagon. Let’s face i

    My Prediction.

    In the next year or so, after Delta and Amex has signed everyone up, these Flash sales go away; once again leaving the public with worthless Sky Pesos.

  7. Count me under “attrition.” Just canceled my card the other day due to the coming changes. I considered downgrading to the no-fee Blue card, but didn’t. Maybe I’ll apply for it someday if I think I’ll have a use for Pay With Miles. I don’t hold out much hope of getting good value from Skymiles, however.

  8. Delta said they are going to start providing more “color” on the loyalty revenue stream, I believe after the 2nd quarter.

    It will be interesting to see what’s really going on

  9. @ Gary — Well, I can tell you this much — we are no longer am putting ANY spend on our Delta cards. Our Reserve cards will be closed in the next 60 days and the Plat ones will be closed when the annual fees come due.

  10. Delta totally over rated
    Flew them recently same old sh#t as everyone else
    Tired aircraft and the premium seating a complete scam
    They fly some routes non stop nobody else serves as well
    And if in Atlanta then probably one is somewhat a captive hostage to them

  11. After two or three years away from the program I was recently able to sign up for the AMEX card again (a bit over 7 years had lapsed since last time I got it) for the signup bonus, attracted in part by the flash sales. I’ll see how it goes, but don’t consider it likely I renew after a year.

  12. “How Come People Are Rushing To Join Delta SkyMiles?”
    Because there are a lot of stupid people! While miles from all programs have been devalued, the Skypesos are still the worst!

  13. I am amazed at all criticism of Delta and AMEX Reserve Card and the Skymiles program. I signed onto “Delta Frequent Flyer” in 1990 and have logged over 5.4 million miles, and maintained top tier elite status for thirty years. I have been carrying an American Express card for over forty years. I upgraded to Delta Reserve card and use it for every purchase including my coffee at Starbucks. If used prudently, Delta Skymiles is the best thing out there!

  14. Gary has posted a version of this story for the past few years. Yet Delta continues to sign up new members.

    1) I’m booked to Europe this spring o. Delta One for 49,500 each way – booked during one of their sales. It’s extremely hard to get such flights out of United nowadays. Of course this is an exception – but don’t act like it isn’t possible to get redemptions in the current environment. Even AA is offering decent availability to Europe in the fall and spring on their metal via their web specials (JFK to BCN or MXP at 59,000 to 70,000 each way)

    2) Delta’s availability for coach seats is pretty good

    3) Using miles for upgrades at 1.2 cents per mile can be a good use for stranded miles

    4) When looking at redeeming miles, you need to look at the blended average cost of the miles you earned. While miles earned on credit cards are expensive (assuming you can spend on a cash back card), miles earned by flying, taking Lyft, whatever are cheaper.

  15. Just to people have an example – in 2019 I decided to focus on Delta, including business travel, signing up for an additional credit card (Reserve), etc. Here are some of the results

    Earned 86,422 miles by flying
    Earned 53,000 miles through regular credit card spend (including a mileage boost)
    Earned 75,000 miles through sign up bonus
    Earned 16,000 miles through other random stuff

    Redeemed 196,000 miles for two round trip business class tix to Europe
    Redeemed 32,400 miles for other stuff (upgrades mainly)

    I also used a companion pass worth $500 in the year.

    I would say the return on my SkyMiles investment has been pretty good. In 2020 I plan to earn more through flying (moved up a status level, flying more) and other stuff. Don’t expect any sign up bonuses but credit card spending will likely be similar – though without the Mileage Boost I may need to alter my strategy

    Can I always depend on sales for maximum value? No. But I will always look out for them. And it is not obvious to me that focusing on United or American (my only other two options for business travel) would have been more lucrative. And I would have had a worse experience.

  16. I don’t understand the criticism either. I have flown about 150k / year on DL the last 10* years , and hold up he Amex Platinum.

    1) service – better than the rest
    2) Amex platinum pays for itself two ways. First the free annual companion ticket is always worth more than the annual fee, and for you non loyalists, you still get free bags and priority boarding
    3) like it or not, the new reward program is by far the most logical / fair. It’s pegged to the dollar value of the seat – about a penny per hundred points. So as to the person complaining about sfojnb business class redemption amounts, so the math. If you find better deals on other carriers (eg LH) it’s because they have not finished the technology to convert thei points to a pseudo- currency (YET).

    Last, have you folks ever needed support from your credit card? Amex is excellent and geared towards the higher income, with better perks and customer service(albeit slipping noticeably) while cards like capital one are horrible from my experience (not that is a card I cancelled)

  17. How come people use How Come in journalism when the rule to not use that was taught in grammar school.

  18. When AA recently asked “why are so many people signing up for our program?” It lead to the discovery of rampant fraudulent account creation and waves of frequent flyer account shutdowns. Could the same thing be going on with DL?

  19. One hypothesis—the change to United’s frequent flyer program is causing a lot of West Coast-based flyers to reassess their program choice. I’m very skeptical of the new United program (and I’m a top-tier elite in at least two programs every year)….and I know of more than a few folks who are jumping over to Delta/giving Delta a try as the ‘best of the worst’ options for US-based frequent flyer programs.

  20. If you focus on their operations and expansion it should not be a surprise. As the airline adds hubs like Boston, Seattle and grows more focus cities it pulls more low tier and mid tier travelers into their base network. When I started my career in Detroit and became a heavy traveler the only logical airline to focus on was NWA and then Delta post merger. When I can to Boston 10 yrs ago the airport was a spoke for everyone but Jetblue and Jetblue didn’t cover many places I needed to go. Now that Boston is a Delta hub the power of their network again makes SkyMiles more attractive AA or UA.

  21. @KC ~ How did I not know that you get a Companion Pass with Amex Platinum? Is that just for the Business card?

  22. @Gregg: This is the best response I have seen and probably closest to the truth.

    There are more”new” customers in BOS, LGA and SEA that there were in ATL, DTW and SLC.

    There is one more issue.

    @Nate touched on it. UA flyers probably aren’t thrilled with the idea of Scott Kirby deciding how generous to be with miles and what they are worth. I haven’t followed too closely the recent UA changes, but any time I see the word “enhancement” used it usually means the opposite. And the recent cutback in compensation for delays that a spokesman said was due to “feedback we received” I would say is a shot across the bow.

    If UA miles were worth the same as DL miles, (and AA won’t be too far behind in this race to the bottom) how many non hub captives would stick with UA or AA?

  23. @KC
    You mentioned in your post: “It’s pegged to the dollar value of the seat – about a penny per hundred points. ” I assume you meant a dollar per 100 miles, or a penny per miles, and not a penny per 100 miles like you said, which would be horrible.
    That’s why most people do not like the skypesos. What’s the point in earning miles with a credit card instead of cash back is a mile is only worth a penny? People are used to get significantly more value from their miles.

  24. As soon as I use my companion pass which will be by may I am downgrading my platinum card to gold and might even cancel it I spent $25000 or more than 2019 and they will not give me this silver medallion class status after complaining. Good bye Delta and hello Southwest Airlines both fly to atlanta and that is the the onl y place that I fly. Not to mention that the annual fees going up to $250 this year

  25. Miami –

    1) It’s not obvious to me that AA miles and UA miles are worth all that much more than 1.2 or 1.3 cents, which is similar to Delta for most cash like redemptions

    2) Cents per mile analysis too often ignores the impact of miles earned through flying – If I earn 100,000 miles by flying, earned another 100,000 miles in credit card activity makes the original miles worth more as I can use the extra miles to bring a companion along with me on my redemptions

  26. Could a new wrinkle in the move to Delta be the fact that Delta is the only nationwide U.S. airline (i.e., not considering Alaska to be truly nationwide) on which you won’t ever have to worry about ending up on a Boeing MAX jet?

  27. Loyal Delta customer since before when it was Northwest Airlines. I WAS a Platinum member, but will drop it on my renewal date. I’m not paying $250 for reduced benefits and perks. Already picked up the AA Citi card. Times are changing.

  28. Thought this article would address UNITED Mileage Plus program’s serious turn for the worse in 2020 where no upgrades are confirmed, only waitlisted – based on a complicated “points” system.

    New UAL mileage program requires either (54 segments & $18,000 spend) or ($24,000 spend). 2019 spend was $15,000, 100,000 miles. HUGE CHANGES. Can only imagine that those that are frustrated by United’s new set-up will leap to DELTA’S straightforward loyalty program.

  29. I think the answer is that for most people delta generally offers a pretty good and reliable experience , so if someone flies delta to grandma’s and back, and the people seem nice, the planes seem new, and everything runs more or less to schedule and they then see a delta promotion for a credit card in the ife, or the in-flight magazine, or get a mailer, or email when they get home, then they here about a crazy 25,000 point to Europe flash sale. They sign up for the card, and most people don’t cancel credit cards as often as they should. That’s where I suspect a lot of the 99 dollar card/SkyMiles select people are coming from.
    On the frequent traveler side, delta inverted the typical logic, in that people picked the best rewards points and flew that airlines, whereas now people pick delta because its a solid airlines, and then you sign up for skymiles because if your going to fly them anyway why not.

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