SkyMiles Select has generated much virtual ink as a brand new $59 program from Delta offering:
- Main cabin 1 boarding
- 8 drink coupons
- Luggage tag
Delta says that SkyMiles select is selling you a package with $100 in value, based on 8 drinks at $9 each ($72) plus two one way boarding priorities at $15 each. With the math done that way, if you drink your fill each additional trip where you board early means you come out that much farther ahead.
Then we start debating how much those inflight cocktails are worth, whether you’d really spend $30 roundtrip to be able to spend even more time in a metal tube (you’re really buying the ability to not have to gate check your bag), and who on earth is ascribing value to the luggage tag?
The most common points beyond ‘doing the math’ on package value are that:
- This is a new lowest elite tier that you pay for
- This undercuts one of the selling points – early boarding – of the Delta co-brand credit card for non-elite customers.
There’s nothing ground breaking here in either of those two. Airlines have been selling bundled and unbundled premium access services for some time, and $59 doesn’t buy you the initial bonus miles, earning for spend, or free checked bags that the credit card delivers. This isn’t about to undermine the substantial cash cow that is the American Express deal.
Some have suggested that if you were going to buy all those cocktails anyway then Delta is probably coming out behind, losing money on the deal. But that misses the point. If you buy this bundle you’re likely to make your next ticket purchases from Delta in order to use the services you’ve already paid for. And that’s true even if Delta is slightly more expensive.
This prepaid package is probably a more powerful motivator (for folks who sign on) than SkyMiles in choosing Delta. It’s Amazon Prime where you’ve already paid for shipping so when the purchase price of an item is the same on Amazon as at another store, you’re going to buy from Amazon because your total cost delivered is lower.
I made this point to a C-level airline executive two years ago regarding the monthly internet package they were selling. It hadn’t occurred to them that a customer who purchased $50 a month internet meant that customer was more likely to buy tickets from them too — that on each subsequent purchase they were likely cheaper, as long as fares were close, because on another airline the passenger would find themselves buying internet.
If you know you’re going to make 5 or more one way trips on Delta (but don’t earn elite status and won’t get the credit card), and you’d buy earlier boarding each time, then sure by all means do this and pocket free drink coupons.
But as a general matter I recommend against buying SkyMiles Select because of the lock-in effect and how that’ll cause you to choose Delta and even spend more on your next trip, simply by virtue of already having paid for benefits that you’d need to buy a la carte from another airline.