Tag Archives for devaluation.
Mary Schlangenstein who covers airlines for Bloomberg asked CEO Ed Bastian during Delta’s earnings call about Southwest’s no-notice 6.5% devaluation of Rapid Rewards points yesterday and whether they’d considering doing something similar.
Bastian offered SkyMiles as a contrast to Southwest, “we’re not considering that, and we’re very excited about the value [of the SkyMiles program].” Wait, wut?
If it’s true that we shouldn’t trust loyalty programs, and that ought to become our base case, then the way that information gets out to the public is precisely by shaming loyalty programs when they behave badly. Rather than shrugging our shoulders at no-notice devaluations, it is important to shout it from the rooftops so that members know to build lack of trust into their base case.
Effective immediately and without notice, Southwest Airlines has started requiring 6.5% more points for flight redemptions. The change comes as Southwest celebrates its 50th anniversary this week. Award tickets used to cost 78 points per dollar of base fare and now cost 83 points per dollar.
Earlier in the week IHG Rewards seemed to devalue their points raising the cost of many properties without notice. Indeed, 100,000 points was no longer the most you’d pay for an Intercontinental and it became possible to spend as much as 79,000 points for a single Holiday Inn room night.
Right now prices, in some cases, appear back to where they were before the devaluation.
Award prices in British Airways Avios have increased without notice for flights up to 2000 miles.
The British Airways Executive Club pricing system is based on flight distance. Flights in the first 3 distance bands (1-650 miles; 651 – 1150 miles; 1151 – 2000 miles) have gone up by 750 Avios each way (1500 roundtrip).
At the beginning of February Delta devalued SkyMiles partner award pricing for the second time during the pandemic, and in a big way. Since the start of Covid-19 one way business class between the US and Europe on Air France and KLM went from 75,000 to 95,000 miles and now starts at 120,000 SkyMiles – for a 60% increase in less than a year at a time when flights are empty and prices low. Because they can.
Delta says they have no award charts any longer, but that isn’t true. They just hide their award charts. Mexico is a separate region from the United States, and while they’ve massively increased their award chart pricing for partner travel to and from the U.S., they haven’t (yet) done so for travel to and from Mexico.
Delta SkyMiles is at it again. They’ve raised the price of award travel on their partner airlines with no one looking. They’ve done it by a lot. And they’ve done it after just raising award prices in October. During a global pandemic when awards should be easier and cheaper to get than ever. In fact Delta is now charging more than double what United and American charge for the best awards in many cases.
On New Years Day Virgin Atlantic updated its award pricing for travel on Delta. One of the few bright spots in Virgin’s Flying Club program was inexpensive Delta awards, so this was disappointing in the extreme. Prices went up in some cases more than 100%, largely focused on longer distance premium cabin awards.
Then, two days later, their spokespeople started saying that transatlantic awards wouldn’t go up as much as they had published and there would be an update. They’ve now said non-stop transatlantic awards will revert to their earlier pricing, but flying Delta anywhere else in the world or with connections will be a lot more expensive than it was in 2020 in many cases.
In December 2019 – shortly before the start of the pandemic – Korean Air announced a huge devaluation of their frequent flyer program with revenue-based mileage-earning and a new distance-based award chart coming in April 2021.
Korean Air has offered one of the more lucrative frequent flyer programs for many years, and access to outstanding award inventory not made available to its partners. However they’re also part of a joint venture with (and partially owned by) Delta, so devaluation of their mileage program was almost a given – at least until the pandemic hit.
They have a diversity of partners that can be strategically useful in niche cases. And where they’re useful the value is extraordinary.
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 »
