Prashant Sharma is out as Vice President of Delta SkyMiles. The airline confirms his departure to me, and says “we do not have anything else to share regarding a replacement at this time.”
Three years ago, Sharma laid out an intentional strategy to deliver less value through the program than other airlines do.
- He explained that SkyMiles wants to offer “consistent and sustainable value.” Consistent means low average value, and sustainable means inexpensive to Delta to offer.
- If you want high value awards, don’t look to Delta, “so we are not necessarily trying to play the game with customers or with bloggers.”
- Delta “look[s] at value more holistically” and being able to use your miles is only part of it. In other words, you stick with Delta and SkyMiles because you like their product, schedule, reliability and marginally friendlier non-union cabin credit – not because you’re going to get as much for your miles.
Make no mistake, though, the enshittificaiton of SkyMiles has a long history. It’s hardly at Sharma’s feet. A decade ago a predecessor acknowledged that the program had always been stingy with reasonably-priced award availability.
That’s obviously gotten much much worse, not better. They even devalued their miles multiple times during the pandemic when planes were empty and prices were low, but they hoped nobody was paying attention. And they really don’t upgrade even their top tier customers anymore.
Fifteen years ago a SkyMiles head before that described their view that frequent flyer programs were ‘over-rewarding’.
On the one hand, despite their miserly approach to members, Delta’s program became the most successful by revenue. Which is to say their American Express partnership drives more revenue than competitor cobrand programs. That’s a testament to Delta’s hardnosed bargaining (in a 50-50 deal, they take the hyphen). And it’s a testament to their privileged positions in Atlanta, the Upper Midwest, and increasongly New York and Los Angeles.
But the American Express partnership is underperforming. At over $7 billion annually it’s huge, but lagging the projections that were made when they re-upped their agreement for 10 years back in 2019.
At the time, they expected to hit $7 billion in 2023 without the numbers being inflated by pandemic-era inflation. So you need to knock over 20% off where they are now and you’ll see just how poorly they are actually doing.
They’re using free inflight wifi as a way to feed the top of the funnel and get more customers to market the card to. There’s a hope that their Starbucks and Uber partnerships can help do the same thing. This would give them another product to sell – because the current slate of products offered to the current group of customers has been mined as deeply as possible. There’s not just much headroom for growth.
The challenge that the next SkyMiles leader faces is convincing superiors at 1030 Delta Boulevard that they need to deliver value to customers in order to attract both new members and greater wallet share from existing ones. They have at least realized that just pushing existing customers even harder without giving them more isn’t going to work.
Why does Delta need to change anything? They are the most profitable US airline. They are running a business not trying yo make bloggers and people that chase points/miles happy
Queue Mr Dunn
Problem is, UA is already much of the way there in turning MileagePlus into SkyMiles. And while AA is better, their dynamically priced awards on their own metal seem to be on a slow devaluation where prices constantly increase every few months. 400k one way in J from the US to Japan? Yes, that’s on AA now. I don’t think there is any incentive for DL to make SkyMiles any more rewarding, when their biggest competitors aren’t going to be providing much more value in the long term.
the gambler gets it… with the caveat that every business strategy requires continual tweaking.
I doubt if anyone left or was forced out for not being willing to tweak the SM program. and while Gary is correct that SM has not grown the SM/Amex program to the degree that DL once said was possible.
And, as I have repeatedly asked Gary to do, all of the major US airlines publish the amount and value of their mileage awards in their 10Ks. It is not hard for anyone who wants to complain about SkyMiles to do some basic comparisons of award numbers and amounts.
Doing so will show that DL does give comparable if not better numbers and value of awards as its peers.
There is an excessive fixation with the highest value seats and the price of them to the exclusion of where actual redemptions are made. DL simply discounts its business class products less than its peers – including discounted award prices – and that is part of how it gets higher average fares.
The number and value of awards between the big 4 airlines is not markedly different.
Can DL tweak its program better to enhance customer benefit and financial returns? yes… but so can every other business – which is why they wake up in the morning and come to work.
As a Delta Million Miler now retired 20+ years, I fly Delta only when I can get an award flight via AF or Virgin. My main route is ATL-LGA and I can stand SW there.
I was looking at award tickets for later this year to LHR. Using my Atmos Rewards points (terrible name, but much more valuable than SkyPesos), I had my pick of dates for 70k round trip in J, which as an Emerald would include using the Cathay F lounge in LHR (sorry Dulltah One lounge, you’re not in the same ballpark).
Same dates, Delta wants 50k SkyPesos for whY. If I want J, that will be 500k.
I’ll give Delta credit for having a higher average fare. It also doesn’t help that until recently, long haul business class cabins on Delta planes had 29-34 seats, which is a bit smaller than AA and a ton smaller than UA.
But… this is why I don’t bother with Delta.
SkyPeso’s name is very familar to many. Their worthlessness is so stark, it is so easy to see.
I just priced a trip. 22,500 miles on AAdvantage, 42,000 miles on SkyMiles.
I’m so glad that I burned about 290,000 SkyMiles last year. That got me a one way economy class Augusta, Georgia to Atlanta….just kidding. I’m down to about 35,000 SkyPesos! Never felt better.
Heh…”enshittification”…I like that word…it describes all of Tim’s posts when he and 1990 aren’t fellating each other here.
In all business you’ve got to give something…to get something.
Will be interesting to see
what happens next? I’m still “banking” that we’re going to see the unveiling of the new super duper mile high delta amex card. That’ll definitely help raise some revenue.