Delta Rolls Back Fuel Surcharges on Virgin Atlantic Awards (and How Not to Protest SkyMiles Devaluations)

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Delta quietly devalued their miles again over the holiday weekend adding fuel surcharges to Virgin Atlantic business class awards departing the U.S..

A year ago a business class roundtrip on Virgin cost 125,000 Delta SkyMiles. Yesterday it cost as much as 205,000 miles and a $956 cash co-pay.

But this change has been rolled back and SkyMiles redemptions for Virgin Atlantic business class travel no longer incur fuel surcharges [although SkyMiles awards originating in Europe still do, as they have for years]. (HT: One Mile at a Time)

Here are Virgin Atlantic awards booked far in advance (within 2 weeks of travel awards are more expensive). They’re 85,000 miles one way from the US to London without fuel surcharges:

Was this a mistake on Delta’s part to roll out fuel surcharges on these awards? Delta hasn’t said.

  • In fact, Delta’s position is that awards cost whatever they say they cost at the time of redemption. That’s been their position since hiding award charts from members, the point of which is to reduce transparency. You can’t know what an award is ‘supposed to’ cost, it just costs what it costs.

  • Delta rolled out variable award pricing for Virgin Atlantic awards back in October. This was a ‘mistake’ and they quickly fixed it. However the mistake turns out to have been the timing, because this was ultimately something that they decided to implement.

So the bottom line is we don’t know what Delta will do to their award pricing, but for now you can book Virgin Atlantic business class awards originating in the U.S. without fuel surcharges.

Does This Influence Whether You Should Sign Up for a Delta Credit Card?

I valued Delta miles at 1.1 cents apiece. My valuation of Delta miles last month was lower than the most recent valuations from One Mile at a Time (1.3 cents) and from The Points Guy (1.4 cents).

The Gold Delta SkyMiles® Credit Card is offering 60,000 bonus miles after you spend $3,000 in purchases on your new Card within your first 4 months and has a $0 introductory annual fee for the first year (then $95) [offer expired]. The Platinum Delta SkyMiles® Credit Card from American Express is offering 70,000 bonus miles (and 10,000 elite qualifying miles) after you spend $4,000 in purchases on your new Card within your first 4 months and has a $195 annual fee card. [offer expired]

At 1.1 cents apiece 60,000 miles are worth $660.

Now Delta miles have been shaved more value by adding fuel surcharges to Virgin Atlantic awards departing the U.S. The miles aren’t now worth less than a penny. In fact they’re still worth marginally more than a cent. I haven’t yet worked through whether I believe the value is closer to $0.0104 (rounding down to a 1.0 cents) or $0.0106 (rounding up to 1.1 cents).

What the Credit Card is Good For, And Who Benefits When You Sign Up

In my post sharing the new signup bonus for Delta cards, I think I was clear:

  • On what I believe the value of Delta miles is. And it’s been no secret, and hardly a new concept, I’ve been calling Delta SkyMiles “SkyPesos” since at least 2009.

  • American Express lets you get one signup bonus per lifetime per card, getting a card you haven’t had before when it’s at the strongest public offer they’ve had for it, is a good strategy.

  • If you fly Delta semi-regularly but not enough to earn elite status, having the card makes your travel experience better with first checked bag free on Delta flights and priority boarding.

And here’s the thing. Several commenters suggested sticking it to Delta by not signing up for their co-brand card. I think that’s exactly backwards.

You’re imposing a cost on yourself by skipping the card (giving up the bonus and benefits). However you impose a cost if you do get the card. The signup bonus is costly. The travel benefits are costly. You only provide a benefit to Delta if you continue to spend on the card on an ongoing basis. And you should not do that.

In fact, if you have a Delta card now you shouldn’t spend money on it unless you’re using that spend to help you towards elite status. If your goal happens to be Delta SkyMiles, Delta’s cards aren’t even the best way to get them, a faster Membership Rewards-earning card lets you earn Delta miles more quickly (since Membership Rewards transfer to Delta) and gives you the option to transfer points elsewhere.

A couple of weeks ago I opened the last day of the Card Forum conference and one of the things I spoke about was the reputational linkages between co-brand issuing banks and their travel partners. If you’re mad at United one of the very few things you can do is cut up a United credit card. A year and a half ago a Dallas news reporter went on an epic rant cutting up his American Airlines credit card on air.

However the emotional reaction of boycotting the signup bonus and benefits of a Delta card saves them money and improves their bottom line when you aren’t going to use the card for ongoing spend. It’s like Cleavon Little holding a gun to his own head in front of the townspeople of Rock Ridge in Mel Brooks’ Blazing Saddles.

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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Editorial note: any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Comments made in response to this post are not provided or commissioned nor have they been reviewed, approved, or otherwise endorsed by any bank. It is not the responsibility of any advertiser to ensure that questions are answered, either. Terms and limitations apply to all offers.

Comments

  1. Please update your HT to Rene. She posted first, and even went as far as to comment on your last Delta article, and you still hat tipped to One Mile at a Time (who by the way, HT to Rene).

  2. Well now know what HT means….. 🙂
    Seeing Gary’s original post about the fuel surcharges, I will, sadly, confess to some degree of schadenfreude re. his pimping of the Amex Delta credit cards just a day or days before and the pillory to which so many of his readers wished to consign him….
    That said, whether Delta’s addition of fuel surcharges on VS flights was an error or a trial balloon, we might discuss. Sadly, from what I have observed of Delta since Mr. Bastion took the helm, my assumption is the latter.
    And this conclusion is not without consequence for Delta and Amex. I have an Amex Delta Plat card (and a regular full $500+ Amex Plat card). I typically use it for all my business expenses just as a way of seggregating them and for ease of reporting. But since I have met my card spend requirement to get DL Diamond through 2019 (I have the miles) I am going to switch to my CITI AA black card. I’d rather build the miles on AA — not perfect but less scummy than DL who have blown my trust in so many different ways and not to do with Sky Miles — than DL.
    I doubt this will cause the DL corporate towers in ATL to quake. In fact, from my observation, they could give a flying f**k what customers want or do, but it’s my little contribution….

    Diamond and Exec Plat through 2019, for all they get me.

  3. The only way Delta will gain back my business is if they turn it all around. Like make Europe business awards 100k roundtrip. Domestic rt 25k, etc. Go back to normal. Not likely.

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