When Delta Says SkyMiles Are Low Value, You Should Believe Them

Kyle Potter of Thrifty Traveler is burying the lede here, by highlighting a ‘deal’ of 70,000 SkyMiles roundtrip in Delta economy between the U.S. and Japan: Delta is advertising a ‘deal’ between the U.S. and Japan for 121,000 miles roundtrip in coach. And Delta says you can find this special price if you book March 28 – April 5, 2023.

The ‘regular price’ of roundtrip domestic coach awards used to be 25,000 miles. Delta now considers it a ‘discount’ to pay 26,000 points roundtrip for Minneapolis – Los Angeles, a price they say is available January 25 – 31, 2023. When Delta literally promotes how low value their miles are, you should believe them.

Delta’s President has literally said he doesn’t want members to use miles to fly for free and even envisions future low value redemptions like a haircut instead. Delta has literally taken a haircut to the value of your miles. They keep raising the price of award tickets and don’t seem to be able to stop themselves.

The airline believes they’re better than competitors, and people will fly them even without providing reasonable redemption opportunities. Every other airline suffers from lower co-brand card spend when they devalue their points, but Delta does not seem to. They’ve had a strong airline operation in the past, and a stranglehold over their top markets.

They even make awards on their flights available to their partners who charge fewer miles than Delta offers those same seats to their customers for – by orders of magnitude.

There are only two rational reasons to put spending on a Delta credit card.

  1. You’re being bribed with enough miles as part of an acquisition bonus, that it’s still worthwhile, and you need to spend to earn that bonus.
  2. You’re flying Delta anyway (probably hub captive) and you’ll accept much lower redemption value for your miles in exchange for credit towards elite status.

For two decades I’ve pointed out that even if you wanted SkyMiles you’re better off getting an American Express card that earns Membership Rewards, since you can earn points faster, and then transferring those points to Delta (plus having the option value of transferring them elsewhere). You’re much better off, of course, transferring those miles to most programs other than Delta.

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. My daughter and her friends are PSP bound (maybe) in April. Yeah yeah I know. Spring break.
    The old ‘normal’ redemption was 25,000 miles R/T. Peak would have been 50,000, and you might have been lucky to score first class instead of coach if you were lucky. Yesterday Delta (AA and UA) wanted anywhere from 65,000 – 80,000+ for a R/T ticket at crazy times; and to add insult to injury, long layovers (and I’m not talking 90 minutes either).

    The cash cost for a tickets started in the mid $600’s and went to $1200 ish.

    As of this morning my daughter didn’t care because she hasn’t been on vacation in 2 years and has 200k Delta miles. The 69k redemption looks good to her. Is this how all 30 somethings feel?

    dh

  2. The only reason to have a Delta-branded American Express credit card, at least with respect to the Reserve card, is the tiebreaker for first-class upgrades. If you’re a diamond vying for one seat with 75 other passengers on the upgrade list, having a Reserve card and also hitting the spending threshold constitute two tie-breakers. To me, that’s worth it in an era of 75-passenger upgrade lists.

  3. FNT Delta Diamond:

    I dont know any DMs that don’t buy 100% F/Premium these days. Does anyone get upgraded anymore, anyway?

  4. Overheard on a MCO-ATL flight sometime next summer…
    “Today we have a very special offer on the Delta Platinum AmEx. Sign up today to get a bonus of ONE MILLION SkyMiles! That’s enough for two people to fly round trip anywhere in the United States. FAs will be coming around with applications…”

  5. Oh God please Gary, whatever you say or do please don’t invoke Mr. “You know who”. Tongue in cheek!

  6. @Mark

    I have >50% UG success in 2022 as a DM. Most of my flights are between ORD/MDW, FLL and MDT…all via ATL. I tend to buy my tickets close in so my fares are higher than average and I tend to not fly during busier travel times. My UGs on DL ad a DM are about the same as by UGs on UA as a 1K but worse than on AA as an EXP (yes, I have all three). Problem with the AA UGs is that you have to fly AA.

  7. @mark: I’ve done over 140 segments this year. I’ve only sat in economy twice. If the flight is long enough for a meal service, I buy first-class outright. Anything less than that I take my chances; either with a complimentary upgrade or a low buy-up offer. As a diamond medallion, million miler, and Reserve card holder who’s hit his spending threshold, I’m always among the top 3 or 4 passengers. It seems like I only bump below number 2 when someone is traveling with a wife.

  8. @mark
    I am a DM and I buy 99% main cabin tickets. I earn DM flying 99% domestic. So I tend to get a little grumbly listening to people who earn DM flying 5 or 6 International premium seats.
    I am not hub captive but Delta is pretty much the only one that flys to many of the secondary markets I travel to. With the constant hits to the program I have considered switching carriers. AA would be my only other choice and I haven’t been able to see any value in that other than maybe better partners that I would never fly on. I would switch to Alaska but there isn’t enough availability for me out of TPA.

  9. Even if you’re in a Delta hub (my condolences) a set of cash back -> brokerage account every quarter is better than any dumpster file “sale” delta will give you.

  10. I know many lament the shift away from fixed redemptions, I know I do. Then again, a round-trip for 25k miles in 2000, adjusted for inflation, is something like 43k today. Even with a revenue-based points redemption, and living in a DL fortress (MSP), I routinely am redeeming for anywhere between 1.4 and 2.0 cpp. I think where it’s pinching people is those who MS piles of points and expect to fly business or first to any destination and on any date they want. That’s fine if you want to do that, but for the average traveler who is somewhat flexible on dates and somewhat flexible on destination, it’s still pretty easy to accumulate a good pile of points using other Amex cards, transfer them to DL, and fly your family on a few trips a year.

  11. Gary.

    Taking the time to proof read, is paramount.

    (In here) …price they say is available January 25 – 31, 2013.

    2013?

  12. The other reason to put money on a Delta credit card is to meet the threshold to waive the spend requirement for status qualification. I don’t maximize value on $25k of spend a year but that’s a small price compared to the cost fo qualifying for a revenue-based elite status.

    I think the correct way to think about skypesos is like southwest points. Whatever the main cabin cash price on domestic routes, you can usually pay with points instead at around 1.3c per point. Occasionally something substantially better shows up, also usually domestic main cabin. Awards count for status qualification so I’m almost indifferent between cash and points. Forget partner awards, obviously forget anything “aspirational” in J. With these expectations the program doesn’t disappoint.

  13. Gary,
    under the category of yet another “the lady waileth too much” article and given that your article that you link is SIX YEARS OLD and you have been railing against the redemption values for Delta SkyMiles incessantly since, when you are going to admit that:
    1. You really don’t understand the value of loyalty programs as purchase drivers given that Delta has only increased the cost of its award tickets relative to other carriers, according to your articles?
    2. Delta’s greatest revenue growth over the past six years has been in competitive coastal markets including its hubs at LGA/JFK, BOS, LAX and SEA – and DL is now the largest carrier by revenue in all of those hubs except for SEA – on top of its position at ATL, DTW, MSP and SLC so Delta isn’t relying on hub dominance to grow its revenues since loyalty programs should make more of a difference in competitive markets than in hub captive markets.
    3. Delta – like every other large jet publicly traded airline -discloses the value of the award travel and the number of awards in its 10Ks and DL’s values for those statistics are very much in line with AA and UA; unless DL is selling a lot more “low value” awards than AA or UA, SkyMiles are viewed competitively by actual passengers of each airline.
    4. the Amex deal might be Delta’s greatest strategic move EVER – and for some reason – which you have never admitted, let alone addressed, Amex is willing to pay Delta a heck of a lot more money than AA or UA get from its card partners, something that both of the latter have tried unsuccessfully to change.

    Some might take exception to me challenging you yet again but when you have been saying the same thing for years and still rail w/o providing real solutions to DL passengers on how to maximize the value of SkyMiles, there really isn’t the thought leadership you tout.

    When readers like Alex seem to understand how to put SM into the proper perspective better than you, you might do well to acknowledge that thought leadership actually resides with your readers that actually fly Delta

  14. “you might do well to acknowledge that thought leadership actually resides with your readers that actually fly Delta”

    So physically flying on Delta makes someone smarter to talk about the value of their skymiles program? Not that you normally have logic, but even this is dumb for you.
    And btw… why do you keep coming back to Gary’s blog for thought leadership if you don’t think he has any? This blog seems to be your first, second, and last stop of the day. If I didn’t think Gary had thought provoking ideas/articles/insights (that I don’t always agree with), I’d certainly stop coming back to read his blog. You, however, are here multiple times a day for his though leadership. Really says something about the low value of your words when you’re here EVERY DAY to read Gary’s thoughts.

    “Delta isn’t relying on hub dominance to grow its revenues since loyalty programs should make more of a difference in competitive markets than in hub captive markets”

    Funny, even Delta says they rely on their dominant “core” hubs to make their money in their investor relation materials. You should probably call up the C Suite at Delta and tell them they don’t know what they’re talking about. Growing revenues is a bit pointless if it doesn’t translate to margins.

  15. I like DL and fly them when the route makes sense (which for me it often does not), but I also find their redemption prices in miles to be ridiculous. I credit my DL filing to Skyteam partners where I can often use them to fly international business class for 59.5K miles. And Amex Plat takes care of Delta lounge access.

  16. Tim Dunn.

    Spot on. As I read the articles on this blog, posted by Gary, being a self -imposed “expert”, Gary, at times, embarrasses himself, with his knowledge, or lack thereof!

    As participants on Gary’s blog, I don’t believe, any of us, read Gary’s posts, to criticize him. However, when we read what he writes, and due to the venue, which solicits responses, it’s acceptable, for us who have strong convictions, to comment, in particular if we have knowledge of the issues.

    I have been in the hospitality industry over 55 years. And have a myriad of experience in every possible aspect of the entire industry. I have never, nor would I ever, classify myself as an expert!

  17. @ Gary — At least the new LAX SkyClub is gorgeous. Looking for someyhing happy to say about DL these days…

  18. Delta began the race to the bottom of the major airlines awards programs. First and for years nose-bleed awards prices affectionally called Delta pesos and then around five or six years ago the final humiliation of the elimination of the award charts. So they could charge whatever they wanted whenever they wanted. An absolute disgrace. Soon the others followed suit with their awards programs. Today an abomination.

  19. Jeff R.

    Sounds really interesting, confusing and a bread crumb trail.

    What it tells me, a lot of midnight oil burned in the Board room, throwing darts at anything and everything that can suck, Loyalty paying members into.

    It’s obvious to me, that not one of the programs, make sense, and were thought threw. Amazing how they reach their decisions, only to quickly experience, “not acceptable” from participants.

    Can of worms, one and all!

  20. Jeff,
    despite the fixation with loyalty programs – which Delta did not invent but might have perfected from a financial standpoint – they clearly do not move the needle in terms of passenger behavior that so many people (at least on blogs like this) seem to think.
    those that seem to be able to put their loyalty program in the proper perspective, including figuring out to rank it among other factors affecting purchase drivers, seem to be best able to use SM and other loyalty programs for what they are designed to do.

    MAX,
    I didn’t write that DL’s profits come most from its core hubs but that Delta’s revenue growth on a percentage basis has come from its coastal hubs which are much more competitive and where loyalty programs should matter the most – if they are significant purchase drivers.

    The fact that American and United have copied Delta’s moves regarding loyalty programs says that Delta’s moves really do make the most since and there really is nothing to be gained from trying to undercut what DL is doing.
    The airline industry has consolidated and loyalty means less. Schedules and fares are still the two largest purchase drivers – the order of which changes depending on one’s reasons for travel.
    Given that every airline has some captive hubs relative to other airlines and all of the airlines have retreated to their dominant markets while competing in major markets they each consider necessary, the number of passengers that are building airline loyalty based on the strength of weakness of loyalty programs is shrinking.

  21. @Tim Dunn “despite the fixation with loyalty programs – which Delta did not invent but might have perfected from a financial standpoint”

    Hardly, AAdvantage has a higher operating margin than SkyMiles does. Don’t just look at gross revenue figures.

    “they clearly do not move the needle in terms of passenger behavior”

    That’s silly but misses the point since they drive profit.

    “The fact that American and United have copied Delta’s moves regarding loyalty programs says that Delta’s moves really do make the most since ”

    On the contrary. First, US Airways was in the chute to make similar changes before Delta made theirs. That got delayed by the US-AA merger. Second United copied so fast they had no idea whether or not it would make sense based on actual results. And when American finally moved it was Scott Kirby’s decision *over the objection of the AAdvantage business leaders*. There was simply an assumption that Delta execs knew better, and it matched Kirby’s priors from the work done at US Airways.

    “The airline industry has consolidated and loyalty means less. Schedules and fares are still the two largest purchase drivers – the order of which changes depending on one’s reasons for travel.”

    It is correct to say that there are fewer choices, and less need to differentiate in terms of *air travel purchase decisions* but air travel is a low margin business for legacy airlines.

  22. @Robert “It’s obvious to me, that not one of the programs, make sense, and were thought threw. ”

    This is a silly statement, since the loyalty programs are the biggest profit drivers of the major airlines and United, Delta and American each borrowed $6.5 – $10 billion backed by these programs during the pandemic. They are good businesses!

  23. Gary,
    thanks for your reply.
    The simple fact is that DL has been the prime mover WRT agency commissions, loyalty program changes and other significant strategic changes to the way airlines operate. What other airlines intended to do doesn’t change what actually happened.
    And given that DAL’s total margins have consistently been far above AAL’s, DAL has a better perspective of how to do everything that matters to running an airline including growing in highly competitive markets that matter to Delta’s corporate customers which clearly drive a large portion of DAL’s highest value revenue. Since businesses generally allow their employees to retain loyalty benefits, there is a disconnect between the source of payment for a substantial portion of air travel services and the benefits from loyalty programs.
    Prior to covid, Delta generated larger profits from running its airline than it did from its loyalty program. It is very possible in a couple years that their airline profits will exceed their profits from their loyalty program even considering that they get more revenue from Amex than any other airline in the world gets from its card partner.
    The fact that AA is as dependent on AAdvantage as it is for its system profits shows that they haven’t found the balance in running an airline in its totality – which your readers repeatedly note results in a lower quality experience and a “all things to all people” approach to its airline business.

    and, with all due respect, it still shows that being a leader in the miles and points world means being able to recognize that airlines know very well what moves their revenues and how their loyalty programs fit into their profits. Having the lowest price rewards clearly doesn’t drive the revenues that airlines need – which is why there is a disconnect between what you write and reality – and that is just as true for other loyalty program writers.

  24. @Tim Dunn – “it still shows that being a leader in the miles and points world means being able to recognize that airlines know very well what moves their revenues and how their loyalty programs fit into their profits.”

    You might assume this, but it’s not correct at least at all points in time. American now realizes that they weren’t doing the accounting correctly on their New York operation when they scaled it down, because they lost card signups and spend. They should have been attributing some of that revenue to the New York hub. It looked unprofitable, but now that they’re flying more intentionally and partnering with B6 out of New York they see card signups and significant spend – because they’re more relevant to the New York market.

    Don’t assume that “the business has the data, and knows more than outsiders” – I wrote about this phenomenon in 2018 and 2019, my columns on this were discussed widely inside the company. And they now largely share the view I articulate at the time.

  25. Delta can do whatever they want with points earned in the future but devaluation affecting points you already earned is a form of theft.

    Delta has no incentive to act honorably as long as customers will continue to do business with them while Delta picks your pocket.

  26. Jim Worrall.

    Jim, help me understand, why people stay in these programs? Particularly, when they continued to get screwed, with no foreplay or even a kiss?

    Sounds extremely masochistic to me. They bitch and complain, but they continue in the program.

    It begs the question, “why”?

  27. Gary.

    Be advised, I know very well, all these programs are to ballon their bottom line.

    What I am saying, why are there soo many changes? I am not aware of one program, that hasn’t changed, and significantly, from when it was initiated.

    I read considerably more complaints, than kudos, from members, who constantly tear the programs to shreds.

    It’s a phenomenon, that well over ,50% bitch, but continue in the program. Amazing!

  28. Gary,
    if adding flights at NYC were simply a matter of properly accounting for loyalty program benefits by city, then AA clearly doesn’t see the same math in Chicago or LAX, both of which are large corporate travel markets but where AA has still shrunk.
    AA has re-added flights to NYC in its decades long NYC schizophrenia because they realized that they must have a presence in NYC and they were too small relative to DL and UA. Nowhere is there any evidence that their latest attempts will work but they hope the NEA will make the difference that hasn’t worked for them on their own over the past 20 years (remember that the biggest reductions in AA’s JFK network came when B6 started service to the Caribbean). There is no assurance – and a lot of doubt – that the NEA in its present form will even survive esp. in order to get a B6/NK merger approved.
    AA simply has no other strategic choice but to keep trying in NYC just as they hang on in Chicago because they cannot survive as a southern tier (CLT, DFW, MIA, PHX) airline. Just because they hang onto dysfunctional northern hubs doesn’t mean that their loyalty program accounting suddenly changed anything but that they have come up with yet another excuse to give NYC another try.

  29. @Tim Dunn – “if adding flights at NYC were simply a matter of properly accounting for loyalty program benefits by city, then AA clearly doesn’t see the same math in Chicago or LAX, both of which are large corporate travel markets but where AA has still shrunk.”

    Duh. (1) AA is smaller in NY than Chicago, it is relevant in Chicago though not the largest. They are also relevant in LA. They were not relevant in NY in 2019. (2) NY is a more important card spend market than Chicago.

    AA earns money off card. They need to be relevant in the NY market to garner a share of NY card wallet. Those revenues need to influence network decisions. They didn’t before, but do now.

  30. DL is the most profitable and highest passenger rated airline of the US3 airlines, so its business model works very well as it is.

    The market says that it’s much better for an airline to spend on IFE at every seat, constantly delivering bags within 20 minutes, etc. than on providing a richer FF award structure; the airlines who do the latter all fare much worse in the marketplace (lower profits and much lower passenger satisfaction).

  31. Gary,
    AA doesn’t report hub profitability – neither does any other airline. AA will and NYC at a loss in order to attempt to find relevance in NYC and try to cut losses in NYC through the NEA.
    Nothing has changed except for the NEA that made AA go back to the NYC market one more time.
    There is ample data that AA still underperforms DL and UA in major markets, esp. in premium revenue – exactly the same reasons why AA had to pull down its NYC presence before.
    The notion that they miscalculated the value of card contributions in NYC but got it right in Chicago and LA where they continue to shrink is completely nonsense. You truly are hoodwinked.

    It’s hard for you to admit that your way of seeing the world – through the lens of loyalty programs – isn’t reality at all but that is absolutely the case.

    Jake gets it. DL invests where it generates the highest returns. Ranking as Gary’s most generous airline for award travel simply isn’t on their radar – and should not be.

  32. The POS outfit that is Delta left me stranded for 24 hours (again) at JFK last August, and no accommodation or anything provided. I submitted a request to at least get the official reason for the delay that broke my connection (so I could seek reimbursement for my own hotel arrangement via my credit card), but three months later there is still no reply. So much for operational reliability and customer responsiveness.

    Poor operational reliability, poorly performing stock with lesser upside compared to peers, and a mileage program this is basically a scam.

    Thank you Gary for calling DAL out.

  33. Marco.

    They are ALL scams! Problem is, once you get hooked, no matter how bad
    It gets, you have already been brainwashed!

    Further, after reading the experiences of others on this blog, no matter how devoted someone is to one brand, if you get brave and cut the cord, what other program doesn’t have similar or worse programs?

    Obviously, there is no clear choice. You, like everyone else involved in a point programs, all have caught, “pointitis”!

    Give thought, about your New Years resolution. What will you do, come 2023? Make your point!

  34. Out of SEA, Delta has some pretty decent award trips. Much less than AS. Plus I book economy, and they are very good about moving me if I do not like my seat. If you book economy on AS, you are stuck with whatever seat they put you in, they will not even try to work with you.

    While I do not put spend on my Delta card, the sign up bonuses have kept me flying all over the place really reasonably. I think the best deal was 2500 miles from SEA-PVR non stop Main Cabin.

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