Delta recently announced a new twist on redeeming its SkyMiles, and you’re not going to like it.
SkyMiles are notoriously difficult to redeem at the “saver” level as it is. Sure, you can spend 360,000 miles for a roundtrip ticket to Europe in business class, but you could spend less than half that on American/Oneworld or United/Star Alliance. I don’t have a scientific study to back me up on this, but I do spend a lot of time helping clients redeem their frequent flyer miles for the best value, and finding saver level awards on Delta is usually a challenge.
After adding minimum spending requirements for elite status and drastically reducing how many miles most SkyMiles members earn for tickets, the airline is now planning to raise the number of miles needed for a ticket based on, “destination, demand and other considerations.” How’s that for a nebulous set of criteria? This change will go into effect for award travel starting June 1, 2016.
What Delta is effectively saying is that they will charge whatever they think they can get away with for an award ticket. And other than switching your loyalty, there’s nothing you can do about it.
Delta’s ultimate goal is to cap the value of their miles at two cents or less each. Savvy travelers know that it’s possible to redeem miles for up to 10 or 12 cents each in many programs. Delta looks at your loyalty as a cost, and wants to reduce that, even if they anger you in the process. They have already fixed the earning side of the equation by switching mileage earning from distance-based to spending-based, a change that negatively affected most SkyMiles members. Their target now is the redemption side. Their ultimate destination is a program like JetBlue, Southwest and Virgin America, where the value of points is fixed. The number of miles needed to redeem for a ticket will tie directly to the ticket’s cash cost. For instance:
Under the SkyMiles program as it is today, a roundtrip saver award ticket from Atlanta to London in business class (if you can find one) costs 125,000 miles. Over the same January dates I checked, prices on Delta are about $4,200, or 3.4 cents per mile in value. At a fixed rate of two cents per mile, that same ticket would cost you 210,000 miles, an increase of 85,000 miles.
This is the direction Delta appears to be headed. Effectively they are already there by tightly controlling the availability of saver awards, pushing travelers instead to their middle tier awards, which provide just about two cents per mile in value. But eventually they will shut out even us determined travelers who know the best ways to maximize SkyMiles despite Delta’s restrictions.
One more prediction: United will copy this policy shortly. They have followed every major frequent flyer program change Delta has made in the last few years, even adding a few of their own.
Of the Big Three, American looks to be the only sane place to commit your loyalty at the moment. I’ll reserve further judgment until I see what their 2016 AAdvantage program looks like.
In the meantime, caveat emptor.