Delta has introduced revenue-based awards today and higher priced upgrades for travel beyond June 1, 2016. You can currently book award travel and upgrades through June 9, 2016.

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Delta’s Statement

Here’s what Delta says about the changes:

We know your miles are important, so we want to provide the most notice possible regarding Award price changes. For travel on or after June 1, 2016, the number of miles needed will change based on destination, demand and other considerations. But most Award prices will remain unchanged. To see the best availability and deals, search at least 21 days prior to departure and use our Award Calendar by selecting “flexible days” when searching for a flight.

Let’s go through this inanity line by line.

“We know your miles are important…”

Then why, Delta, do you make your miles the least valuable, and why did you eliminate your award charts?

“…so we want to provide the most notice possible regarding Award price changes.”

Then why, Delta, did you provide us with no notice? The changes aren’t for bookings made in 2016. The changes are for flights flown June 1, 2016 and later. Nine days worth of awards (June 1-9, 2016) have gone up in price today with no notice.

“For travel on or after June 1, 2016, the number of miles needed will change based on destination, demand and other considerations.”

  • Destination is already factored into the price via regions on your still-operating award chart that you removed from your website.
  • Demand is already factored into the price via the five levels of prices on your still-operating award chart that you removed from your website.
  • Other considerations” could literally mean anything. Now we literally have no idea what factors will impact the price of an award.

“But most Award prices will remain unchanged.”

It’s not even clear to me what this means. Is Delta saying it will stick with its five level, secret award chart most of the time? If so, under what circumstances will it deviate from that chart?

Let me know in the comments what this sentence means to you please.

“To see the best availability and deals, search at least 21 days prior to departure…”

Interesting that for the first time Delta admits that it jacks up mileage prices at 21 days before departure. United and American don’t do that–they tend to open more award space at the lowest levels then–but they do charge a $75 redemption fee within 21 days. (You can get around United’s.)

“…and use our Award Calendar by selecting “flexible days” when searching for a flight.”

Obviously search with the new award calendar to see five weeks of prices. But all five weeks might be too expensive.

What does it all mean?

I’m guessing that all this doublespeak means that Delta is going closer to full-blown revenue based awards for its own flights that depart June 2016 or later. I don’t think we’ll see full revenue based quite yet where one mile equals one cent toward the cash price of a flight in all cases. I think we’ll see some awards on an award chart, where there are still 12,500 mile awards domestically, but we’ll also see some outrageously expensive awards, far more expensive than current award charts, and more closely tied to the cash price of a flight.

I also think that we’ll see partner awards price out at the same price they currently do, which is Level 1 on Delta’s secret award chart. Hopefully this never changes, and hopefully you live in a city with SkyTeam partner flights, so you don’t need to connect Delta award space to partner award space.

What Does the Devaluation Look Like in Practice?

Here is Delta’s current, secret award chart for flights through May 31, 2016.

The most expensive (Level 5) Business Class award between the South Africa and the United States is 175,000 miles on that award chart. In June 2016, the direct Delta flights from Johannesburg to Atlanta cost 375,000 miles one way in Business Class every day. (The next three examples come from FlyerTalker Wiirachay.)

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Similarly, the highest price on the current award chart for Middle East to the United States is 162,500 miles, but a one way in Business Class from Dubai to Atlanta in June is pricing at 375,000 miles.Screen Shot 2015-07-15 at 1.45.53 AM

Sydney to Los Angeles used to top out at 175,000 miles one way. For flights in June, it too is going for 375,000 miles one way! Note, however, that the partner flight on Virgin Australia is still pricing at the Level 1 price of 80,000 miles one way.
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FlyerTalker javabytes wins the prize for finding the most expensive June 2016 award so far.Screen Shot 2015-07-15 at 1.52.03 AM

Milwaukee to Auckland with three Delta flights and a Virgin Australia flight prices out at 415,000 SkyMiles one way. (I think the 415,000 mile example is a 375,000 mile award plus a 40,000 mile Virgin Australia award. It’s another issue entirely–and not a new one–that Delta’s computers adds up the price of Delta and partner flights separately when you combine them onto one award.)

So far we’re seeing direct Business Class awards top out at 375,000 miles one way or 750,000 miles roundtrip. That’s more than double the prices on the current award chart.

Luckily partner awards are the same price in June 2016 as they are now, and Delta Level 1 awards haven’t gone up in price.

Bottom Line on Award Price Changes

This change is BAD, and takes us one step closer to SkyMiles being worth a penny each. SkyMiles are the worst miles of any American airline.

But I will not abandon SkyMiles. There is not value in holding SkyMiles longeterm–I’m thrilled to have under 20,000 in my account–but there is still occasionally value in picking up one of their credit cards, getting the bonus, and booking an award quickly.

Speaking of credit cards? How will American Express react to this further devaluation of SkyMiles, since it is the issuer of Delta co-branded cards and Membership Rewards cards that earn points that be transferred to SkyMiles? At some point the average credit card user has to start reacting to the devaluation of SkyMiles and dump those cards.

Other Changes

Upgrades

“Miles needed to upgrade* will increase, and to provide greater access to these upgrades, we’ve expanded the eligible types of fares.

*Includes seats in Delta One, First Class and Business Class”

Of course, Delta “Delta-ed” (my new word for “obfuscated”) here and didn’t list the prices for award upgrades. But Delta flyers are figuring out the upgrade prices one at a time, and they are going at the top of this page. Increases in upgrade prices aren’t a big deal to me because upgrades were already a bad value. But still, check out how bad they are now for travel June 1, 2016 and later.

Example:

US-Europe:
Y/B/M: 60,000 miles
S/H/Q/K: 80,000 miles

If you buy a really expensive Y, B, or M  economy fare to Europe, you will need 60,000 miles to upgrade one way. This is a terrible deal since Level 1 awards start at 62,500 miles one way in Business Class. (Not to mention Aeroplan charges 45,000 miles and American charges 50,000 miles for one way awards to Europe in Business Class.)

If you buy a slightly less expensive S, H, Q, or K fare, you need 80,000 miles one way to upgrade.

If you buy the actual cheap fares (L, U, T, X, V, and E), you can’t upgrade at all.

You will NEVER get a high value Delta upgrade with these rules.

The Rest

The rest of the changes are so insignificant, and some aren’t even changes, that I suspect they were thrown in to obfuscate Delta the real changes to the award charts and upgrade charts. Check out all the changes here.

Bottom Line

SkyMiles are even less valuable today than yesterday. There are still more valuable uses of them and less valuable uses of them, so I’ll continue to keep an eye on the program and use it to my advantage.

 

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