Delta SkyMiles Earning Will Be Revenue-Based in 2015 (The Sky is Not Falling!)

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Earning Delta miles will be revenue-based starting January 1, 2015. Instead of earning miles based on the distance of your ticket, you will earn based on the price you paid.

 

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Though earning miles is changing drastically for Delta flyers, redeeming them might not change so drastically.

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What do we know so far and what do we still not know?

I stumbled on this change while researching the Delta award chart for another post. The new change is being teased there. I’ve supplemented that information with information from this Wall Street Journal article. (Hat Tip Amol from Hack My Trip)

Changes to Mileage Earning

The page set up for the 2015 SkyMiles program says:

“As part of our ongoing efforts to improve your travel experience on Delta, we’re making updates to the SkyMiles program. Starting January 1, 2015, miles will be earned based on ticket price to better reward customers who spend more with Delta. We’re also creating more redemption options and increasing Award Seat availability at the lowest price points.”

The Wall Street Journal says that “passengers with no elite status in SkyMiles will receive five miles for each dollar spent on tickets, excluding government taxes and fees. Those in the highest elite level will receive 11 miles per dollar spent.”

That leads me to speculate that earning might be:

  • no status: 5 miles per dollar
  • Silver: 7 miles per dollar
  • Gold: 8 miles per dollar
  • Platinum: 9 miles per dollar
  • Diamond: 11 miles per dollar

Previously folks who flew very cheap economy tickets were earning between 10 and 30 miles per dollar spent. So the earnings for those of us who only fly paid tickets when the price is very low are being slashed.

But the earning potential of folks who pay out of pocket for business class fares is going way up.

For readers of this blog–cheap travel connoisseurs–this shift in earnings rules is very bad.

But it’s not the end of the world for me. I can’t remember having flown a paid Delta flight since 2008. I get my Delta miles from credit card spending and bonuses on cards that earn Delta miles, Membership Rewards, and Starpoints.

If you’re in the same boat, earning all of your Delta miles from credit cards, this change in how Delta miles will be earned that was announced today has no effect on us (as far as we know so far.)

Changes to Miles Redemptions

The Delta award chart lists several changes coming January 1, 2015:

  1. More Award Seats available at the lowest price levels.
  2. One-Way Awards at half the price of round-trip tickets.
  3. New Miles + Cash Award options.
  4. An all-new Award Travel shopping experience.

1. More award seats available at the lowest price levels is good.

2. One way awards for half price is good.

3. New Miles + Cash options are probably neutral. I doubt they’ll be a good enough deal to use, but they won’t hurt us.

4. Uh-oh! Four could be the killer. What we don’t want is for Delta’s redemption side to go revenue-based too.

Imagine a roundtrip business class ticket to Europe for $5k–a reasonable cash price at least with the complications I usually include on my award tickets.

You can book a business class roundtrip with Delta miles for summer 2014 for 125k miles.

If Delta’s redemptions went revenue-based at 1 cent-per-mile, now you’d have to spend 500k Delta miles for the same ticket!

But does and “An all-new Award Travel shopping experience” mean a revenue-based experience?

This is what the Wall Street Journal article says:

Delta plans to introduce a system with up to five tiers of redemption choices so customers will have a wider variety of options, including one-way reward tickets and the ability to redeem tickets using both miles and cash, [vice president of Delta’s SkyMiles program] Mr. Robertson said. The new redemption levels will be disclosed in the fourth quarter. Delta intends to introduce functions next year that will allow customers to be able to use miles to purchase ancillary products such as seating in the roomier Economy Comfort coach seats.

As an example, he said, awards tickets to Europe, now priced at 60,000, 90,000 and 125,000 miles, could be broken into five tiers, including tickets for 75,000 and 105,000 miles. He also said the company plans to improve its website to make shopping and redemption simpler.

Did you get that?

  • We’re getting five tiers of mileage prices! Up from the current three. (I can’t wait to see their names.)
  • We’re getting the ability to use miles to book Economy Comfort.
  • The example he used of the five tiers is NOT revenue based!

I’m cautiously optimistic that the five tiered redemption system will NOT be revenue based. We’ll know more in the fourth quarter of 2014 when the changes are fleshed out. Let’s hope we learn closer to October 1 than December 31, but Delta has a bad history of no-notice devaluations.

If redemptions do not become revenue based AND if we see more award space in the lowest priced award space tier, mileage redemptions with Delta will actually get better on January 1, 2015.

That conclusion–that Delta redemptions could get better–goes against everything I know about SkyMiles, so we will have to see whether those ifs come true.

Recap

The number of Delta miles you earn on flights will be based on the price of the ticket you bought, not the distance you flew or the cabin you were in, starting January 1, 2015.

There will be a number of changes to redeeming Delta miles starting January 1, 2015 also. These include the ability to book one way awards, more award space available at the lowest price tiers (I’ll believe it when I see it), and five tiers of mileage prices.

As far as we know, mileage redemptions will NOT be revenue-based, and the SkyMiles boss’s example of how the five tiers will work in the Wall Street Journal article doesn’t sound revenue-based. But we may not know for sure until the fourth quarter of 2014.

I will be all over this story this year as it develops.

My first reaction is that the sky is not falling for me or most of us because we don’t earn many Delta miles from flying and we haven’t heard negative changes about redemptions. What is your first reaction?




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35 COMMENTS

  1. As a delta diamond that travels a lot of international coach…

    This means the front if the plane will be full and the back of that plane will be empty. Delta is never the low cost option on these flights and the only reason to choose them is for milage earned.

  2. I would agree that if you earn your Delta miles primarily from CC spend, and IF the new redemption charts are not awful (fingers crossed), then you actually might be ok or even come out ahead on this. You will earn the same miles and get the same awards or maybe better availability, if Delta can… uh… be… uh… believed. Ahem. Well, anyhow, who is sucks for is the mileage runners and economy frequent flyers (the irony!). Many travel bloggers are saying this sucks for almost everyone, but that’s not yet clear. Many commenters on said blogs are saying they’re dropping their Amex cards in response, but it seems like the precisely wrong reaction.

    • Yes, I think a lot of that reaction is to try to “scare” Delta into not making the changes or to scare AMEX into scaring Delta. But I agree that dropping the AMEX card doesn’t make much sense with what we know SO FAR.

      • If substantial numbers of AX cardholders actually dump the card AND tell AX why they’re dumping it, then yes – that’ll prick up both sets of ears and the message will get through.

      • – JL100: Mark my words: those redemptions change for BE jump by AT LEAST 40%
        – Rachel: sure one ways will be great but again, those will jump too. Maybe not as much as BE, but they will jump!

      • Sure they’ll be great to have, but the levels WILL jump. Knowing he the operate, I’d plan at least 40% increase for the back of the bus and double for a comfortable seat.

  3. this change does not hurt me much because i do not fly delta that often. it could sometimes be better news, because, if i fly delta, i usually fly biz trip and i could earn more skymiles for expensive tickets (i got reimbursed). i assume delta means that their MQM miles will be revenue based in 2015.

    my concern has been, how do i maintain my delta silver madellion status? i want to maintain delta medallion because 1. i can earn skymils when i stay starwood (to maintain my starwood plat, i spend at least 21 nights at starwood); 2. 25% bonus skymiles when i fly delta; 3. ocassional benefits for delta medallion members such as free museum admission in NY city.

    every year, i spent $25K on amex delta card to earn 10K medallion miles (plus rollover medallion miles) to maintain my delta silver medallion. this year, i won’t be able to keep silver status (currently on my account MQM 5K miles only) unless i spent $50K on Amex delta that will earn 20K MQM miles.

    question: are there any other ways to earn delta MQM miles besides flight delta? are there any amex delta personal credit card that has 10K MQM sign-on bonus (I already have amex biz card for years)?

    • Delta Reserve and Dela Platinum both earn MQM, but I think you are paying a humungous opportunity cost for Delta Silver that you couldn’t possibly be earning back. You should ditch status based on the info you’ve given.

  4. also, i am excited at one way redemption. but i wish delta makes their redemption availability better. i need to bring my family of 4 people for vacations. after i see a good award flight, whenever i changed the passengers number into 2 or 3 or 4, the award tickets increase sharply. that is why i already accumulate about half a million skymils and was never able to use it.

    i would like delta to release more award flight tickets for each customers’ account.

  5. Looks OK overall to me. The two worst parts of the program – miserable availability of award seats and lack of one-way awards – may be improved. I seldom pay for flights on Delta, maybe about once a year, so the earning differences are incidental. The concern is definitely if the redemption side would go revenue-based.

    • Yes. I can’t believe they didn’t give us more redemption details today and we may have to wait 9 more months.

          • Delta is not as honorable a company as people blindly believe it is – trust me. The attitude of at least one board member is like it’s his personal company and hates “giving it away”. They’re like “the honeybadger” … they don’t give a shit. (The honeybadger & Randall on YouTube). If enough flyers burn through the miles and dump AX, they’ll get the message – AX will be all over them. After all, AX might actually be the one with more on the line.

  6. I think the MOST IMPORTANT reason why this is BAD news is because other airlines (I’m looking at you, United and American) may look at this and go, ‘Hey, we want to do that too’… and THEN the sky would really be falling. So, while I’m not a Delta flyer at all, this is definitely bad news for all miles & points chasers, because United and American won’t sit around idly; instead, they will analyze closely the outcome for Delta, and if it’s successful revenue-wise, you can bet they’ll be next.

    • If they all go revenue-based on earning but stay chart-and-region-based on redemptions, I’d still be OK. We’d still have all our tricks besides mileage runs, which I never do anyway.

  7. This is really a hit at million milers/ Platinum. There won’t be any more; once you join Delta’s plan after 2015 you will have to spend a lot of money to become million miler/ Platinum status. Who has that kind of money? Big business! Sure redemption is easier (of course they want you to reduce/ spend your miles!) Platinum buyers will get about 1/3 the points after 2015 as a 2nd day traveler does now. How is that better for the customer? Delta just does not want billions (thats right BILLIONS) of flight miles just floating around out there anymore for use at the whim of some customer(ugh!). They don’t want that anymore. Take that with a grain of salt and call your doctor in the morning.

  8. I agree, churners will be fine. I agree that dropping the Delta branded cards is the best idea (if for no other reason than you can get them later. I mean amex supposedly will give you a bonus again 2 years the account is closed. So 50K points or 25K per year is much better than the spend I would have to put on it anyway (which is none!). The amex transfer option is the only play that makes sense. One silver lining, maybe some saver space in Delta?

  9. I can see why those who have huge amounts of miles through credit card promo’s have little to worry about. But for the vast majority of flyers who pay coach and accumulate miles (I’m sure even many people who post here and on other sites who claim to rake in tens and hundreds of thousands of miles annually with CC and other points promos) the change is not good. And don’t think for a minute Delta’s change won’t be ignored by the other programs, they’ll simply follow suit.

    From the airline’s point of view, with all of the 30 – 100,000 bonus miles promo’s plus other miles gathering programs in the marketplace, it’s not hard to see why they’re changing to a revenue based model. If one thinks about it for a minute, they are flying a lot of “non-revs” (pass riders) around the world. Not that my heart bleeds for them for one single minute either. They’ve turned their aircraft into sardine tins with winglets as well as nickel and dimeberging all those in the unwashed cabin on the plane.

    Right now with their cash piling up (reminds me of Robert Loggia’s line in the early part of Scarface when he meets Tony Montana) don’t be too surprised to see the silver, platinum, diamond, rhodium, ad nauseum levels be downgraded or eliminated – possibly the end of entire game itself. Although that’s not to say if their fortunes are dramatically reversed they won’t start clamoring for the frequent flyer.

    They’re not happy with the game (monster) THEY created, so they’re taking their bat and ball and going home.

    • I don’t think today’s changes support these conclusions. Maybe these are a harbinger of the worst, but for now, there’s no suggestion that loyalty levels will be downgraded.

      • Give it time, this is only the beginning. They’re only putting distance between announcements, waiting to see what transpires since there was little if any super negative feedback after the last devaluation scheme.

  10. I don’t mind the earning change because I don’t earn any of my miles by flying, but I do care about the redemptions, so we’ll see.

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