Am I done with Delta?

25

Delta 2015 started off nicely.  While not everything was perfect, saver level awards were more plentiful than ever before, the ability to book one-way awards was a godsend, and the award calendar actually seemed to work pretty much as advertised.  Many were upset that Delta had changed to a revenue based mileage accrual scheme, but I didn’t care.  By far, my Delta miles are earned from credit cards and the Suntrust Delta debit card rather than from flying.  The fact that there would be fewer miles in circulation is a good thing for those with many miles to spend: less competition likely means more success in booking inexpensive awards.  In the post, “My manufactured spend strategy,” I declared my intention to continue to earn Delta miles and elite status through credit card spend.  It was the top bullet on my list of goals:

Continue to qualify for high level Delta elite status for myself and my wife (see “How to manufacture Delta elite status”).

Now, as one shoe drops after another, many have asked whether I plan to continue with that approach.  First, it was widely reported that Delta removed award charts from their website.  Next, it was discovered that Delta increased award prices on many (but not all) flights within 21 days of booking.  On their own, these are irritating, but not deal-breaking changes.  With regards to the award charts, DansDeals somehow has screenshots of all of them. So, for now, you can check here if you need to.  And the 21 day thing means paying a bit more for last minute awards.  That’s bad, but its not enough, on its own, to change my overall direction.

The important question is whether these changes are just the beginning?  Now that two shoes have dropped in succession, will more follow?  How many shoes does Delta even have?  With the removal of award charts, I think it is inevitable that award prices will change regularly.  I expect that this is just a first step towards fully dynamic award pricing.  I don’t know whether Delta will move completely to revenue based award pricing (a la Southwest), but I do expect something like that to emerge.  The removal of award charts suggests to me that such changes may come sooner rather than later.

The value of Delta SkyMiles changes at the top, but not at the bottom…

The changes that occurred recently suggest to me that there will be less opportunity to redeem SkyMiles for outsized value in the future.  In the past, the best SkyMiles values have been for last minute awards and international business class awards.  The former are suddenly more expensive (in miles) than before.  The latter will likely become more expensive if/when Delta begins to dynamically price awards. 

As an aside: if you’ve been saving up Delta SkyMiles for international business class travel, there’s no better time to book your awards. International saver level awards are currently more widely available than ever before, but if my guesses are right, prices for those awards will rise steeply in the future.

So, the top-end redemption value of Delta SkyMiles will most likely drop, but I do not see the bottom dropping… Currently, Delta cardholders can “pay with miles” for flights.  When doing so, miles are mostly worth 1 cent each (I wrote “mostly” because flights costing less than $100 are a terrible deal).  I think its very unlikely that Delta will take that away.  As a result, I believe that Delta SkyMiles will continue to be worth at least 1 cent each.

I’ll continue to fly Delta, regardless

When choosing flights, I’ll always favor the airline that delivers the best experience: nonstop flights, good price, on-time arrivals, good service, etc.  Since I live near a Delta hub, that means Delta more often than not.  The value of the miles earned from flying is somewhat irrelevant.  I earn the vast majority of my miles from credit card bonuses, online portals, etc.  Miles earned from flying, in my case, are practically a rounding error, regardless of their value.

My goals depend upon elite benefits

As long as Delta SkyMiles continue to be worth at least a penny each, my goal of qualifying for high level elite status through spend is largely unaffected.  I do it primarily for the perks: free upgrades, free award changes, free same day confirmed changes, etc. I think of the miles earned as a rebate to help justify the opportunity cost of the pursuit (see “The opportunity cost of manufacturing status”).  So, the question for me is how Delta plans to enhance or degrade their elite program.  They have recently made many changes that make it more difficult for people to earn status through flying (such as the introduction of Medallion Qualifying Dollar requirements), but those don’t affect me at all since I earn status through credit card spend.  In fact, in time, those changes will probably help make my experience better by reducing the number of high level elites that compete for the same upgrades. 

Delta has made a few changes, though, that do decrease the value of elite status.  For example:

On the other hand, some things have improved:

  • Delta now offers regional upgrade certificates as a choice benefit to Platinum elites, and awesome global upgrade certificates to Diamond elites (see “Are Delta’s upgrade certificates as good as they sound?”)
  • SkyClubs are theoretically less crowded than before (I have yet to see proof of that, though)
  • SkyClubs now offer “upgraded bagels”.
  • In the past few years, the food served on Delta flights (in business or first class) has been, for the most part, really good.

Overall, while I have little trust in Delta preserving the current relatively high value of Delta SkyMiles, I don’t expect their services or elite benefits to diminish. 

And the final answer is…

As long as Delta continues to run a first rate airline, I’ll continue to fly them.  And, as long as they continue to offer a competitive elite program, I’ll continue to earn status through spend.  That said, my view of the future value of Delta SkyMiles has changed dramatically.  While I currently see many opportunities for outsized value with SkyMiles, I believe that will change for the worse if/when Delta moves to dynamic award pricing. 

How about you? Are you a Delta flyer considering jumping ship?  Please comment below.

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