Delta: guesses validated, and more predictions

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Delta’s 2015 award chart for travel from the Continental US, Alaska, and Canada was released today.  You can find the new chart here.  The predictions I made yesterday were very close to the chart they released.  So, I’ll take a moment to gloat:

Yesterday, I said “my guess is that the 2015 award chart will be essentially the same as the chart that is effective for travel beginning June 1, 2014, but with the addition of new levels in between the current Saver, Standard, and Peak levels.”  And, that is basically what the new chart shows.

I also said “I’m sure that there will be some changes to the award ranges, but I do think that most of the ranges will stay essentially intact.”  I was only partially correct here.  I was correct in that almost all of the Level 1 awards remain the same: 28 out of 31 stayed the same.  The three that changed became slightly cheaper.  On the other hand, many mid and top level awards changed: 21 out of 31 mid-tier awards became slightly cheaper.  None increased.  20 top level awards changed: 18 became slightly cheaper. 2 became slightly more expensive.  Aside from these small changes, though, I think its fair to say that my guess was very close to correct.

It’s interesting too, that the new chart calls the tiers “Level 1”, “Level 2”, etc.  In a prior post, I wrote “For simplicity, let’s simply call the levels 1, 2, 3, 4, and 5.”  I nailed that guess without even trying!

What’s next?

We still don’t know much about future award availability or whether Delta will use the extra award levels to move closer to a revenue based redemption system.  However, since my award chart guesses were so good, let’s assume some of my other recent predictions were right as well.  If so:

  • Level 1 availability will decrease, but the combined availability of Level 1 and Level 2 will be almost double today’s Saver availability.  For most economy awards, that will be a net gain for those seeking to use miles.  On the other hand, some level 2 business class prices are pretty darn high, so getting a good deal on business class fares may be even harder in 2015 than it is today.
  • Delta will not tie award level availability to ticket pricing.  Award pricing will be based on how many seats in each fare class are expected to go unsold rather than on the total ticket price.  Please see my extended argument about this point in yesterday’s post.
  • Partner awards: Delta will charge Level 1 prices for partner travel booked with Delta miles (this is a new guess that I hadn’t previously published).  And, when trying to book Delta flights with partner miles, you’ll have to find Level 1 award space.  If I’m right about Level 1 award space going down, this will be a big problem for those who want to use partner miles on Delta!

 

General thoughts

Delta’s huge chart devaluation that takes full effect June 1, 2014 was a big blow to those of us with piles of SkyMiles ready to burn.  The announced changes for 2015, though, are mostly heading in the right direction:

  • By basing mile earnings on flight prices rather than flight distances, Delta is wisely rewarding people proportionally to the amount they spend with Delta.  The old system actually rewarded people for using up more of Delta’s resources even if they didn’t pay more (i.e. you would previously get more miles by flying out of your way on multiple legs than you would get from a direct flight).  For many people, this will mean earning fewer miles, so I understand why they hate the new approach, but I find it hard to argue with the business rationale.
  • Delta says that they will allow one-way awards for half the price of round-trip.  That’s huge.  It means that we can now use miles opportunistically based on which airline has saver level availability.  For example, use Delta miles to fly your outbound route, and use United or AA miles (or even Penny Points) for the return.  United and AA have long offered one-way awards, and now it will be great to have Delta as an option too when mixing and matching. 
  • Delta promises to fix their online award booking tool.  Finally!
  • For those without enough miles to book an award, Delta will now have the option to book with miles + cash.  It looks like this would be roughly equivalent to buying miles at 1.6 cents each.  While that’s more than I would pay prospectively to get Delta miles, it is very reasonable in some situations.  For example, if you can find a Level 1 business class award from the US to Australia, it would cost 160,000 miles round trip.  If you were to buy the miles needed for that trip at 1.6 cents each, the cost would be $2560, which is a steal for a business class round trip flight to Australia.

Now that you’ve seen Delta’s 2015 award chart, what do you think about their proposed changes?  Am I still crazy in being “mostly happy” about them?  Comment below.

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