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It’s not like Delta isn’t known for devaluing its currency as frequently as possible, but at a time when the airline industry claims to be on its knees and very few people are flying out of choice, Delta’s decision to quietly increase the cost of partner awards by 25% (and more) is very hard to understand.
Thrifty Traveler seems to have been the first to spot that anyone wanting to use SkyMiles to book awards on Delta’s partner airlines will now have to have an even healthier pot of miles than ever before…and that’s regardless of what cabin they’re looking to book.
I’m not going to go into this in great detail because (a) Delta and SkyMiles isn’t my forte and (b) Thrifty Traveler deserves to get the readership for this (so head over there for more in-depth analysis) but, in a nutshell, this is what appears to have changed:
- Air France, KLM & Virgin Atlantic transatlantic Economy Class fares now cost 35,000 miles each way (up from 25,000 miles each way).
- Air France & KLM transatlantic Business Class fares now cost 95,000 miles each way (up from 75,000 miles each way).
- Virgin Atlantic transatlantic Business Class fares now cost 95,000 miles each way (up from 86,000 miles each way).
- Korean Air & China Airlines transpacific Economy Class fares now cost 40,000 miles each way (up from 32,500 miles)
- Korean Air & China Airlines transpacific Business Class fares now cost 102,500 miles each way (up from 32,500 miles)
The rates shown above are for travel 60+ days from the day of booking. The rates for bookings 21 – 60 days before travel are significantly higher…
…and once you start looking to make a booking within 21 days of travel the costs get egregious:
Not all partner awards have taken a beating but the ones that are shown above have increased by an unacceptable margin – there’s no excuse for this. Delta has made some positive moves this year when it comes to looking after its passengers but each time I start to think that it’s an airline I’d like to consider flying more often, it pushes through a major stealth devaluation like this one and reminds me of why it’s an airline whose loyalty program cannot be trusted.
Considering Delta just put up the SkyMiles program as collateral for a $6.5bn loan, I wonder what the airline’s creditors think of Delta devaluing a key asset?
We will see more of this. It might feel counter intuitive to do this now, but it actually, from Delta’s perspective, makes sense. They can up the price while people are not using the miles so the pain / backlash will not be as great as if they did the price increase during times of heavy travel. Others will follow. Remember, it was a small, regional airline that first introduced check bag fees. The other watched and then pounced for revenue opportunities….fast forward a few years later and it was the fees that created nearly all the profits for the airlines. Whoever backed Delta’s recent use of SkyMiles as collateral better have another look at their loan terms…they might have missed this little trick. On the other hand, think about the behavior that the devaluations are designed to encourage…more loyalty credit card spend and more flying on Delta…so the case for Delta improves…..