Do Delta SkyMiles Suddenly Have More Value?

Delta

I know, most of the Boarding Area bloggers told you yesterday of the doom awaiting the Delta SkyMiles changes beginning next year, but for those with accumulated miles, this may actually be good news.

A short recap; Delta is changing their mileage earning method for redeemable miles (RDM) next year from one based on miles to revenue. General members will earn 5 mpd (miles per dollar) instead of 1 per mile flown with a 500 minimum. Silver elites will earn 7, Gold earns 8, Platinum earns 9, and Diamond earns 11. This is for Delta marketed or ticketed flights. Alliance partner flights may earn less.

As before, there is an additional 2 miles/dollar earned for using a Delta-branded American Express Card for Delta flights and 1 mile/dollar for everything else. If this is how you earn SkyMiles, there is no change.

Delta previously announced that earning elite status will require minimum spend of 10 cents per mile (cpm). That is, Silver elite would need to meet $2,500, Gold $5,000, Platinum $7,500, and Diamond $12,500. However, the airline also offered a waiver for those who spend at least $25,000 on the Delta AmEx cards (not required for non-US). While this latest program change has no direct impact on status, without argument most elites will earn far less RDM’s under the new method. A quick calculation shows that many, after meeting the minimum spend requirement, will earn half or less RDM’s under the new rule. While 10 cpm might be the minimum for status, Delta raised the bar to about 20 cpm for earning the same RDM’s but this varies based on routing. This will have a dramatic impact by decreasing the number of miles that are earned each year by most passengers, even elites.

How much of a change will there be?  Use the Delta Mileage Comparison Calculator to find out.

Who will earn more miles with these changes?

  • Those who purchase late expensive fares, often certain business travelers.
  • Those who generally pay more than .20/mile for airfare.
  • Most (but not all) of those who pay for first or business class.

So what’s good about this?

  • If Delta holds to their promises of more low award seat availability and an improved calendar – which they have promised before but failed to deliver – this will be a benefit to those who have saved up their miles.
  • If you buy expensive tickets on Delta, you could actually earn more miles under the new method.
  • The miles don’t expire (well, they do when you do) so they can be saved for those travel dates with low award availability.
  • And there is one long awaited benefit from this change. Finally, Delta will be offering one-way awards. This opens many possibilities like flying Delta outbound but maybe United for the return because each offers low mileage options only in one direction or the other.

What about the other airlines?

Since United Airlines nearly copied Delta’s minimum spend requirement, it does not seem unreasonable they will do something similar with RDM accrual. American Airlines is still a bit of a wild card because of the new merger but they know why Delta did this and will have to find a way to reward their own high spend passengers. Southwest already has a revenue-based system but they lack the international network of the other three.

So, should you burn your SkyMiles? 

Those who earn-and-burn now will be in a more difficult situation next year due to the increased earning requirements from flying. Instead of burning, this may be a good year to accumulate as many miles as you can because next year, it may take twice as much flying to earn the same number of miles. Of course, this requires faith that Delta will deliver on their promises and their new 5-tier award system has some merit. I certainly understand why some would be skeptical.

No, SkyMiles will not suddenly be worth more in terms of dollars but if there is a substantial reduction in miles earned next year – and if Delta delivers on their promises – miles accumulated this year will have more award opportunities next year and beyond.

Comments

  1. I agree with everything you said. I am looking forward to the one way awards. I’m one who spoke to a manager about this, who did everything he could to help me out. Anyone who understands Delta ‘ s award system knows you need to book 330 days out for high demand tickets. The problem comes when you are taking a 2 week or longer trip, because the 330 days has to include your return date. A great low mileage opportunity comes up on the outbound segment, but you lose it waiting for your return segment date. Someone with a short trip has always been at an advantage. I ended up booking a phantom return date from my return airport of choice to obtain the outbound portion. Then I went back and modified the return date when the low level showed in the system for 2 weeks later. Because I wasn’t Platinum or Diamond at the time, it cost me $150 per ticket to do this. This was for a business elite flat bed flight on both segments going to FCO through CDG and returning from MAD at the 100,000 per person point level in June/July of 2014, so spending the extra $ to change the tickets made sense to me. It also kept me from having to pay the new 125,000 points level that came into effect in the middle of my booking.

    Most of our points come from actual flying for my husband’s business travel. A lot of this is booked about 10 days out, but some is last minute and always in coach. It could mean less points for miles flown, but he is now Platinum and it shouldn’t be too different, especially since we now put those purchases on the Delta credit card, getting us 2 extra points per $ flown. This also allows you to use Pay with Points. This option is great for vacation tickets booked way out that are cheap. Instead of using 25,000 points ( and they are almost non existent) for a coach ticket, you can use 20,000 for $200.00 off the price. A great example are flights from ATL to Cancun. Most coach tickets are way above 50,000 points. I can usually find tickets for just under $400.00 for planned vacations. This means I only need to use 40,000 points per ticket.

    I think it is a good decision on Delta ‘ s part to do this. It actually rewards those who fly them instead of just using credit card bonus offers for award tickets, although they will still benefit from the one way awards!

  2. the ONLY olive brand extended was the one way award

    essentially it’s a double whammy :

    1. for those building balances, you’ll be building at a much slower pace (DL earns like 16cents of RASM, but the break even point for this new miles is 20cents so the average flyer will come out worse)

    2. for those already have balances, the 5-tier and new award chart will guarantee to worsen things. i have zero faith that “availability would improve” on the lowest tier … they’re probably using weasel language and combine the bottom 2 tiers as “saver and saver plus”, then proclaim the sum of those 2 is larger than old saver alone

  3. All raise your hands if you would rather trust Bernie Madoff with your life savings than Delta to deliver on more low award seat availability!

    If Delta holds to their promises of more low award seat availability and an improved calendar – which they have promised before but failed to deliver – this will be a benefit to those who have saved up their miles.

  4. The value of something is defined by what you can get for it, not how easily you can accumulate it. Given that Delta hasn’t announced the redemption rates yet we have no idea if the points have more value or not.

    It is far too early to answer the question posed in this post title.

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