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There are a bunch of things we are looking forward to this fall travel season including Delta at long last catching up to the competition and allowing us to pre-select our 1st class meals. Next on deck, the implementation of the outstanding change with your +1 enjoying your status upgrade priority on most paid tickets. Then, just weeks away now, or specifically September 21st, the grand public opening of the brand new Delta Sky Club in Atlanta in the B concourse. All really good and exciting stuff.
What is probably much less good news is what you see hiding behind the safety card in the photo above that is the soon to be discarded, the August SKY Magazine that you can read online if you would like to see what I am talking about (as well as the new one for September).
What I am in fear of is a tiny intro piece entitled “Rewarding Loyalty” from the Delta CEO and the head of the SkyMiles program. Let’s look at the most disturbing parts. Sandeep Dube said:
“…we continue to add new ways for customers to use miles”.
Yes. We know all about those. Like the new ways to flush the value of SkyMiles down the drain buying drinks in the Sky Clubs. But to be fair they have offered nice priced awards like 5k one way flights.
They are even just about wide open if you want to fly down from Chicago to Atlanta to check out the new Sky Club B at the end of next month. But while 5k awards are appreciated look at the one way purchase price in cash.
So while 5k sounds amazing for an award, when you can buy the same one way ticket for ~$83 you are only getting about 1.66 cents value. Decent value, but not amazing. If Delta were charging 12,500 miles for this then THAT would be shameful. Hopefully you see my point.
Let’s get back to the article. In the conversation they go on to point out the “we” think SkyMiles is “too complex”. Maybe it is. Maybe that is because Delta hides the award charts so the complexity comes in when we are trying to find out if we are getting value from some trip by simply comparing it to the award charts that Delta does in fact use but hides from us. Want to make it simple Delta, just republish your award charts. This is not that hard. But look what Sandeep Dube says later on:
“…our focus will be on simplifying SkyMiles and making it easier to interact with it through enhanced functionality.”
Ruh Roh, folks. This is not good! As we all know anytime an airline uses the word “enhance” in any fashion it should make us quake in fear because this is airline code for a devaluation. And when Delta talks about simplifying it normally means the value of our SkyMiles is about to go down. Lastly when they say “making it easier to interact” that to me means it will be simpler to drain our points in one single booking. You should fear this – I do!
It may just be a matter of time before Delta truly goes all fixed value redemption for SkyMiles. A Flyer Talker this past week found what could be a bug or could be some bit of code that should not have been loaded in on Delta.com (we are talking Delta IT here after all). Personally I think fixed value redemption is on the way and when that happens SkyMiles simply becomes a glorified rebate program. That will be really simple math.
After all, SkyMiles today is no longer a FFP it is a FBP. Translation – it is no longer a Frequent Flyer Program it is a Frequent Buyer Program since you are rewarded for ticket price not how frequently you fly. Once the redemption becomes fixed the destruction transformation of the program will be complete.
That will truly be a sad day. What will be the reason to actually collect SkyMiles if they are worth say a fixed value of 1 cent or 1.5 cents each when cash back from Capital One BANK business card can earn you 2% all the time and no strings attached. That is VERY simple to me.
Personally I like the idea of getting real value of redeeming 125k SkyMiles to fly business class round trip to visit my family in Sweden next summer. I would not, however, like the idea of spending 2-3x that much at a fixed point value redemption.
But is this final change really going to happen anytime soon? We clearly do not know and Delta is not about to tell us. They are kinda funny that way and prefer to just let us find out when the changes are in place. My hope is they have looked at the numbers as we just have and can see the writing on the wall that such a final fixed price move will cost them and their partners. While the current system is “complex” it still retains real value.
Simple, with no value, is not simple at all. Agree? – René
(HT to @laptoptraval on twitter)
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A week or so ago, the main club at JFK had a fabulous 2cpm redemption opportunity — a $4 smoothie for just 200 skymiles 🙂
@skdelta – sigh 🙁
I know this has been rehashed ad nauseum, but a fixed point redemption would be a trainwreck. Rene, as you know better than anyone, the main point of broad participation in these silly programs is arguably the ability to use “points/miles” sit up front over an ocean.
Putting this aspirational redemption essentially out of reach would be deal killer, no?
I realize the other legacies could quickly follow thereby allowing the carriers to say “tough, here it is”, but that seems a bit myopic.
Additionally, might their credit card partners go ballistic when the value of their cards suddenly craters?
If my thoughts are simplistic I apologize. If this comes to pass then many simply switch to a 2 or 3X spending card, I assume. Yuck.
@Geoff – The CC problem may be new regulation (possible that is). You could see the value of offering points may be going down and my sinking feeling is one day FF program could come under much more oversight. Both will make them less valuable and my guess is more will look the same and offer similar point value. It will be interesting to see what happens next few years!
You’re saying banking regulation will render these programs worthless?
Is it the IRS?
Is there a link that discusses this? Seems to me that the “regulators” might have bigger fish to fry than credit card participation in voluntary frequent flyer programs.
Although given government overreach everywhere else I guess I shouldn’t be surprised.
The average Joe’s “free” ticket for ONLY “500,000 miles” for 1 business class ticket from the USA to Europe has only taken them 27 years to accrue all those miles and has (probably) cost them in the high 5 figures. That’s not a “free” ticket!
@JH – I agree that would be totally crazy. Then again, the average Joe should be calling ADAM for help!
Geoff, I agree with you that “the main point of broad participation in these silly programs is arguably the ability to use “points/miles” sit up front over an ocean. Putting this aspirational redemption essentially out of reach would be deal killer, no?” I live in Atlanta and pay a premium to fly Delta to accumulate those Skymiles to use in award travel in Delta One over the water. If they eliminate that aspirational goal, I become a free agent just go for the lowest priced ticket.
@Don. Agree completely. Delta charges an insane premium in most cases from my little ole airport. Often I pay it for myriad reasons even if not most convenient. That’s a topic for another thread.
Fix Delta One redemptions at $.01/mile???…see ya…………
This will bite DAL on the backside someday (not me, but many others).