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Delta SkyPesos To Become Even More Irrelevant, But What Does It Mean For Better Programs?

Update 2, 03/06: In the face of harsh criticism Delta has released the 5 level 2015 award chart. It’s applicable for flights booked starting 01/01/15.

It’s pretty much as expected with a new tier added in between each of current 3 levels.
Theoretically tickets to Israel get cheaper with level 1 going down from 85K to 80K. However when there is level 1 availability you can also just use 50K Air France Flying Blue miles to book that same Delta flight with no fuel surcharges, so no bargain there.

In my opinion it’s all pretty meaningless until we see the distribution of seats. Considering how scarce saver awards are now with Delta in a 3 level program I can’t imagine that there will be much available at level 1 pricing come 2015.

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Update: Delta.com now has the full details of the upcoming changes (though they say that the new award charts won’t be published until the end of this year 🙄 ).

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Originally posted on 02/26:

The WSJ is reporting that effective 01/01/15 Delta will completely revamp their SkyMiles program.

Delta has already been known for having a complicated 3-tier redemption system with little availability at the bottom tier.  Coupled with frequent devaluations made without prior announcement, the term “SkyPesos” came to stick.

Now they’re planning on changing the whole game.

Effective 01/01/15 you will earn miles based on how much you paid for your airfare. You will no longer earn miles based on the distance flown.  A non-elite will earn 5 miles per dollar spent, Silvers will get 7, Gold 8, Platinums 9, and Diamonds 11.

Currently a non-elite flying round-trip between JFK and Los Angeles on a $300 base fare ticket earns 4,950 miles.  Come 2015 and that flight will earn a paltry 1,500 miles.  A gold elite currently earns 9,900 miles but come 2015 and they will earn just 2,400 miles.

On the redemption side there will now be an even more complicated 5 tiers of awards for them to try to more closely align the mileage cost with the cost of the flight.  The only giveback is that Delta will finally allow one-way awards for half the miles of a round-trip.

So you’ll earn fewer miles from flights and redemptions will cost more.

Considering how poor of a value Delta miles offered until now this isn’t really such a loss, it’s just a bad program becoming really bad.

The real and far more pressing question will be if American and United will match.

Sure they can theoretically line their pockets even more by copying this, but at what cost?  If only 1 of them match then frequent flyer junkies will flock to the other.  If they both match do they really expect people to keep accumulating miles via credit card spend when they’ll be able to do better with a 2.2% cash back card?

I think what might happen is that we see American and/or United match just the earning aspect, tying the flight mileage earned to money spent.

But I think they may be smart enough to realize that by tinkering with the redemption side to add several tiers will kill the goose that lays the golden eggs.  They make billions of dollars annually selling miles to partners and if the lure of redeeming miles goes away so may those revenues.   American and United never did match Delta’s ugly 3-tier system, so perhaps a 5 tier system won’t in the cards for them either?

Will other international programs match this? Will you still be able to accumulate Delta flight miles by crediting flights to those programs? Will you still be able to credit Delta to Alaska miles?

This raises lots of questions. I guess for now we’ll just have to wait and see.

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44 Responses to “Delta SkyPesos To Become Even More Irrelevant, But What Does It Mean For Better Programs?”

  1. Joe Says:
    1

    Ad mosai ?? We need moshiach !!

    ReplyReply
  2. yupy Says:
    2

    IS credit card companies buying miles their big revenue, or is it their frequent flyers who accumulate miles by actually flying?

    ReplyReply
  3. Dan Says:
    3

    @Joe:
    😀

    @yupy:
    The big revenue is selling miles to the credit card companies and other partners.
    Which is why I’m hopeful that American and United won’t mess around with the redemption structure even if they mess with the flight earning structure.

    The last thing they want to do is drive everyone away from using their co-branded credit cards. That’s where they make the big bucks.

    ReplyReply
  4. Yeah.... Says:
    4

    Matching the award earning system is bad news.. But we would still be able to earn miles with CC. But matching the 5 tier award redemption chart AND matching the brutal DL availability, this would be terrible. But why do you think they will match that, as you write, they didn’t match that until now.

    ReplyReply
  5. Df Says:
    5

    Basically stop signing for credit cards

    ReplyReply
  6. Chevron Says:
    6

    umai lav ? tanya hasam…

    The value of the earning for consumer evaporates when the miles earned are worth gornisht.

    I think this bodes well for jetblue, great airline, great fares.. service etc all good other than useless miles

    ReplyReply
  7. Dan Says:
    7

    @Df:
    Signing up for cards is free money.
    The question is where to spend money after meeting spend thresholds.

    @Chevron:
    They’re betting that people will still fly them for fewer miles but you’re probably right.

    ReplyReply
  8. SrulyP Says:
    8

    QUESTION: If it is terrible for all the other airlines to copy DL then why did DL do it in the first place?

    ANSWER: They had to try to out do themselves on making the worst mileage expirience possible.

    Result: SUCCESS!

    OUTCOME: we need something better then #skypesos to fully explain DL complete lack of understanding on how to run a FF program.

    ReplyReply
  9. Dr Moose Says:
    9

    Just keep on crediting those DL flights to alaska airlines, you’ll probably be able to book one ways using those AS miles on DL.

    ReplyReply
  10. Mindy Says:
    10

    They offered me another cc when I called yesterday to change a reservation. Told them thanks I’m actually paying for these tickets cause your miles are worth nothing. She laughed…

    ReplyReply
  11. Marcool Says:
    11

    JetBlue does that too with revenue based points. (Can’t really call them miles anymore)

    ReplyReply
  12. Mark Says:
    12

    does that inc. the value of the delta amex card? and make it perhaps worthwhile

    ReplyReply
  13. CHAIM Says:
    13

    dan.by next glitch on delta we will earn 40 points only

    ReplyReply
  14. traveler Says:
    14

    I just spent 85K on 2 DL flights from NYC-MIA for this past weekend. No one else had availability on the return trip and I couldn’t split up the ticket. Good riddance to those SkyPesos.

    ReplyReply
  15. Chuck Says:
    15

    Dan,

    What do you suggest for people who have the amex delta card? The standard one. You think i should redeem those miles now,maybe sell them and get rid of the card? the only reason why i got this was because i like taking reward trips.

    ReplyReply
  16. Mark Says:
    16

    so… what does this mean for the AMEX delta card? does that give it more pull in new tier structure

    ReplyReply
  17. Dan Says:
    17

    @Mark:
    Why should it?
    I don’t expect to see improvements on the earning or burning side of the game from Delta SkyPesos.

    @Chuck:
    Terrible card for earning miles on.

    ReplyReply
  18. Chuck Says:
    18

    Dan,
    What card do you suggest? 22 Year old in school and at work?

    ReplyReply
  19. Dan Says:
    19

    @Chuck:
    Sapphire Preferred?
    Starwood?
    Freedom?

    http://www.dansdeals.com/credit-cards

    ReplyReply
  20. Charlie Says:
    20

    I just flew on delta, where do you suggest crediting the miles?

    ReplyReply
  21. Dan Says:
    21

    @Charlie:
    http://www.dansdeals.com/archives/39504

    ReplyReply
  22. Abe Says:
    22

    if they other airlines follow DL, the end result will be people switching to the Barclays arrival
    . no need to find availability for award seats, etc.

    ReplyReply
  23. Dan Says:
    23

    @Abe:
    True.

    ReplyReply
  24. Chaim Says:
    24

    Somewhat off topic, but I just had 60,000 AA Miles expire on me. Does an airline have a right to expire miles? Aren’t they considered to have cash value? What right do they have to take away my money just because I don’t use it?

    ReplyReply
  25. Peso selloff Says:
    25

    I’ve started selling my Skypesos as of late. I once had over 200,000 of them and I’m down to my last 37,000 of them. I figure 1.25 cents per mile will generally get me more than I’d get by redeeming them more flights

    ReplyReply
  26. lucy Says:
    26

    @Peso selloff, who did you sell to? I need to get rid of mine too.

    ReplyReply
  27. Tova Says:
    27

    I read somewhere that spending $25,000 on the Delta American Express card will also get you elite status. Do you know anything about that? Is it a good use of a credit card?

    ReplyReply
  28. Ben Says:
    28

    More details about the new 2015 Skymiles program

    http://www.delta.com/content/www/en_US/skymiles/2015-skymiles-program.html?MkCpgn=EM_MKTG_TRAN_A01D_SM_PR_140204_AA004196_P0

    ReplyReply
  29. Jerseyboy Says:
    29

    After deltas devaluation, which airline in the skyteam program should I credit my recent alitalia miles to??

    ReplyReply
  30. Dan Says:
    30

    @Chaim:
    Of course they do.
    Find an old car rental from before they expired and credit the miles to american.

    @Tova:
    Not true.

    @Jerseyboy:
    http://www.dansdeals.com/archives/39504

    ReplyReply
  31. David Says:
    31

    Hi Dan
    I somewhat agree with you for people who don’t spend much but for example, when I book an NYC to Boston for business purposes and it costs $500, I am going to get 5,000 miles (2 miles on the credit card plus 8 miles per dollar given I am Gold). Today I am getting 750 miles f
    (500+250). Eventually, only the high spender will be winner in this. Clearly, they do not like us to find loopholes in their program!

    ReplyReply
  32. Al Says:
    32

    Isn’t Flying Blue availability on Delta metal just a subset of what’s available using SkyMiles because not all Air France award space is available when using Delta miles.

    ReplyReply
  33. Dan Says:
    33

    @David:
    Use Avios 😉

    @Al:
    AF can book the lowest Delta award level, same inventory.

    ReplyReply
  34. Al Says:
    34

    Dan, the converse is not true – Delta does not let you use SkyMiles for all Air France low level award availability. They restrict availability on AF.

    ReplyReply
  35. Dan Says:
    35

    @Al:
    It’s hard to say as Delta’s current system is so badly messed up…
    Do you have a specific current example of this that I can look at?

    ReplyReply
  36. Al Says:
    36

    I’ve read that on Lucky’s and Gary’s blogs. “…unless Delta chooses to block award space that their partners are offering (it’s certainly the case now that I can book awards on Air France using Alaska miles that Delta will not let me have using Skymiles, so there may be some of this now).”

    ReplyReply
  37. AFRANCE Says:
    37

    A Where do i earn flying blue for AF? Can I transfer from Delta? UR?

    B I can NEVER find delta tlv for 80,000
    lowest I find is 135,000.
    How can I find the 80,000 miles award seats?

    are they saved for upper tiers? or never existed to begin with? when are they allocated? how long before flight?

    ReplyReply
  38. Car rental Says:
    38

    How many points does it take to have one week of Economy car rental in TLV? Which FF program has such option? which car rental company do they work with?

    ReplyReply
  39. David Says:
    39

    @Dan
    Look at any flight for next 6 month JFK to CDG and Delta won’t have any available seats on AF metal for Business class.
    The same goes for departures from Montreal.
    I’ve checked so many times and it’s never available.

    ReplyReply
  40. Asher Says:
    40

    Dan, Im convinced. Good Bye Delta. But where to? I do most of my travel from JFK to LAX, LAX/MIA and JFK/MIA. I currently am just shy of gold with them. Who would you recommend moving to? and what should I do with my 400,000 miles that i have with them?

    ReplyReply
  41. Bandit Says:
    41

    @Dan:
    Dan – got 2 Southwest and 1 Ink card in the past year. Got the miles and companion pass. Question is if I wish to apply for new cards so as to build up a larger bank of miles, what is the best thing to do with the cards I just got? Cancel them before they charge the annual fee? Thanks

    ReplyReply
  42. sara Says:
    42

    Dan, I just flew with my family to Israel from Canada on delta. I had a frequent flyer miles, kids not. is it worthwhile to get those miles? and on which program?

    ReplyReply
  43. Jeremy Says:
    43

    @Asher:

    This seems like an easy one. I’d go with American, those are all AA hubs. If you really like flying Delta, you could continue and credit miles to Alaska (and use it on DL or AA).

    ReplyReply
  44. ron dimbert Says:
    44

    If I cancel my Delta AMX card, do I forfeit my accumulated (30K) miles?

    ReplyReply

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