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.
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 ).
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.