Is This The Beginning Of The End? Delta Introducing Dynamic Award Pricing For Travel From 06/01/16

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The beauty of miles has long been the lack of correlation between mileage cost and cash cost. That has meant that a last minute coach ticket that would cost $2,000 cash can cost just 9,000 miles.  A $15,000 first class suite can cost just 57,000 miles. They’re practical and aspirational to collect and use. And that’s been a boon to airlines, banks, and consumers all at the same time.

Delta’s miles (aka Skypesos) have long been among the least valuable in the industry. Then Delta hid their award charts earlier this year.

And now this,

“We know your miles are important, so we want to provide the most notice possible regarding Award price changes. For travel on or after June 1, 2016, the number of miles needed will change based on destination, demand and other considerations. But most Award prices will remain unchanged. To see the best availability and deals, search at least 21 days prior to departure and use our Award Calendar by selecting “flexible days” when searching for a flight.
Miles needed to upgrade will increase, and to provide greater access to these upgrades, we’ve expanded the eligible types of fares.”


I’m not even sure what they mean that “But most Award prices will remain unchanged.” They don’t even have a published award chart today and their award award chart already consists of 5 different levels!

To Delta’s credit, they have introduced awards starting at just 7.5K miles when booked 21 days in advance.

But the ballgame is changing. Delta clearly wants to put an end to outsized mileage redemption values, especially those within 21 days. Dynamic pricing will allow them to charge less for flights that cost less and more for flights that cost more. It’s a simple concept, but it eats away at the very value proposition of miles and can lead consumers to turn in their mileage cards for cashback cards.

Will Delta continue to allow partner redemptions within 21 days to be had at saver levels? It’s hard to say at this point.

We can hope this is just a one-off. But United loves copying Delta devaluations. We saw that when United copied Delta’s dreadful revenue based mileage earning scheme.

It’s hard to see United not copying Delta’s lead here. The only question is how far they’ll go.

My hope is that United is smart enough not to kill the golden goose and that they continue to have published saver award charts and that they continue to allow redemptions within 21 days.

If United introduces dynamic award levels for standard awards that won’t be the end of the world. But it will be a very sad day if they copy Delta here and delete their award charts for good in favor of dynamic pricing.

HT: yuguy, via DDF and MJ

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14 Comments on "Is This The Beginning Of The End? Delta Introducing Dynamic Award Pricing For Travel From 06/01/16"

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Anonymous

Hey can’t beat 325k jfk-TLV direct!
There horrible !!
Although you can find some decent flights from jfk-lax -when you compare to AA anytime

ryan

Kind of like Aeroplan’s Market Fare Flight Rewards. Except that AP also has the regular charts.

This is lousy, and as much as I hate it, it does make sense.

Dan

@ryan:
Right.

Its not the end of the world when anytime awards go dynamic. The sad thing is to see saver awards go dynamic.
Time will tell if others copy Delta here.

Wiz23

You can’t read gain miles on purchasing a flight these days and bonus points from cc are becoming much harder to get so what will be in year or two?

G

Maybe there is some upside.

DL now releases ZERO awards on the JFK-TLV flight (except at the highest level 162,500 each way).

The entire year calendar shows only high awards. If they value points at $0.015 or $0.02 at least that is a start. 140,000 can equal $2800 which with decent planning can be most of the cost of your RT ticket.

lost

hi i know not in right place but can u do a 3bm with 1 business annnd 2 personal

chana k
high end hobo

@lost:
AFAIK AMEX you’ll only get one pull
Chase YMMV probably multiple pulls

DJ

I think it’s been the end of the world when corporations put up words that are blatantly lies in your face and call it enhancements/improvements and have the gut to defend those claims. It’s funny no one outside their camp sees it that way but they can still put up a face for it. that’s the eotw.

Levi

It doesn’t make sense for airlines to keep doing miles, in the long run. They don’t really benefit. Maybe the first year until the second company followed suit, the idea of miles engendered loyalty, but now everyone has multiple miles accounts and people only uses miles when it would benefit the airlines more to just charge cash.

My take. Its revealing when people like Dan are the ones who are worried (absolutely nothing against Dan but he obviously gets more out of his mileage account than the airlines do )

fran

i don’t understand any of this!!! what’s the bottom line, it will be harder to use miles on delta or they will be worthless?

ilherman

@G: In your dreams will they value pesos $0.02, so no point here.

TW

@Dan is right. It’s time to switch to cash-back cards if this dynamic award pricing becomes industry norm. Look at the lousy valuations that the FF programs give you on other redemption options. It is highly unlikely that they will use as high as a 2 ct per mile valuation, a 1 ct per mile valuation is more likely, meaning that the 25k domestic award that has remained the same for years will soon go the way of the dinosaurs. The reason this is happening is because there are now only 4 major airlines. No competition, no deals.

Yaakov

Has anyone ever tries a class action lawsuit against an airline for devaluing an award? I understand they can legally do it for future miles earned but how can they do that to previously earned?

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