Another Reminder of Why Delta Air Lines Does Not Have to Give Notice of SkyMiles Redemption Increases

“W e should keep in mind this is following on the heels of the recent price jump from 50,000 to 62,500 to 70,000 and now to 85,000 for a one-way trip to Europe in business class just over the past few years”, according to this article pertaining to the latest increase in SkyMiles redemptions for partner airline awards as written by René de Lambert of Renés Points. “The really frustrating part is what Delta SkyMiles team is best at — no advanced notice. They tell no one! Now as some point out they can do this at will because it is in the T&C but that does not make it any less reprehensible or shameful. The other major problem with this disgusting change is finding Level 1 Delta awards is VERY hard. Finding partner awards has been reasonably easy.”

That is because during those years in the past, Delta Air Lines was not doing as well financially, to understate the obvious; so the airline did what it could to attract more business — but given that the redemption of SkyMiles for a round-trip itinerary between the United States and Australia increased by 30,000 SkyMiles last year and that SkyMiles award redemption rates have increased multiple times in recent years, is anyone really surprised about the latest stealth devaluation?

Unfortunately, the time has come for…

Another Reminder of Why Delta Air Lines Does Not Have to Give Notice of SkyMiles Redemption Increases

Let us say that you operated a business — and you probably already do. Your company is experiencing consecutive financial quarters of record revenues and profits. Would you voluntarily offer ways to discount your product or service — whether it is in the form of a straight decrease in price or via a loyalty program — when business is doing so well, with the possibility of the savings you are giving your customers cutting into your profits?

In most cases, of course you would not do that. Discounts — or, in this case, offering miles for discounted or almost free flights — are meant as an incentive to increase business, which is especially necessary when the financial aspects of your business are not at their best and could be doing better.

If Delta Air Lines wanted to raise the redemption rate of SkyMiles to 95,000 each way — or, for that matter, raise the cost in terms of money — for a seat in the premium class cabin without negatively impacting its bottom line, then it will. That is the simple economic principle of business known as supply and demand. What are you going to do about it — say to yourself, “well, I will just switch airlines and save up enough miles to redeem for a similar ticket on that airline”? Are you going to redeem your SkyMiles for something else? Should they just sit there and collect dust — only to further be devalued at some point in the future without notice?

If you have not already noticed in recent years, United Airlines and American Airlines have basically followed Delta Air Lines in terms of a number of “enhancements” to their respective airlines and frequent flier loyalty programs — which is a reason why I found the extensive coverage of Scott Kirby switching jobs as president of American Airlines to immediately becoming president of United Airlines almost to the level of ludicrous. As talented and experienced as Scott Kirby may be — I have never met him and do not intend to take anything away from him — it does not take much to copy the “innovations” of a competitor. Other than Scott Kirby himself — who apparently will be handsomely rewarded by both airlines as the result of his change of positions — and to those who will benefit from this move, does this news really matter to anyone?

Why Award Redemption Increases Should Not Be Done Without Advance Notice

When you shop at a grocery store, you typically use a form of currency issued by the government called money — whether you use a credit card, check or cash. If the grocery store raised the price too high for your taste, you can shop around at competitors in an attempt to find a better deal and use the same currency there if you are successful.

That scenario is not true with the use of frequent flier loyalty program miles or points, as you are at the mercy of the whims of the airline. In the case of Delta Air Lines, they can raise the redemption rate of SkyMiles on any award ticket they want — any time they want — and you have no recourse. You cannot take your SkyMiles and shop around to redeem them for a flight operated by any other airline directly, hoping to get a better deal by bypassing Delta Air Lines. You are obligated to follow the rules set forth by Delta Air Lines if you want to redeem your SkyMiles for any award. That is the main reason why I eschew affiliate credit cards which earn frequent travel loyalty program miles and points: because as generous as some of those offers might be, the company which issues the “currency” — I use that term loosely — can change the rules at any time as to how you can use it.

Never Play With the Trust of Someone Else

More importantly, my trust in doing business with many of the frequent travel loyalty programs has been eroding significantly over the years — especially with several scenarios which I have experienced. Two of them involved frequent travel loyalty program miles and points not being credited properly or at all to my respective accounts; and I have had to go through a lot of time and effort. Both the experiences with American Airlines and with Avis — which consumed approximately 17 months since I first earned the number of Hyatt Gold Passport frequent guest loyalty program points which should have been properly credited to my account — have finally been resolved to my satisfaction.

Delta Air Lines recently suffered yet another significant embarrassment with the chaos to its operations caused by significant inclement weather — and those operations have still not completely returned to normal. Systemwide outages — such as this massive one from last August — have not helped to bolster confidence and trust amongst customers. Despite the number of proactive moves to allay concerns amongst its customers, trust has basically eroded — at least, amongst some customers…

…and while trust of the operations of an airline is certainly substantially more important than that of a frequent flier loyalty program, toying with the trust of the members of your frequent flier loyalty program is still a dangerous game, as that lack of trust by customers could seep into other areas of the business — and once any modicum of trust is lost, it is incredibly difficult to regain.

Honesty and Integrity

As I stated in this article, I have written many articles over the years based on trustleadership, and maintaining perspective and adjusting expectations and regarding honesty and integrity — or lack thereof — pertaining to frequent travel loyalty programs.

For example, award redemption increases should not be implemented without notice.

I offer this example of what an honest marketing message might actually sound like after the recent announcement of a merger between two lodging companies.

Stephen M. R. Covey of FranklinCovey agreed with me about how the airlines should value the trust their customers have in them — especially for the day that they might really depend on it when the economy falters.

I can go on and on; but at least there is one bright spot: one former executive in the commercial aviation in particular industry exhibits a candor and honesty which earned the trust of customers — including frequent fliers.

What You Can Do

There is not much that you can actually do; but hopefully the following information will help:

  • There is a loophole of which you can take advantage where “by adding on a Delta segment to any of these itineraries, the price drops to the ‘old’ level”, according to this article written by Matthew Klint of Live and Let’s Fly — but do not expect this loophole to last.
  • This article written by Adam of Point Me to the Plane — who also uses the word shame to describe the actions of the SkyMiles department of Delta Air Lines — gives comparisons between “older” redemption levels of SkyMiles and the sudden current increased ones to give you the opportunity to enact a more educated decision pertaining to best using your miles.
  • Follow this discussion on FlyerTalk to exchange strategies, information and updates pertaining to this latest perceived devaluation.
  • Wait until Delta Air Lines has one of its monthly SkyMiles award sales. Just last month, I redeemed only 50,000 SkyMiles during the March SkyMiles award sale for a round trip between the United States and Europe later this year. That redemption turned out to be a better value than I initially thought; and the possibility of a similar monthly SkyMiles award sale occurring some time in the future is not out of the question. I intend to continue to keep you apprised of the monthly SkyMiles award sales — as well as any others which may be beneficial and advantageous to you.

Summary

Delta Air Lines has every right to charge whatever it wants for its products and services — whether in terms of SkyMiles or cash or both — but to hide an important reference such as award charts to then be able to implement dynamic pricing and increased base levels of award travel more easily is an example of playing around with the trust of its customers…

Click on the economy class SkyMiles award chart for an enlarged view. Source: Delta Air Lines.

Click on the economy class SkyMiles award chart for an enlarged view. Source: Delta Air Lines.

Click on the premium class SkyMiles award chart for an enlarged view. Source: Delta Air Lines.

Click on the premium class SkyMiles award chart for an enlarged view. Source: Delta Air Lines.

…and as long as financials continue to be good — combined with fewer competitors in commercial aviation in the United States — do not expect this playing around with the redemption of SkyMiles and the omission of award charts to stop anytime soon.

Obfuscation of important details and information instead of transparency and having that information readily available rarely ever improves relationships between companies and its customers.

When things get bad — and they usually do, as the economy always consists of cycles — only then will we see if there will be any positive changes from the point of view of customers with regards to the SkyMiles frequent flier loyalty program; but the return of any trust by some customers will continue to be much more difficult to restore…

Photograph ©2011 by Brian Cohen.

5 thoughts on “Another Reminder of Why Delta Air Lines Does Not Have to Give Notice of SkyMiles Redemption Increases”

  1. rick b says:

    First of all, the analogy with other businesses isn’t appropriate. My local coffee shop doesn’t trick me into shopping exclusively with them using punch-cards, only to later tell me sorry, you now need 20 holes instead of 10 to get a free drink. That crap doesn’t fly in the normal world. Loyalty programs create a (often) false sense that you’re getting something for your loyalty. Delta has the right to do it, but they’re still unethical scumbags.

    And two, the only one who suffers is AMEX, whose Delta cards will be even more likely to get cut up and who’ll have to give out even more generous bonuses.

  2. IR15H says:

    I realized a while ago that the only airline I enjoy flying is Southwest. In fact, I actually trust Southwest. This is because they are the only airline I’ve flown that actually treats their economy customers (i.e. all pax) well.

    I often have bad experiences with DL/AA/UA, and they lost my trust a while ago. I only fly economy, so why would the legacy airlines go above-and-beyond me? I only cover their expenses. I’m not a profit generator.

    Southwest’s business model allows them to be profitable at a lower price point. Because of this, average economy passengers are profit generators for them, and we are treated accordingly. Just look at all the perks below!

    The pros:
    – ALL tickets are 100% refundable regardless of status until ~10 minutes before takeoff (discount pax get a voucher)
    – 2 free checked bags (saves me $100 RT when going skiing)
    – a domestic network comparable in size to the legacy carriers (minimizes disruption from ir-ops)
    – Rapid Rewards can be redeemed for ANY flight (also see cons list)

    The cons:
    – no first class (I would never pay for it anyways)
    – status is useless (except for companion pass, which can be insanely valuable)
    – # of RRs required for awards flights varies according to price at time of ticketing (also see pros list)
    – international network is a joke (737 MAX to the rescue?)

    Going off on a tangent, forget Norwegian and WOW disrupting the long-haul market. Imagine Southwest with a fleet of TATL-capable 737 MAXs. Legacy carriers don’t stand a chance against the Southwest Effect; history is my witness. I’m salivating just thinking about it.

    To tie this in with the above article, compare how Delta and Southwest announced changes to their frequent flyer programs. On one hand is Delta that secretly devalues the program overnight. On the other hand is Southwest which originally made the companion pass harder to get overnight too. However they recognized that it was a bad decision to surprise customers like that, and they owned up to the mistake. They then extended the deadline by 3 months, and even included transfers that were initiated by the deadline, but not yet completed. I sincerely doubt that Delta will take a similar consumer-friendly approach to its recent devaluation.

    That being said, would I enjoy the experience of flying first class on a legacy airline? Absolutely. But would I be willing to pay for it? Absolutely not.

    Bring on the “cattle car” and “gate lice” comments. I’ll be laughing all the way to the bank.

  3. rjb says:

    I closed my Delta Amex card last week. Good riddance! Delta´s meltdown this week had many of my co-workers strugglig to get where they needed to be. They were rewarded with hours-long hold times , full flights and no help whatsoever. Trying to get to Cleveland? We can get you to Columbus and then you are on your own.

    Loyalty died several years ago. This week, I flew AA, Jet Blue and United. AA was surprisingly positive, Jet Blue was consistently good and United was a disaster. Next week, who knows? but I won´t be beholden to any one crrier. best price, best schedule wins. Lets see what hapens in the next recession.

  4. Monawar Cunliffe/steel says:

    I just used my Skymiles for a return ticket Florida to Bombay. I was given a return flight on Saudia airlines which I was not very thrilled about. I had two bags. On my way out I paid $75 for the second bag which I thought was reasonable. On my way back, I had two bags one of 19kgs n the second of 18 kgs. NOW TAKE A GUESS WHAT THEY , SAUDIA AIRLINES CHARGED ME FOR THE SECOND BAG, HOLY COW….I PAID $350 yes you read correctly $350. AND THEY REFUSED TO TAKE AMERICAN EXPRESS OR MY WELLS FARGO DEBIT CARD. As an American tourist they accepted payment IN rupees which is illegal . WHO THE HELL DO I GO AND COMPLAIN TO?? IS D E L T A HEARING !!!!!!!.
    Call Amex and they are not interested . I have held an Amex card for more than 30 years and my husband was a director of Amex AND YOU ARE RIGHT I AM CANCELLING MY CARD AS SOON AS I FINISH GETTING SOME JUSTICE DONE.

  5. Shimon nyman says:

    I had to stop at your sunk cost fallacy

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