Over the last few weeks, we have seen some great deals for business class tickets. Some of them were ridiculously cheap – like $1,400 from the West Coast to Europe (roundtrip)! Not only that, they were valid for summer travel (which is normally a very expensive time to fly to Europe). These have come and gone and they have not been mistake fares.
This lead me to wonder something – might we see more of these after the revenue-based earnings kick in for United and Delta in 2015? Let’s take a look at a few things.
Revenue Recap
To recap what is happening in 2015, Delta and United will be moving to a revenue-based model for the earning of award miles. How elite qualifying miles are earned will stay the same, but the way award miles are earned will be drastically different.
Instead of awarding miles based on the miles actually flown, miles will be awarded based on the cost of the ticket. That means that if you can fly from the Northeast to Singapore for $800 now, you would earn around 20,000 miles plus an elite bonus depending on your status. Next year, the amount of miles earned will range from 4,000 miles to 8,800 miles (actually less because that $800 would include the taxes and fees). Very bad turn on miles for sure!
Delta’s revenue-based system will kick in January 1, 2015. United will not kick in until March 1, 2015.
Cheap Business Class Tickets In The New System
Where as business class tickets now earn the amount of miles flown plus a class of service bonus, the amount of miles earned on the new system will have nothing to do with the distance flown. That means that these $1,400 business class tickets will be earning a fraction of what they would earn if they were being flown this year.
Difference in earnings on one of my tickets this year
For the airlines, that is great news. It means they will not need to award miles in the abundance they currently do on business class tickets. Instead of awarding over 18,000 miles on that type of fare (before factoring in elite bonuses – could be as high as 36,000 or 40,5000 miles), they will now only be awarding between 6,000 – 13,200 miles.
Some Cash Better Than No Cash
Available Business Class seats on a flight to Europe that has award seats for 225,000 miles
Since Delta will be awarding less miles to all of their flyers who travel on cheap tickets, the largest block of Skymiles is going to come from passengers flying on expensive tickets or consumers using credit cards. The traveler on cheap tickets will no longer have miles being awarded in the abundance they currently are awarding.
Delta has already made it difficult to book award tickets in business class. They seem to be content letting flights go out with empty seats in their Business Class cabin and that will undoubtedly not change under the new system. The award numbers are (and have) going up for business class and the miles being awarded on cheap tickets will be less.
It stands to make sense that these airlines will prefer to sell their business class seats in blocks of low fares like this instead of letting them go empty. I don’t think that they will release fare sales like this all the time, but I do think they may open up the door on certain destinations that may not always be a draw to business class customers. For example, many of the cheapest fares posted for business class travel next summer were to Barcelona.
Is It A Good Tradeoff?
If these deals do end up coming up from time to time after both Delta and United have moved to their new programs, will you be happy with such a tradeoff? Obviously, it stinks to not get as many miles by flying as we used to, but it would be a great option to be able to purchase business class tickets for the same price (or less) than we used to for economy seats.
How about economy tickets? It has almost been a year since Delta had their little one-day “deal” where tickets were available all over the US for around $50 or less (first class tickets as well!). That would be a nice thing to see come up every so often! It would work out well for Delta as well so they dump empty seats and still make money while not giving out as many miles as they used to.
So, what do you think? Could this be a possibility going forward? What would you think about it?
