HT: Inside Flyer
Here is another devaluation – and this is one of the worst kind for flyers. People have been predicting this coming for quite a while now, but I was hopeful that it would hold off at least for a couple of years since Delta just added revenue requirements to their current medallion program. However, that day is here and it is really bad for flyers that try to earn miles by, you know, actually flying (although on cheap tickets).
Delta Drops The Hammer
This news was just announced officially this morning and it is not good. Delta is now tying mileage earning to the price paid for the ticket (minus taxes and fees), joining the revenue based program currently used by Southwest, JetBlue, and Virgin America. This is a huge disappointment for the many mileage runners who call Delta their airline. Here is what the new program looks like.
Starting January 1, 2015, all miles earned by flying Delta will be tied to the price paid for the ticket. To take it further, this will be a tiered earning by Delta Medallion level. So, the general flyer will earn the least while the Diamond Medallion flyer who uses a Delta American Express card for purchasing the ticket will earn the most miles. However, the most award miles that can be earned under the new program will require purchasing very expensive tickets.
This is very painful for Gold – Diamond Medallions due to eliminating the 100% (125% for Diamond) award miles that will be earned on a ticket. Here is an example of a cheap ticket I flew on a couple of years ago, according to Delta’s new calculator:
That is a huge change! So, instead of being able to earn enough award miles on a flight like that for a round-trip award ticket in the US, it will now not even give half the required miles towards a one-way domestic ticket (more on that below). To see for yourself what your award mile earning will look like after January 1, click here.
Delta is covering their terrible devaluation of mileage earning with reports of making the redemption process easier. They are saying that they will be releasing a new and improved award calendar with the new program (about time – it has only been broken for years). They are also finally going to allow booking one-way award tickets at half-price of a round-trip ticket (also about time – by the time this is put into effect, they will be the only US airline not allowing one-way award tickets).
With this announcement, they are also saying that they will be releasing a revamped award calendar later this year that introduces 5 award tiers. This is in contrast to their current 3 award tiers (Low, Medium, and High). My guess is that they will continue to stick with those three tiers (which they say will release more Low availability) and add the two additional tiers for partner redemptions. We will have to wait a few months to see how this plays out.
Another move Delta is making is a release of Miles + Cash for ticket purchases. This way, if you do not have enough award miles, you will be able to make a booking using a pre-established mixture of the two.
Earning Medallion Miles
The award miles mentioned above are specifically for redemption towards travel. Along with that earning is the earning of Medallion Qualifying Miles that accrue towards the different elite levels. According to Delta, the way you earn elite miles will stay the same as will your mileage earning. So, if you fly on a 100% earning elite mile fare, you will earn all the miles for your trip (for example, I earned over 13,000 elite miles on the above Japan trip – that would still be the same). The reason they will not be touching this is that they already added the Medallion Qualifying Dollars to the equation, requiring you to spend a certain amount on Delta tickets for qualifying for your elite level. In addition, you can still get a waiver from that spending if you put $25,000 on a Delta-branded American Express card in one calendar year.
How Does This Affect You?
If you earn your Delta Skymiles for award redemption through credit card spending, then you are not affected by this at all! That is the good news. The bad news comes for any Delta flyer who flies on on anything less than high price tickets. The only way it even makes sense anymore for a flyer like that to do a mileage run is if this person is doing it to earn elite miles (which will be unchanged).
It is kind of strange how Delta is approaching this. They are wanting to do this to reward their high-value members (and, even though they do not say it, punish those who fly cheaply), but they are punishing a large amount of their travelers while giving members who never buy tickets and only using credit cards a pass. That just tells you how profitable the Delta/American Express relationship is for Delta!
My one hope with this is that there may be more fare sales now that Delta does not have to give out award miles on the scale they do now. If they started to run competitive fare sales like Southwest and JetBlue do (who are also revenue based), it would help people travel who do not care about the mileage earning factor. My big fear is that the other airlines will follow suit soon or make it even worse.
For the traveling runner, this really has no affect on you if you do not travel on Delta but for award tickets. You can continue to earn Delta miles through credit card spending and reward bonuses without finding that spending affected by these changes. The one caution would be to not transfer Membership Reward points to Delta until we see how the new award calendar/pricing structure is going to work.
What about you? Does this affect your travel plans much?