Delta: "Demand for Skymiles as a currency is increasing."
Apr 10, 2019, 8:14 am
#1
Original Poster
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Delta: "Demand for Skymiles as a currency is increasing."
Details from earnings calls
- Redemptions up 12% in 1Q19
- Customers using Skymiles for purchases outside of flights
- Upgrade with points growing faster than expected
- 4,000 customers upgrading with points every day, half with mobile
- AMEX spend up double digits in 1Q19
Seems like customers are using these pay for upgrade options in high numbers
- Redemptions up 12% in 1Q19
- Customers using Skymiles for purchases outside of flights
- Upgrade with points growing faster than expected
- 4,000 customers upgrading with points every day, half with mobile
- AMEX spend up double digits in 1Q19
Seems like customers are using these pay for upgrade options in high numbers
Last edited by Adelphos; Apr 10, 2019 at 8:25 am Reason: Added detail
Apr 10, 2019, 9:26 am
#3
Join Date: Jan 2014
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Posts: 21
Lots of ways to read this - will be interested with how others view. Could be customers seeing/using an increased range of options and viewing currency more valuable, could be folks using currency faster fearing devaluation over time, could be this is within the normal range of variation seen (or within normal range driven by specific "offerings" given in the quarter - feels like these could be very company driven)....lots of ways to read...
Apr 10, 2019, 10:22 am
#4
Join Date: Mar 2015
Location: Home
Posts: 469
Anyways with data there are n number of ways to interpret and spin... give me enough data and I can prove that black is actually white and vice versa
Apr 10, 2019, 10:24 am
#5
Join Date: Dec 2018
Location: PHX
Programs: Delta DM, Marriott Lifetime Titanium, HHonrs Diamond
Posts: 1,336
Ed called AMEX their most important commercial partner.
Current revenue from the AMEX partnership around $3.5B annually and will double by 2023.
Nothing like high margin passive income to support operations that fluctuate with weather, fuel prices, and costs of salaries and benefits.
Seems like they are managing their SkyMiles AMEX cards very well and people are seeing the value in using them.
Current revenue from the AMEX partnership around $3.5B annually and will double by 2023.
Nothing like high margin passive income to support operations that fluctuate with weather, fuel prices, and costs of salaries and benefits.
Seems like they are managing their SkyMiles AMEX cards very well and people are seeing the value in using them.
Apr 10, 2019, 10:50 am
#6
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How do they know the redemption spike isn't actually currency dumping? That would be the opposite of increased demand.
Apr 10, 2019, 12:21 pm
#8
Join Date: Oct 2011
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Wording of OP title is unclear economically speaking
The only party involved that can actually affect SkyMiles "demand" is Amex and other transferrable credit card companies (if there are any). They are the major players that purchase and therefore "demand" skymiles. The only way to prove that Skymile demand has increased would be to demonstrate that Delta's sales of skymiles to Amex has increased. This is probably indirectly true when viewing OP's last bullet point with Amex spending up double digits (hence increasing overall sales of skymiles from delta to Amex).
Flyers using more skymiles has nothing to do with skymile demand.
The only party involved that can actually affect SkyMiles "demand" is Amex and other transferrable credit card companies (if there are any). They are the major players that purchase and therefore "demand" skymiles. The only way to prove that Skymile demand has increased would be to demonstrate that Delta's sales of skymiles to Amex has increased. This is probably indirectly true when viewing OP's last bullet point with Amex spending up double digits (hence increasing overall sales of skymiles from delta to Amex).
Flyers using more skymiles has nothing to do with skymile demand.
Apr 10, 2019, 12:30 pm
#9
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Apr 10, 2019, 12:33 pm
#10
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Apr 10, 2019, 12:36 pm
#11
Original Poster
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The title is basically quote. I think the whole topic is interesting, especially in the context of United eliminating their award chart and the perception that SkyMiles is a weak program, or that they aren't worth a lot. It seems like Delta's strategy is working in the short term as people continue to spend on their Amex cards and redeem points on things like upgrades
Apr 10, 2019, 12:43 pm
#12
Join Date: Apr 2011
Posts: 3,394
With new redemption options it's far more tempting to use some miles to upgrade their trip when they already have a flight they're about to take especially considering most people probably only fly once a year or even every other year.
Flyertalk people are on the extreme end of the bell curve for knowledge about flights and mileage, and are not at all a good barometer for the general public.
Apr 10, 2019, 12:48 pm
#13
formerly jackvogt
Join Date: Dec 2015
Location: Atlanta, GA
Programs: Delta SkyMiles,
Posts: 822
Wow, Delta is probably the most profitable with their AMEX partnership and they don't have people constantly trying to sell them to passengers while you are on the plane. American and United should take a page from Delta.
On a side note, I put all my spend on the AMEX because I value quantity over "quality". It may not be the best redemption value, but I don't have to pay anything. I know I'll never run out because I keep spending money and paying it off.
On a side note, I put all my spend on the AMEX because I value quantity over "quality". It may not be the best redemption value, but I don't have to pay anything. I know I'll never run out because I keep spending money and paying it off.
Apr 10, 2019, 12:50 pm
#14
Join Date: Feb 2013
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I'm willing to bet the number of people who really play the mileage game is incredibly small like .5% or less of Skymiles members. The vast majority earn miles and then when they see they have a fare bit they try to redeem for a trip. They aren't following redemption trends and blogs and the industry.
With new redemption options it's far more tempting to use some miles to upgrade their trip when they already have a flight they're about to take especially considering most people probably only fly once a year or even every other year.
Flyertalk people are on the extreme end of the bell curve for knowledge about flights and mileage, and are not at all a good barometer for the general public.
With new redemption options it's far more tempting to use some miles to upgrade their trip when they already have a flight they're about to take especially considering most people probably only fly once a year or even every other year.
Flyertalk people are on the extreme end of the bell curve for knowledge about flights and mileage, and are not at all a good barometer for the general public.
I’d say even your .5% estimate is high.
Apr 10, 2019, 1:34 pm
#15
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