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The 12% growth in Sky Miles redemptions appear to be compared to Q1 of last year from my understanding of the conference call today. They attribute the rollout of "SkyMiles as currency" to mobile as the driving factor. People are probably more impulsive to spend those miles on an offer on their phone than logging in via web browser. Half of upgrades using miles happened on mobile. Mobile is now 20-25% of their direct bookings.

Much of what they say regarding AMEX revenue is annualized projections. One analyst pressed them how they can project a doubling of AMEX revenue by 2023 and wanted more transparency behind that. AMEX and DL have a confidentiality agreement regarding details of their agreement, although both are public companies and must post their respective revenue and expenses, they don't give breakdowns and numbers of AMEX members, average spend, etc in that partnership.

Joseph DeNardi -- Stifel, Nicolaus & Co. -- Analyst
Yes. Good morning. Ed, in 2018, you guys received $3.5 billion in cash from the selling miles and reported about $1.5 billion in marketing fee. You're on track for $2 billion in 2020. If you can get to $7 billion in 2023, you'll be doing $3 billion to $4 billion in marketing fee. How could you possibly not break that out as a separate business unit? I'm not talking about spinning it or selling it, just segmenting it out. What are your thoughts there?

Ed Bastian -- Chief Executive Officer
Well, my thoughts are as a good problem to worry about, Joe. We are -- first of all, we are pleased and thrilled with the new renewal. AmEx is an awesome partner and our two brands line up so well strategically and with our customers and our people. As we grow our loyalty program, you're right, there will be a question of disclosure in terms of providing better insight from an ownership perspective and a governance perspective into the drivers of our profitability into the future and whether that's in a segment or whatever disclosure format, I am not sure what it will take, but it's something that we've been giving greater disclosure to, as you know, and we'll continue to consider that.
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The AMEX component is not insignificant, and those 50% margins can really help ease the pain of a quarter when there might be a little pressure on flight operating margins.

Since nobody posted the link yet, here is Ed on CNBC this morning... https://www.cnbc.com/2019/04/10/delt...-earnings.html
Transcript of the Conference Call: https://www.fool.com/earnings/call-t...gs-call-t.aspx

I am a very happy shareholder this quarter and it's nice to see their performance be reflected in the stock price, since in 2018 it seemed that UAL got all of the love. But the street is fickle and once it became well-known that DAL did not have the MAX, it became the darling of the major airline stocks again, and then this quarter turbocharged that.

pulpfiction78

There are not 4,000 PAX every day that think they need to unload Skypesos.

The upgrades must mostly be an impulse purchase from someone that don't understand the valuation. They may be sitting on bonus Amex signup Skymiles and fall for the sell.

Exiled in Express

I made a domestic redemption this week that worked out to about 2.5 cents per Skymile. That is the third one this year in the two cent neighborhood. Given that value I am apt to at least temporarily shift spend from 2% cash back to DL Amex to restock the miles. Delta traded distressed inventory for some future high margin income.

bennos

In general, if you get a "upgrade for only $xxx offer" there is usually a toggle to switch from $ to SM. This can (eg) be at the checkout page (website), or viewing your itinerary after purchase.

While some here are waiting for the return of 80k J redemption to Asia, I've switched to exactly what you describe. 2500 miles to guest someone into the SkyClub? Sure, why not? 20k to upgrade a work trip booked in Y? Absolutely, especially since you don't have to play games with upgrade inventory. Perhaps one day Gogo passes will be available for purchase with SM.

Sure there are occasional better redemption values out there, but I have a ton of SM, value them at $0.00, and these marginal redemptions dramatically improve my travel experience in many cases.

Loadmaster

I purchased one the other day at 0.01069ish for a flight that was over a week out with only a few seats left; I figured the 11,200 Skymiles was decent, plus I like that little MQM bonus

beachmouse

Cledaybuck

I was thinking this too. With DL's dynamic pricing model for miles redemption, this is less reason to hold onto miles for a better value (although, obviously, it does still exist. Especially on international partners). People would be less likely to hoard miles and just spend them as they go knowing the value is all going to be more or less the same.

xliioper

I recall DL published a stat a few years back about the percentage of awards redeemed for domestic coach (unfortunately, I can't find it anymore). I seem to recall it was in the high 80's. It seems pretty clear that number of flyers who actually save up for J awards or obsess about "maximizing CPM" is actually pretty small and that FT's do not really reflect the typical Skymiles member.

Cledaybuck

Over 70% of DL's revenue comes from domestic flying, so it wouldn't surprise me that a large amount of awards are domestic too. I certainly agree about the typical Skymiles member. If you don't fly that often, 25,000 miles is just a number in your account while $300 is real money. I'm just saying, even for those who pay attention to things like CPM, the incentive has gone down to maximize. Especially if one doesn't fly internationally.

beachmouse

And it's real money multiplied when you're talking more than one plane ticket. I come from a middle class family that's spread out across the USA. My side of the family tends to swap around domestic coach award tickets pretty regularly with a 'hey want to get together for a week' offered, and I carried that over to Spousal Unit's family when BIL was thinking of coming down for a week in the summer but the $1700+ for the tickets for a family of four was Real Money and it felt good to say 'yeah, I can cover that form my frequent flyer miles award stash for you'. (Though. yeah. like a good FTer I've got multiple FF accounts to draw from including a United one I'd been saving up for an international partner business redemption on because it would mean that only the first hop to Houston actually had to be on United)

daloosh

Wow, I didn't know that AMEX netted Delta $3.5B, that is a good cash flow. I had fallen into the mindset of get rid of Skymiles before they devalue even more, but reversed course after getting some good international awards during flash sales, those are good for family trips, especially in J.

kop84

And this is why Domestic Y skymiles tickets are far more popular than international J tickets.
Most people don't travel alone, so getting a few domestic mileage tickets, even if you have to buy 1 or 2 makes the trip a lot more palatable on the wallet.
For international J most people don't have enough miles for even 1 ticket if we're at ~100k miles, and even if they enough for 1 international J class skymiles ticket, buying the cash ticket would likely bust the vacation budget.
So while many here on Flyertalk again on the extreme end of the bell curve focus on maximum RPM and the best values and nicest cabins and trips would could possibly want, the VAST majority of people it's a better deal for them to redeem 100k for 4 domestic round trip tickets to MCO saving a total of $1,000, than it is to use that same 100k miles to get one D1 ticket to Europe and save $4,000. As a trip to Orlando is practical for a family of 4 where a European vacation might not be.

ATLflyer2017

The only thing that bums me out is that you can now buy BE fares with SkyMiles. The only difference is you can't select your seat but I like to pick my seat so I'll end up spending more.