Forbes Story on Skymiles Redemption on Premium Class Award travel
 

Just saw this: https://www.forbes.com/sites/garysto.../#57be3ae75985
I think this is very true. I will confess that I was never buying premium fares consistently enough to qualify as a high value customer... but I was a loyal customer and a Diamond Medallion since the very beginning. With the changes to the program, I have been spreading my spending across different airlines more, and even dropped the Delta AMEX when they went to a $250000 spend for DM qualification. I understand Delta's point of view but also believe that loyalty is a two way street. If it is true that they are seeing a steady increase in Medallion membership, good for them. It would be interesting to see what happens at the next recession, will the "loyal" high value flyers alone be able to see them through? Just my two cents worth!

And oddly enough I found a HSV-LAX-HSV First Class award last night for 52K miles, which is just barely above the legacy low level award. Even more astoundingly, it is straight single connects unlike the options being offered on other days to connect through AUS of all places.

Of course it was one lonely 52K award in a sea of upper middle and lower triple digits, but it was there.

And the award calendar search worked! :cool:

Most of the destinations shown as examples in the article -- SYD, JNB, Hawaii -- have long had issues with decent premium cabin awards. Not trying to defend DL here, but there are definitely other markets where the deals are not so terrible or difficult to find. Here's the flexible dates calendar for roundtrip Delta One flights between 4/29 and 5/8 on SLC-LHR. Don't know where the guy was getting 400K miles. No these aren't all non-stop's, but then AA/UA do not have non-stop's this route so how is it valid to compare to DL non-stops??

https://cimg7.ibsrv.net/gimg/www.fly...51f3cec420.png

Also not to defend DL, I'd guess that some of those AA redemptions were on BA metal, meaning huge surcharges.

But my experience does match up with the author of the article. I spend more $$ on Delta, but miles on AA and UA. I'm sure Delta is just fine with that.

The spokeswoman (Steele) is not quoted as saying they are seeing a steady increase in Medallion membership; rather she says they are seeing a steady increase in SkyMiles membership. This is just more people signing up for the free program - not achieving Medallion status. Nowhere does the article say their Medallion numbers are increasing.

All I know is, if you stopped redeeming miles for long-haul premium awards in 2008 or 2009, and woke up today and took a look at current redemption values, you'd think it was some kind of joke.

I had no idea you could pay for drinks in SC with miles, nor would I. Now the 10k expiring drink coupons I have in my possession which I have absolutely no use for would definitely get unloaded at the SCs .. Too bad they don’t take those!

Premium cabin awards are definitely higher, but coach is a mixed bag. I did DTW-MBJ this past winter for 18K RT. Rates were definitely not that low back in 08/09. Recently found DTW-LHR for 46K miles RT and NYC-LHR for 20K RT this fall. I believe that low-level TATL awards had increased to 60K RT by 08/09. The reality is that people FT are heavily skewed to people mostly/only doing premium awards. Outside of FT, there are lots more people/Medallions who don't have a problem with doing coach awards.

Agreed that FT focuses on the premium class awards, and the truth is that those were BY FAR the best way to get value out of your miles in the past. Of course there was always debate about the "real" value you were achieving, because most of us would never consider paying the $8k r/t in cash for a 100k US-Europe ticket that calculates at $0.08/mile in value. Or one of the most egregious examples would be JFK-HKG on Cathay in First Class using AA miles -- I think it was maybe 155k give or take on a $25k r/t (!) ticket (though you could do a 1-stop for like $16k). 16 cents per mile!

I think also back then (before the GFC) it was harder to find more "affordable" premium fares outside of the summer/holiday fare sales to Europe, and certainly any time to Asia. But now it's not hard to find NYC-Europe for ~$2500-3000 r/t at nearly any time if you plan right, and even at 160k (award sales aside), that's only 1.5-1.9c of value per mile. Better than many redemptions on DL today, but arguably still a lot worse than in the past.

I think if someone fell asleep in 2008 and woke up today, mileage redemption would be among the least shocking things ;)

The flyers that are most attracted to the best free stuff left DL a while back as DL didn't feel they needed them. But those are also the easiest people to "win" back as they aren't really loyal to an airline, they're just at the airline that values their loyalty the most. (Please note, that I do not feel that there is anything wrong with that strategy) To get many of those people back, they would only need to some combination of increase the number of RUC/GUC, increase the percentage of J seats available for upgrade, and lower the mileage cost on awards. They just don't need to do that right now, but if they feel the need to just put BIS it would be very easy.
https://cimg9.ibsrv.net/gimg/www.fly...9522e764dc.png

Two things have happened to the landscape of great redemptions on biz class over-water tickets:

1 - The price to buy these went down. You can frequently find decent lie-flat seats from the West Coast to Asia for $2500 RT, for example. East Coast to Europe can even be less.

2 - The redemption costs went way up.

So the "good deal" gap has narrowed considerably.

Don't forget, in 08/09, you could also fly LAX-JFK in Y and expect to get 2500 SkyMiles for it. Now, you get way more or way less depending on your fare. Earning has gone entirely revenue-based so it's an entirely different game.

It's true. DL premium cabin redemption are terrible, in general. They try to redeem themselves with occasional sales, but it is a pretty sad state of affairs. Delta doesn't care and this article won't change things.

I've had DL status for 10 years, most of the time DM, and drop to zero in 2020 because Skymiles has been so devalued, especially wrt premium awards.

Touche!

While mileage redemptions might be "bad" I look at it this way. A value of 0.01/skymile (arguably the minimum value you get, and what DL values skypesos at). Any skymiles member earns 5 miles / $ spend thats at least 5% back on spending right there, by the time you factor in medallion bonus you are looking at close to 11%. My travel is out of pocket and my current CC setup gets 4.5% back on airfare, so potential for a minimum 15% back when all is said and done, can't complain much about that.

If you are looking at Delta in isolation, sure.

But you'd do close to as well or better (depending on status) with any other carrier.

And you'd have more valuable and usable loyalty currency as a result.

If I don't want to burn a GUC, it's been a much better value for me to upgrade with points than to use miles than to buy outright with miles. Often it's $8-10k (or 480k+ miles) if I buy it outright vs $2k for an economy ticket and 120k miles to upgrade to D1.

But that 5 miles / $ is $0.20 per mile (or $0.09 for DM). Historically, people would post mileage runs for ~$0.05/mi, probably before elite bonuses. So for the cheap-o travelers the cost to acquire miles has increased substantially. Of course for the high-value corporate flyers, it has decreased substantially, which I guess is exactly what DL wants.

So the program in isolation isn't bad per se, it's just (1) worse than before for many travelers, and (2) worse currently than many other programs. And there are fewer opportunities for "arbitrage" given the dynamic award pricing. That said, it does make it easier to just use the miles instead of hording them for those arbitrage opportunities (although I guess they do exist with the award sales, like the ~128k r/t to Europe in business (although last time I saw that, many flights were pricing around $2k, at least from NYC, and so that's only ~1.5-1.6c/mile, not significantly better than the typical 1.3c.

Well it's been 5 years at DM, I've been DM more years than anything else, as the other years were a mix of PM and GM.

MM is very close but it FO isn't worth much to me so I'm not really interested to be honest.

I have flown those other carriers, and when I am looking at a flight on DL on a new A220 to SEA vs the cruddy slimmed B739ER on UA or a flight in First TCON on DL vs. UA or AA it really is no contest. The delta (pun intended) between DL's skypesos and what are now MilageMinus miles and AA's parkarized mileage used to be vast, not so much now. The reality is that I can rarely find any really usable flights on any airline (and to be fair, I am always looking for 2-4 seats) to the point that I recently just used MileageMinus miles on a domestic Y flight for a family trip. At 3.2c/mi I felt it was a good value compared to the (lack) of reasonable/workable J, and I figured I might as well burn the miles before UA's new devaluation kicks in.

Is there some distance between the usability of AS miles and to a lesser extent AA miles and SkyPesos? Yes. Is it enough to counteract the really poor OT performance and Oasisized planes on AA, definately not. Is there much distance between the usability of MileageMinus Miles and SkyPesos? Not really, and certainly not enough to get me to fly UA to collect miles, putting up with a much worse airline.

Bottom line is that redemption really is not top of mind for me, no airline really has a program that will tie me in at this point. I'll collect miles, and will use them if the opportunity arises, but I am just not sweating it at this point.

exactly the way to think about it. Miles are now worth a little more than 1c. That is it.

The real impact for me is to have given up on airline credit cards. The miles are worthless, so its not where I put my spending.

DL recently stated earlier this year that they expect revenue from the Amex relationship to double from $3.5 billion to $7 billion annually by 2023. I can't imagine they would be bold enough to publicly state such a goal if revenue from Amex spend had been trending downward. Is it really that difficult to imagine that FTer priorities are likely outliers and that most people don't obsess as much over the award programs in general and premium cabin awards in particular? I believe that DL publicly stated a few years back that something like 90% of awards are for domestic coach. Consider the fact this is a self-selected community and those with only a casual interest in award programs aren't really reflected that well here.

When DL moved away from fixed redemptions levels and we started seeing these insane award tickets, I assumed it was only a matter of time before UA and AA would follow.

Well, those airlines are now well past their mergers, they (UA in particular) have made some real investments in their hard products and they seem to still offer better redemption value and certainly better alliance redemption options.

I still prefer DL, but I don't think they can continue to expect the loyalty they have earned when they are no longer so exceptionally better than other legacy carriers.

For me the big difference is that I can do a coach award on DL in Y+, because the seats on the 763/777/330/350s DL flies are not micro-narrow. The Y seats on the UA are horrible in comparison (for me and my normal sized son) not to mention the UA Y soft product is really sub-standard. A little math exercise helps to show this, by taking the cabin width, removing the aisles (typically 19", but 18" on the 10x 777s AA/UA are flying) and looking at effective seat width:-777 (at 9x) has 21.3"/seat
-763 (at 7x) has 21.2”/seat
-A320 (at 6x) has 21.2”/seat
-A330/330neo (at 8x) has 20.8"/seat
- A350 (at 9x) has 20.3”/seat

-737 (at 6x) has 20”/seat
-787 (at 9x) has 19.8"/seat
-777 (at 10x, using 18” aisles as UA/AA are, which is why they are so narrow) has 19.4”/seat

What this means is that I can use an overseas Y+ seat on DL, but not AA/UA or can use certain partners (LH, OZ in *A comes to mind, or CX on the A350, but not the 77W using AS or AA miles). My point being that its much more complex with Y than simply saying "all Y is bad", for me at least a Y+ seat on an A380 or on a A330 or A350 is doable, on a 777 at 10x or a 787 is not.

UA has gone from having J product that was seriously behind the curve, to having J product (the Polaris seat) that is perfectly acceptable on the 777, and tight on the 787 (which is narrower and shorter). Delta's new D1 seat is far better. But UA's Y product, as is AA's is far behind what Delta is offering. Narrower seats (see above) worse soft product. In PE all three airlines have the same seat.

But the reality is that I am happy to trade a subpar J product for a decent milage redemption. The useable tickets at this point are (excepting some *A redemptions, where UA has a slight advantage) in Y, and Delta's product is a real advantage, at least for me, in valuing miles...