With a series of radically customer-unfriendly moves, Delta Air Lines has become our favorite punching bag of late and the hits just keep on coming. Today, Delta updated the terms and conditions of the SkyMiles program to remove all reference to “award levels”, substituting “award prices” instead. Let’s unpack why that is important.
These were the T&Cs until today (still available in .pdf on delta.com)–
And here is today’s update on delta.com—
Note the subtle changes —
- “regulations” becomes “mileage regulations”
- “award travel” becomes “travel awards”
- “medallion qualification requirements and levels” is added
- “mileage award levels” becomes “award prices”
Delta Air Lines Lays Groundwork for Dynamic Award Pricing
So just what is Delta is up to?
It seems clear to me to that with the removal of award charts online (you can still find Skymiles chart here) and the updated T&Cs today, Delta is preparing to jettison the concept of award levels/charts and will price each itinerary dynamically based upon revenue price and perhaps other factors like status, the number of times you have checked the price for that particular itinerary, and even geographic locale. We are not to the technological point of artificial intelligence, but now more than ever airlines are able to track consumer habits and tendencies, leading to more customized offerings (which can be a good thing) but also an attempt to outfox consumers in a game of chicken.
I envision this change happening in the following way: Delta will come out with an announcement later this year heralding “lower award prices” on “many routes” and will drop the “saver/low” price on some awards to leisure and short-haul markets to something like 10K miles each way instead of 12.5K (as United already does). Thus the family of five can now travel for the price of the family of four.
But the flip-side will be that prices will fluctuate much more frequently, points will be closely tied to revenue prices thereby mitigating award chart “gems” (though I do not picture a purely revenue based system like Southwest and JetBlue), and there will be no transparency as to whether the system is pricing an award correctly — the machines will have won.
The whole concept of “saving up” for an award will flummoxed and the days of stocking up for that dream trip to Hawaii or Europe will be a precarious bet on Delta. There will still be some good deals and those that travel Delta regularly, particularly on expensive tickets, or place heavy spending on American Express credit cards will still likely find premium cabin redemptions attainable, though more expensive than ever before. But for the fussbudget consumer carefully hoarding miles through mileage running and economy travel in hopes of an aspirational redemption like from Los Angeles to Sydney in Virgin Australia business class for 160K miles r/t and no fuel surcharges…forget about it. Delta’s actions today show that we are moving beyond that era in the history of airline loyalty programs.
(Tip of the hat to Gary [who did a magnificent job on Fox News yesterday pummeling Delta])
Leave a Reply