Delta has decided to increase the amount of miles needed for business class redemptions effective for travel starting in June 2014. I wish I could say I am surprised, but people have been expecting a devaluation for awhile now. I think it says something (negative) that Delta announced this via a Flyertalk forum, although I guess they figured those were the people who would care the most. Here are some details and my thoughts on the move.
Details on the Changes
Delta has increased the cost of business class redemptions anywhere from 7% to 25% more. Note this applies to business class redemptions only – Delta’s reasoning is that by June 2014 all of their Business Elite cabins will feature full lie-flat season, thus the redemptions should cost more (they couldn’t have done this before July 2013?!). That’s kind of a bogus reason since almost all US carriers’ long haul flights are lie flat (and even some domestic flights now), but it’s Delta’s prerogative. You can check the Flyertalk forum or Points Guy’s post on the subject for all the new redemption levels – the biggest changes have been from the US to Europe or South America – both have increased to 125K miles round trip from 100K. Delta is also getting rid of the ability to put a three day hold on award tickets which further damages the value of Skymiles. The only non-Americas award price that wasn’t touched was to the South Asian subcontinent (India), which remains at 120K round trip (cheaper than Europe, what?).
My Thoughts on the Changes
Obviously, a major increase in price is bad for anyone who has a lot of Delta Skymiles. What really sucks is that I’m sure it’s still just as difficult as ever to find low mileage awards, but now you need to pay more too (if you’re having trouble, I can help). The only silver lining is that if you are traveling before June 2014, you can still get in at the older and lower prices. I guess that’s a nice concessions, since the usual line is “you have until X date to book at the lower prices”.
I guess another potential positive is this might further delay the anticipated move to a revenue based model for Delta. Frequent fliers have been worried for a while that Delta would soon assign a price to each mile, greatly reducing the value one could get from them. For example, if each Skymile was valuated at one cent by Delta, 125,000 miles would only be worth $1250 for travel on Delta – not enough to fly roundtrip business class to Europe. In that sense, this devaluation has to at least come as a little bit of a relief – you still can get a lot more value out of 125,000 Skymiles than you could from a revenue based model.
I think the biggest worry has to be that other US airlines are going to follow suit and raise their prices. It’s a copycat business, so this just serves as a reminder to earn and burn. I’d say if anyone matched first, my guess would have to be United since US Airways and American are having merger problems right now. I wouldn’t be surprised for the new American to come out of the merger (if it happens) with higher redemption levels though. Sigh. Get out there and fly!