Back in March Delta made some rather unexpected changes to their SkyMiles program, reducing access to reward seats from what was already a limited supply. The real kicker was that folks willing to pay double miles actually still couldn’t be guaranteed a seat on a plane like they had been previously. It was all done with expectation of “fixing” it later in the year with a three tier system that would restore that last-seat availability, among other things.
Well, the details came out overnight, and I’m actually having trouble getting too worked up about the situation. The new redemption levels for a domestic trip are 25/40/60K round-trip instead of 25/50K points. The extra 10K for that last seat is certainly less of an issue in my mind than the 15K increase to get from “Discounted” to “Expanded” availability. The last seat in Delta’s “premium” cabin to Hawaii will now cost 180K points round-trip, a price that is hardly justified by their domestic cabin configuration on the planes flying the route. Europe and deep South America (Chile, Brazil & Argentina) will go as high as 350K for the last seat up front – 125K in the back – and Asia, India and the Middle East will be 370K up front and 150K in the back. At one point someone had mentioned the fare classes that these mapped in to and the Discounted was pretty low – generally at a level where it didn’t make sense to redeem miles for the ticket – but I don’t know where Expanded comes in the alphabet soup of fare buckets.
The new rates certainly are higher, and it isn’t like all the miles sitting in your account earn interest so that pool hasn’t grown naturally. Then again, with folks collecting miles from a myriad of other sources, mostly credit card spending, folks do have more miles than ever. Delta issued 24% more miles in 2007 than in 2004. They haven’t had that many more planes flying so these additional miles are basically all CC spend related. The cast majority were sold to American Express in exchange for much needed cash to keep the airline somewhat solvent, and now they’re effectively welching on their side of the deal by raising the rates for folks to cash in those points.
Alaska Air made a similar announcement earlier, meaning that this could be a trend more than a fad. Hard to know for certain right now. At least Alaska also offered some cuts on other rates, like intra-state travel in the 5 states where they offer such routes.
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