Why are Delta rewards so expensive?

Delta Air Lines maintains one of the biggest and most liked loyalty programs in the international market known as SkyMiles. More than 100 million customers are engaged in the SkyMiles program of receiving and using the freemium of flights and upgraded status on Delta and its partners. However, a lot of devoted Delta customers cannot fail to realize that the cost of using the SkyMiles that people earn is rising. Here is a more detailed look at the reasons behind the change to why Delta rewards now cost more miles.

SkyMiles Program Changes

In 2014, the SkyMiles program was redesigned with the integration of a traditional mileage-based model and a revenue-based model. This means that the distance in terms of many miles is directly related to the amount paid for the ticket and not the actual distance traveled. In theory, this model pays more money to the customers who pay more money for their products. But, it has also raised the SkyMiles required for redemption for the award travel profusely. While the new system will mean that flyers in the elite group get more miles for their frequent travel, all the customers will have to accumulate more miles before they can get an award.

Dynamic Pricing on Awards

While most other airline programs have flat rate pricing for award tickets, Delta’s isn’t the same and it is indeed dynamic. The number of miles required varies with the route, trip time, periods of high demand, and other factors. As has been discussed before, dynamic pricing is known to provide customers with more reward seat availability while it results in huge variations in mileage. Most airlines offer a much higher price for the same one-way ticket during the popular routes and travel seasons ranging from 35000 to 350000 or more. Due to the flexibility of the award prices at any given time, it is difficult for the customer to determine how many miles would be required to redeem.

Higher Taxes and Fees

Basic economy and other low-cost fares can be considered to have more restrictions than standard or higher fares when it comes to rewards. Delta shifted more fees and taxes to the end-user who is the customer redeeming miles, and thus you pay additional charges on top of the cost of miles for your ‘free’ flight. There introduced redemption fees which could amount to hundreds of dollars on the ticket are unpalatable to most senior SkyMiles members.

He also pointed out that to gain the same number of miles required for upgrades, members needed to travel more miles on American Airlines.

In addition to the high redemption costs, Delta decided to adjust the Upgrade Awards pricing in 2014 too. The current requirement of Medallion Miles to switch from economy to first class for Delta Airlines’ tickets eligible for this offer has significantly risen. The upgrade award miles for flights within 500 miles of the origin/destination airport were removed for One-Way flights and doubled for Round-Trip flights The upgrade award miles for domestic flights over 500 miles increased from 25,000 to 32,500 miles one-way. On many international routes, even business and first-class upgrades may now come with additional costs that range from hundreds of thousands of additional miles.

Limited Partner Award Space

The process of earning Delta miles is not a challenge given the co-branded American Express cards or just flying on a Delta flight multiple times but the desire to redeem those Delta miles for premium flights, for example, on Delta’s partner airlines such as the Air France and KLM is almost equally impossible. That way, Delta appears to cap reward seat inventory for its partner airlines. Even though the members can accumulate a sizeable amount of SkyMiles, the odds of getting the award ticket with the preferred date and connection are slim.

Extremely Limited Low-Level Awards

They are very scarce even for Delta's flights and for those the lowest ‘tier’ of flight redemptions at 25,000 round-trip miles is considered. Main Cabin reward tickets are now offered at just between 35,000 and 60,000 miles on a round-trip basis in Delta. To be able to fly internationally in Delta one business class you may require as few as 280,000 or more than 500,000 SkyMiles to be issued a ticket. But again, these outrageous miles costs for premium seats are impossible to attain unless you are a frequent flyer and you meet the requirements of becoming a Diamond Medallion elite status.

What Should Delta Do?

A majority of Delta’s customers who travel frequently believe that the SkyMiles reward program is almost impossible to obtain. The extremely high prices for flights, when compared to saver-level award space, means that the program’s benefits do not accrue to the loyal flyers. Some people think that Delta should look at other airlines, such as Southwest Rapid Rewards, that have clear rules for earning and redeeming miles for travel.

At the least, Delta could regain consumers’ approval by being more upfront about the dynamic reward pricing. An advanced calendar that provides an option of viewing the cost in terms of miles depending on the chosen dates may assist in setting a proper customer expectation. It would also provide flyers the price stability whereby they know that they can book a seat at the going rate, were there to be a separate low-level award chart with seats available at the published rate.

The Final Take

The management of Delta’s SkyMiles program has changed its goals to work for all the wrong reasons rather than giving their customers value for their loyalty. On one hand, the airline has many opportunities to earn miles; however, it has purposely set high restrictions and costs for the awards. With minimal restrictions on price and a lack of published award charts, Delta appears to increase redemption requirements whimsically depending on the revenue goals but not necessarily the customer experience. Unless Delta changes some of these unfavourableSkyMiles policies, all the frequent flyers will continue feeling ripped off each time they chase after more and more expensive, virtually unattainable elite status and meager rewards from the airline.

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