Leaked NEW Delta #Skymiles2015 Award chart (well not really but my guess about it anyway)!

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what randy inside flyer thinks the new unpublished award chart will look like

The above photo is a “guess” from Inside Flyer here on boarding area  (or leaked info) about what we will see in 2015. The price pulled is for international round trip travel in coach.

What could the new Delta 5 tier award chart look like DeltaPoints-com blog

That is all well and good but not that much information. The above is the Delta chart ONE WAY with the same idea with red lines for the awards between the low-med-high award making our 1,2,3,4&5. So, for example, one way domestic coach should be:

1 – 12,500
2 – 16,250
3 – 20,000
4 – 25,000
5 – 30,000

Then for a round trip just take them 2x and you get a number. OK but the REAL question is how will Delta determine what price goes where. This, I think, is very simple too given the love of all things revenue based as the point to consider (boy my post from 2 years ago about EOS has become a popular read again).

But just what do I mean. The group 1-5 could be simply broken down by the price of the cabin and seat open at any given time. This would make for a 100% every seat open and a fluid quick way to change the points needed for any seat on the plane. For example, look at this one way flight from DTW-LAX:

possible new award chart finding seats skymiles2015

Now again this is just a simple scenario but it shows the concept of what we could see. The lowest “25,000” point round trip is open if there are seats at this price level. If not, since there are only 2 seats open, and you want to book 3, then you go to level 2 to be able to pay for this award and on and on as each seat is sold either cash or with points (so we would still have to search for just 1 seat at a time like now to spend the least points)

The funny thing about this is it could turn 180* the notion of not booking as far out as you can as when a flight first loads into the system all the seat are open. Thus, if my guess is right, the most seats will at that point be open at the lowest rate and go up as more and more book.

From a revenue side, Delta can 100% control the number of seats at levels 1-5 by price and fare class and from a marketing standpoint say and show every seat is wide open and the point price is fair and a great value compared to buying the same seat (but “price” controlled). This will be especially useful around say holiday travel dates. They can brag that every seat is open around the holidays but as we know these seats sell fast so the points seats will very quickly rise to the level of open seats likely in the 4 & 5 level.

The good and bad side for business class award travel would be this – low level seats would still be available. Partners would not be an issue, just the price. If partners jump the price, you jump to 2, 3 etc.. Peak summer times and best travel days cost more now; same thing would go for points. Travel on off days etc. you could score a better award price.

Is this what is going to happen? It could be and it is a realistic guess. The other reason I say this is say a fare war starts. Say Delta offers DTW-LAX for $99 each way. This still loads lots of seats in at 12,500 each way. They can then reward those with a Delta AMEX to “Pay with Miles” that is buying a ticket with miles at 1 cent each and they can save a few miles buying this “deal” vs. the wide open redemption at low level 1 award.

could delta use fare class as a means to find award seats in groups 1-2-3-4-5

Perhaps a better way than price is fare class but still similar to what I have outlined with price (not just what I have above but the basic idea). This could be so much cleaner than prices and simpler to do. Plus this addresses some other issues in a simple way as well.

What issues? It is well established that the higher up the medallion “food chain” you go the more availability you will have to low level seats. How does Delta do this? I am not sure but the difference between logging in as a Diamond compared to logging in as my wife as Gold or not logged in looking for seats is often a bunch! Same goes for those with the Delta CO-branded AMEX cards. Sometime those flyers will get more access to low level seats! How can this be implemented in the new Skymiles2015?

The computer would look at the request say from a silver medallion, they, since they are not really loved “that much” by Delta, only get a drop of one fare class “letter”. A Gold, maybe 2 or 3 and so on up the chart. The result could be a drop into the lower bucket of award space or it could NOT drop you depending on what fares classes they stick in each group of 1,2,3,4 or 5. As to AMEX, if you have the card, all those could get a +1 bump down the fare class chain for lower award space. This could be so simple to do that even the Delta IT department could use an “if then” statement to make this work (yeah I took “basic” back in school in the 80’s).

One up side for Delta but down side for us would be if say a medallion cancels an award. Delta could all of a sudden sell that lower price or fare class seat that has just opened up at the lowest price it came from. So, if we cancel say a group 1 or 2 award seat the rest of us who could want that would be competing, not just against other medallions, but against the rest of the flying world!

Again, I have no idea if any of this is on point. I think these could make a nice “bell curve” of what seats are open at what level of redemption. But one thing we need to keep in our heads, unless things change, each and every move Delta will ever make will be driven by the cost to the company’s bottom line in every choice and what it means to you or me is a very distant 2nd place! – René
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27 comments

  1. I’m just holding out hope that in 2015 while it will be more difficult to earn miles it will but much easier to use miles.
    Another words today a “basic” economy class roundtrip ticket is approximately “on avg.” 30k to 40k miles. As its nearly impossible to find those 25k seats.
    In 2015 generally speaking will it will be half that, the same or more? Thoughts?
    I have a ton and will continue to use my AMEX DL RES. Card for 99% of my household spend.

  2. I think that if a Medallion cancels out a reservation, Delta may not put it in the same bucket it came from. It will probably instead price it out to match the current buckets.

  3. @Roberto – since it is all just a guess, you could be right. Currently they dump back at the same low level award space. Time will tell.

  4. It really seems like Delta is banking on having a superior physical product and sees little to no value in having a competitive (or even functional) frequent flyer program. This can’t be an oversight – it’s certainly a strategy.

    While it might be slightly nicer to fly Delta when your butt is actually in the seat, for those of us in the game that don’t travel 20 weeks a year and get our miles from churn rather than earn, Delta doesn’t really have any place in our portfolio. I can say personally that I have no Delta points or credit cards and have no interest in starting anytime soon.

    From Delta’s perspective, I’m sure that’s fine by them. I am not a revenue-earning customer for them, so they have no incentive to try to coax me into using their product.

    The problem for Delta will occur when they slash their program to the point where actual frequent fliers find their program so unappealing that it drives them to United, American, etc. I suspect they are getting close to that tipping point based on the huge negative backlash we’ve been seeing over these changes.

  5. I’m just curious if others who read these blogs have a situation similar to mine. My husband flies so much for business that we haven’t taken a true need to fly vacation in several years. He is a platinum million miler with a reserve card who travels strictly in the US which makes him mildly important to delta. If delta is reserving their best seats for such travelers but he doesn’t book those awards, does that mean the award seats for him will go unusedl or will it leave such seats available to those lower on the food chain? I also have to believe that delta must make a boatload of money off the Amex card since that spend requirement is more prominent than BIS miles. I definitely agree with Rene that the mileage runners will be those who are close to the next level as opposed to those who are strictly trying to earn points. Bottom line, the system has and probably will still work for us because my husband values his upgrades and I only use award travel for the two or three times a year I fly with him. I’m really only pissed that I can’t go into the crown room (yes, it is still that to me) with him those times i travel with him and he’s now paying $495 for that card. I’d rather trade in my award certificate for crown room passes because we haven’t used those in years (husband doesn’t want to fly for vacation and business travel agency won’t let us use them).

  6. No matter what the charts look like, high-revenue business flyers will love the changes. They will have tons of miles to spend. Those miles are being paid for in part by the reduction in miles for the vast majority of flyers. Of course the high-revenue business flyers don’t pay for their tickets. Their companies or clients do. The more expensive the fare, the bigger the boost to their personal ff accounts. This seems to be a clear conflict of interest (much more striking than under the current system) that would need to be disclosed on corporate conflict of interest forms and which could merit greater company scrutiny.

  7. @john: Sometimes, employers actually spring for high priced seats as a matter of policy. We still need to book refundable fares, but it is policy to go intercontinental Business Class. So, on my trip to France later this week, I paid $6K for my ticket (which was less than the $12K for some other itineraries).

    And when I go next month, I will take my wife on the trip using the Platinum AMEX BOGO Business Class ticket for $7.5K. All within policy; no conflict here!

  8. @Darth – to be clear all, Darth is talking NOT about the Delta BOGOF cert but the much more expensive to use AMEX Membership Rewards Platinum card BOGOF.

  9. @Rene:
    Actually, it is the International Airline Program through the standard AMEX Platinum Card. Buy 1 Business Class Ticket, get the 2nd for fees and taxes. My ticket would be $6.5K; adding my wife will cost around $1K in fees/taxes. I wonder if she’ll get miles for that?
    So I saved $5.5K for my $450 annual fee.

  10. @John – my husband books his flight with the travel agency that is mandated by his company. The website is configured such that he has a narrow range of flights that he can select to take and it is based on price. If he were to go over the highest amount he is allowed, he would have to explain it to his boss. I personally don’t know many business folks who don’t care about the costs of their flights.

  11. @ Darth There is a conflict as described in most corporate conflict of interest policies when an employee receives a personal benefit (skymiles) from the use of company assets (cash for ticket). Under the 2014 program the employee receives skymiles but the amount of benefit is fixed regardless of ticket price (F and Y fares excluded). The 2015 program pegs the amount of personal benefit directly to the cost of the ticket. The higher the ticket price the more miles in the employees account. And there is a huge difference between the benefit for a discounted ticket and one that is refundable. Ergo potentially a big conflict of interest.

  12. @john:

    Could you please explain how Delta’s new program is any different from just about every hotel rewards program?

    Because if you don’t have a problem with hotel programs, you should not have a problem with Delta’s new program. Or any other airline that might follow Delta’s lead.

    If you take it to its illogical conclusion (i.e., that every employee even participating in a FF program has a conflict of interest) then employers have a right to the FF miles/points.

  13. @Darth Sure. I will explain as briefly a I can. The difference between the delta’s 2015 progam and the 2014 program and hotel programs is that the flyer (employee) is rewarded purely on the price of the ticket. As you know and have seen from some of the examples Rene has posted, there is quite a difference between the skymiles you will earn on the lowest economy fare compared and to the Y fares. That is for the same flight in the same seat. With hotels don’t have several prices for the same room. Club level rooms and suites can be higher than a standard room, but that is sort of like the difference between economy and first class although the price difference is normally not as great. It is true, though, that an employee could get more points by staying at a Westin rather than a Four Points. Because the higher the price, the greater the personal benefit to the employee, it seems only natural that a greater personal benefit could influence an employee’s purchasing decisions with employer’s money. That’s a classic conflict of interest situation.

    Conflicts of interest can be tolerated as long as they are disclosed to the employer and the employer can take steps to ensure that it’s interests are protected. Employers have not raised much of a fuss about traditional ff programs in part because the benefit to the employee was not so directly tied to the amount the company paid. Why is delta making this change? I think it is because it expects to improve its bottom line. It can do that by geting

  14. @Darth con’t. people from other ff programs to switch to delta and getting its existing members to pay more for their tickets. If other airlines adopt delta’s program, this change won’t attract their members. But Delta may be counting on their current members paying more.

    Employers have a right to the ff miles they pay for. Most, but not all, allow employees to keep them. This change and the conflict it poses might cause some to change that. At the very least, I think an employer would want its employees to disclose the conflict so it could keep a close eye on the purchasing decisions if it chooses to. I wonder what delta would do if its buyers got a personal kickback on their purchases and the kickback was higher the greater the cost to delta. If you value skymiles at two cents a mile, we are talking a significant payback to a diamond taking one business-class trip to Europe or Asia. Or companies might just treat it as business as usual.

  15. @john:

    Sorry, your explanation does not hold up. You typically get lower fares the earlier you book your flight; last minute travelers generally pay more for the same flight as someone who has booked 2 weeks or a month in advance.

    Hotels certainly do have different prices for the same class of room based on when you book. For example, if you book really early, you can sometimes get a better rate; and if you book late, all you may have available is a higher class of room.

    However, typically all it takes is one trip when someone books a more expensive hotel before the accounting department/management catches on and says “stop”.

    So, no conflict of interest, unless somebody is willing to risk their job over a few air/hotel miles. The only thing a company do is to enforce its policies and put people on notice for violations.

    In fact, I have booked flights when I leave a day early/return a day late to save substantially on an airfare (I typically fly International Business Class – company policy) and I can save over $1000 by doing so – even when the incremental cost of a hotel/meals is factored in. I also have gone to places that have armed guards controlling traffic into/out of the hotel entrance, so company policy explicitly states “Western Standard” type hotels (Hilton/Starwood, etc.).

  16. Now, as far as value back to the employee, what one fails to consider is the hassle of travelling internationally for business. Many times, we fly on our own time, and do not get comp time; the FF miles/points are a small compensation for the inconvenience.

  17. @Darth @John – sorry some comments are getting stuck in SPAM filer. Good clean spirited banter. Good points on both sides. Not sure 100% Delta but that is just me. 😉

  18. @ Darth, My turn to ask you for an explanation. Please tell me how getting a kickback for spending company money is no conflict of interest. As I said conflicts are okay as long as the employer knows about them and is assured that its interests are being protected.

  19. @darth, Who is to say the employee will always choose the lowest available fare or that the employee might consciously delay purchasing a ticket until only high fares are available or choose a flight with a high fare when flights with lower fares are available? Getting more miles could very well influence behavior in some cases. Thanks for the comments.

  20. @john:

    First, I do not consider it a “kickback”, in the sense that the consideration for the business is too small to influence the decision. It is like a salesman who thinks that he can “bribe” you into awarding a contract because he takes you out to lunch or give you tickets to a sporting event.

    Also, the implicit assumption of a “kickback” is that it is done without the knowledge of the entity paying the bills. All companies know about loyalty programs, so there is no hidden agenda. In addition, many companies have side deals with airlines that guarantee discounts if their employees fly on them.

    Finally, there are programs for small businesses where both the company and the employee gain a benefit – look at Delta’s SkyBonus program. Here, the employee gets his/her FF points and the company gets points for a separate program that awards airfare. I believe UA and AA have similar programs.

    What it all comes down to is whether you trust the employee to act in your interests or not. If you do not, perhaps you should consider whether you really want that person as an employee.

  21. @john (22):

    Some companies take it ridiculous extremes. For example, for me to travel, I submit a travel request to my boss who passes it up through 3-4 levels (to the BOD). I generally have to show options for tickets to demonstrate I am within policy. A little ridiculous given that my travel is an integral part of my job.

    And sometimes the request changes to last minute (due to a paperwork issue) or the nature of the trip changes. Recently, I was left off a cc list for travel approval and was not informed until a week later – the price went up $1,000. On another occasion, I had booked early and got a decent fare. Then plans changed and I had to pay a penalty AND the fare went up by $1500.

    In my situation, regardless of which flight I choose for any given trip, I will max out at the 75K miles, so for me at least, it is a non-issue.

    But YMMV (Your Mileage May Vary)!

  22. @darth @Christine Given the strict travel policies and procedures at your companies it seems your companies see the potential for abuse when employees travel on the company dime. Not all companies are so strict. Every employee should review their company conflict of interest policy and code of business conduct to see how they relate to delta’s 2015 program. If there is any doubt, a chat with the boss or the person in charge of interpreting the policy might be wise. Up to you.

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