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Who would suffer MOST if Delta goes 1 SkyMile = 1 Cent? American Express Corporation!

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Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


straw break back

Delta has made a bunch of customer hostile moves this year as I outlined recently. I am sure Delta has run all the numbers as to the number of elites each of these moves will cost the company in defections to other airlines or other “modes” of transportation. If Delta is good at one thing it is numbers. They no longer care about public image – just the raw numbers and the effect it will have on the DAL stock price.

is this what a skymiles is worth

But you know who would suffer the MOST if Delta moves to a 1 cent per Skymile value as my fellow BA blogger MJ suggested could be on the way? AMEX. It was announced in Bloomberg today that AMEX is losing their deal with COSTCO and that likely will have a big impact on that co-branded AMEX card. The article said:

“The Costco partnership accounts for about 10 percent of the company’s total cards, Campbell said. That would be about 11 million of the 112.2 million cards in circulation at year-end, according to figures AmEx disclosed last month.”Bloomberg.com

Now this is a rather harsh blow to AMEX. But AMEX has locked up a multi-year, 2 BILLION dollar deal with Delta and the co-branded Delta AMEX cards – but what if. Yes, that is the hulking elephant in the room. What if Delta DOES soon move to 1 cent per Skymile (or even so closely ties the value of redemption to that number that in reality it is almost 1 cent per Skymile with the “new” award calendar).

I can promise you, millions upon millions of Delta AMEX card holders will DUMP their Delta AMEX cards if Delta makes this type of move either publicly or by perception that a Skymile is now 1 cent in value. Why?

The real value to most folks is spending points for trips that would cost too much in cash. If they are getting a trip to Europe for 125,000 Skymiles or to Austraila for 160,000 round trip in business class there is REAL value rather than paying $3-6,000 or more for those tickets. If people have to pay 200,000 or 300,000+ points for that kind of ticket there is no longer any reason to push spending to the Delta AMEX family of cards. They will look at other, better choices like the Barclays Arrival+ card or Chase Sapphire Preferred as better choices that give more value.

For me, who will still be flying Delta for at least the next two years (I am Diamond for that long and might as well ride it out even with all the changes), I will keep holding my Delta AMEX Reserve card at least this year if not into next as I like the perks it gives me like more upgrades, more MQMs and the 1st class BOGOF cert. But that could change down the road if Delta DOES soon move to that 1 cent per Skymile valuation!- René
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Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by American Express.

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Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

René de Lambert is a contributing writer and the founder of RenesPoints. He is an avid Delta and SkyTeam flyer who has held Delta’s top Diamond Medallion status for many years and flown millions of miles.

23 Comments

  1. I think they will get to that valuation number (or something close to it) but will make the program so confusing and/or cloudy (esp with the removal of the chart) that no one could be absolutely sure on the valuation at any given time.

    It might be the case where we’ve hit that devaluation and not even know it.

    • @ED C – Oh don’t you worry! We bloggers will show the REAL cost in BIG posts and go on national TV and show the truth. Everyone WILL KNOW! 😉

  2. Rene,

    Here is something interesting for you. There was article this morning stating that AMEX just lost the Costco contract starting in 2016. They mention this in the text:

    “But with Costco, it just didn’t make economic sense, Chenault said. That’s partly because even the deal with Delta for example was less lucrative than they had anticipated. The company also lost its agreement with Costco in Canada last year.”

    Read more: http://www.businessinsider.com/american-express-costco-deal-expiring-2015-2#ixzz3RYpcOkCO

    What do you make of the article stating the deal with Delta was less than AMEX was expecting..perhaps that they wont be selling as many miles? All of the evidence sure is trending that way…

  3. A couple of things.
    Rene, I find it hard to believe that Delta would not at least partially include AMEX in the discussion of some sort of radical change that would upset the Delta/AMEX paradigm. We’re talking billions of dollars.
    Maybe Delta is acting alone but I kinda doubt it.
    Second, it would be impossible for DAL to somehow hide a $.01 per mile program when an RT form ATL to LGA costs $278 or exactly 27,800 points:)

  4. This post made me realize something – Delta wants to be the Capital One of air travel – the appearance of value and perks without actually offering any in return to valuable customers.

    I’m really torn at the moment. I’m a DL GM and AS Gold. I travel about 100K miles/year on paid tickets, mostly for work, worth about $10-$12K in spend. If I throw in my partners travel, we spend close to $20K a year total between the two of us on flights. I just don’t know what alliance to go all-in on. Delta seems like they’re dead set on their race to the bottom. UA is, well it’s UA. AA is interesting, but I don’t see a ton of value in their program either. Part of me almost wonders if I should just point all my miles towards Flying Blue or something and ditch US carriers altogether.

    What’s your thoughts, Rene?

    • @JGfromOC – Credit to KLM or AF is bad call. Credit to AS could work. Many are flying AA and will credit to AS. I think we will know the answer to your question in a few weeks or less. Stand by is all I can tell you. It is up to Delta to make the next move.

  5. Yeah, good point. For now I am crediting all my current travel to DL (about 40K MQM’s and $3K MQD’s) so I’ll at least lock up the MQM’s for GM next year. If DL doesn’t stop descending, then I will credit to AS from here on our and go for AS 75K.

    Only major downside for me is lack of international lounge access when traveling to Europe and Asia.

    • @JGfromOC – We sure are at a tipping point. This could go either way. Fun to watch no matter what happens.

  6. I’m with you all the way on this. I’m already thinking about dumping my Delta Amex. The only reason I haven’t is I’ve already got enough miles planned to keep platinum for another year, so I need to meet the spend.

    That said, I’m also considering crediting my two long upcoming flights (DTW-LHR and DTW-SYD) to another airline and ditching DL now. I’m just not exactly sure what I would get out of that strategy.

  7. I stick with Delta because the Amax helps me achieve gold status. My family uses my sky bonus and we spent over 25,000 last year with delta. With the loss of chart and potential one cent = 1 mile I am not sure where to move all our business too. I don’t fly quite enough to get mid-level status on any other airline.

  8. @Gordon, you should hit up Alaska Airlines. They will give you a status match to MVP Gold and you can still fly DL and American while crediting miles to Alaska – which actually has a pretty good rewards system and good partners.

  9. Of all the things Delta has done to defecate on (and piss off) their customers, nothing compares to the recent sleaze of hiding the reward chart and effectively moving to hidden pricing for awards. Unless this changes and soon, I’m done. I only have about 100K pesos now, and I may just write those off – I’m certainly not going to accumulate another penny’s worth of Delta’s currency. I have both personal and business Delta Amex cards (my spouse does also) but these cards will not be used again, and unless Delta reverses course on the latest move, I will be canceling all 4 of our Delta Amex cards upon the next statement.

  10. I think if we were real about it, we’d understand that SkyMiles have been roughly worth a penny a mile a long time for people with real jobs. I know any number of people who have never been able to make a successful redemption without my help — and some years ago I stopped “helping” as it was not worth my time when it wasn’t worth theirs. I don’t like the changes but I also don’t think normal people pick an airline based on the loyalty program…

  11. For my wife and I we gave essentially valued these at this price for sometime. Since MQM and 100% flexibility are most important to us along with the card perks we actually utilize PWM often. We extract value in the experiences together and flying upfront doing them – while still earning elite perks. I’m sure we are the ideal Delta customers in many ways. With that as long as full
    MQM is available via PWM into the future, I plan to stick with Delta and our reserve card as upgrades on the routes I fly still end up in my hands and they by far have the best CS (currently).

  12. rene – how does having the reserve card provide you with more MQM’s?

  13. Well good to know you will be with Delta for at least until your Diamond runs out – which will be never! You are too good a meeting the requirements by hook or by crook. I wish I knew what the folks at Delta thought about your blog. 🙂

    • @Dale – They have told me. “They are aware I have a strong readership” 😉

  14. Poor AMEX…they just lost a ton of business due to them loosing COSTCO account starting next year. Now Delta!

  15. I have been GM for 2 years now, was FO for 4+ years before that. I have had the Delta AmEx card for 15 years now, and have met the $25,000 spending threshold on the Delta Platinum AmEx for at least the last 8 years (maybe more?). But last month I picked up one of those Double Cash Back cards from Citi and have moved my spending there, just in case Delta made a move like this. If this Redemption=$.01 does go through as we both fear, I will drop my Platinum Delta AmEx card; possibly even on the day they announce it. I just can’t justify Delta points over cash anymore.

  16. amex lost Costco shares plumetted just now look
    REPORT: American Express is breaking up with JetBlue

    if they did sign with Delta Delta will be taking away almost all perks having the card

    • @Robert – I hold NO AMEX stock nor have I ever but I am thinking of shorting it until 1MARCH Delta enhancements

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