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Delta Cuts Some Frequent Flyer Fees but Ups Others

Let’s begin at the beginning, by quoting the lede in yesterday’s official news release from Delta:


Delta Air Lines is eliminating award ticket redemption fees for SkyMiles frequent flyer members. Effective immediately, members will no longer pay fees of up to $150 for award tickets redeemed within 20 days of departure.

That’s a significant move on Delta’s part. The airline didn’t disclose the amount of revenue generated by those so-called close-in fees, but it’s considerable. My own best guess is that the fees account for tens of millions of dollars annually.

Which raises the question: Why? Why are they taking the revenue hit? And why are they taking it now?

First, and most obviously, this is a competitive counter to a similar move made last summer by United, which is poised to supplant Delta as the world’s largest airline when it merges with Continental later this year.

But there are larger forces at work here than the skirmishes of warring mega-carriers. Delta is fighting to resuscitate its sagging reputation.

Since the implementation of Delta’s three-tier award chart in September 2008, SkyMiles has come to be viewed as among the least generous programs for award availability. The program is widely derided as SkyPesos, a pointed statement of travelers’ loss of faith in the program’s value.

That perception was reinforced by a recent report on award availability, in which Delta award trips were successfully booked only 12.9 percent of the time, second worst of the nine U.S. programs reviewed.

In short, Delta has an image problem. A serious one, that could have a significant negative impact on the airline’s earnings. SkyMiles, after all, is a loyalty program, designed to maximize not just loyalty but consumption.

The fee waiver is clearly designed to restore some of SkyMiles’ lost luster.

The news release is a textbook case of defensive communications, including the following, which could be interpreted as an acknowledgement of Delta’s award-booking problems:


We want members to be able to redeem their miles—whether it’s for a last-minute trip or a vacation of a lifetime—and eliminating this fee for our loyal travelers makes doing so significantly easier. We are actively listening to customers’ concerns about the SkyMiles program and are responding.

That statement is followed by a bullet-point list of recent SkyMiles changes—mostly benefitting only elite members and SkyMiles credit card customers.

But then, buried at the bottom of the press release, Delta slips in this:


Delta also has changed award ticket redeposit and reissue fees to make them consistent with fees for non-award tickets. These fees, which have increased from $100 to $150, will continue to be waived for SkyMiles Diamond and Platinum Medallion members.

So, all P.R. fluff and dissembling aside, Delta has eliminated one type of fee, but increased fees elsewhere. No doubt the rush-fee waiver will affect more SkyMiles members than the increased redeposit and reissue fees. Net-net, SkyMiles has taken two steps forward, one step back.

And the crucial question of award availability remains: What is Delta doing to address that issue?

Reader Reality Check

SkyMiles or SkyPesos?

What has been your experience when redeeming Delta miles for free flights? Were seats available or not? And at what price?

What’s your overall assessment of the value of SkyMiles?

  • not listed

    I tried booking a flight for 25,000 miles reward travel for the last month. I have been very flexible and have tried for flights 3 months and six months in advance and there is nothing. The ticket agents only want to search for 3 days in advance and prior the suggested date. I have manged to check just about every available date and nothing is available for my domestic travel plans. Last year, it was possible to do the same basic flight with the same basic advance booking. Delta 25,000 mile rewards is a sham and the agents have gotten less and less helpful (probably because they nothing is available).

  • doreen sheinman

    I had no problem being able to use my Delta miles but they wanted to charge me 60,000 miles for one way to Quebec, for a cruise! I purchased the ticket instead but doubt I’ll ever have the chance to use the miles when I want them.
    I am somewhat visually impaired and after imploring the “customer service” rep to help me, she did ticket me without the $20 service fee.
    Was very difficult to get through to a person!!

  • Susan

    I must be a lucky person. In 2004, I used miles about 3-4 weeks in advance for a trip to Madrid. And on June 2, I got the 1-stop fastest route from New Orleans to Barcelona and back for the end of July for 107,500 miles otherwise I would have paid around $1600! I’ll use the miles. I put everything and I do mean everything on my credit card to keep the miles flowing.

  • md

    We have been very happy with Delta Award tickets. We have taken grandchildren to Europe several times on miles. Up to 9 people at a time. The key is to PLAN AHEAD. We try to plan our trips 330 days in advance and have never not been able to get on the flights we want.

    It is a little frustrating that the three tier program has raised the number of points we need, however.

  • Shindig

    Try to get an international Business First reward for two, at the basic redemption rate, to ANY destiation in Asia the day the eligibility starts. Can’t do it? Didn’t think so. Tried for four times over the last year. Go figure.

    I have in the past redeemed over 300k and 500K on United and AA for international travel as well as 140K on Continental. Delta? No chance.

  • Dave

    It seems that the 25,000 ticket is becoming a rarity. Unless you plan way in advance, or very last minute and get lucky, you’re looking at 32,500 at least. I’ve only been able to get a 25k ticket within a day or two of departure. Planning so far ahead just doesn’t seem to be an option. I wish the 1-3 month window would produce more 25k tickets.

    Also, I really wish the Low, Medium and High designations on their award calendar always meant the same mileage. Sometimes Low is 25k, but it’s usually higher.

  • RH

    Domestic low award availability – even 11+ months out – on Delta is a myth. Looking for 4+ consecutive routes, there are many, many key routes where there is not a single low award to be had. In the off chance of finding one or two low awards (one seat, one way), there is no way to get the return.

    The same goes true for most (but not all) international routes on Delta. The low awards are very scarce, at best.

    The program is really a fraud, as the low awards exist only on paper, but not, for most people for most routes (off peak, 11 months ahead, etc.), in reality – both for domestic and international.

  • not listed

    Even as a platinum member for the past two years, getting a business class award ticket to Asia using Delta Flights for the low award level is next to impossible. Have tried to get it exactly 330 days in advance for travel during months of November, December and January and could not get it even with flexibility of day of travel. Had to use mid-level award miles. The low level awards on Delta Flights are a joke and an insult.

  • Evangeline

    SkyPESOS.
    Short domestic award trips can be had on less desirable flights and redeyes if you are flexible. International business awards are non-existant at reasonable mileage levels. Truly a sucker game for the consumer. And Platinum upgrade certificates force one to buy a coach ticket that’s double or triple the price of a normal ticket.

    I think Delta is finding out how much of this they can get away with. My loyalty’s been pushed yo the brink. As other medallion members have done, I’ve switched to American Airlines, and am ditching Delta’s AmEx card

  • DSK

    I purchased ($) a ticket through Delta and later decided to try and upgrade my flight to first class using Skymiles. They told me I could not upgrade due to the class of ticket I purchased. Never had that problem when it was NWA.

  • Betty

    I have tried to book to Ireland and Delta wants 140,000 miles. This used to be available for 60,000. There is no low tier rates.

  • loyal traveler

    SkyPESOS

    We didn’t have these problems as Northwest cutomers. This merger has been a rude awakening and we regret not using our miles once they announced it.

  • Steven

    i tried to book a flight from Frankfurt germany to Los Angeles , Delta will charge me 120,000 Miles for a Return Ticket ( United only 60,000 ) same day departure and return. Delta is charging me for a Mileage Ticket ex Germany over 300US$ Fuell surcharge , if i book the other way around ex LA to Germany i would pay only 65US$ …United is charging less on Taxes and Miles ….

    Delta has become more and more a rip off Airline ….

    I’m thinking about to sell my Miles on ebay or craigslist before i get charged the double miles and Fees for a free Mileage Ticket.

    Poor Service on your loyal Customers!!

  • Maurice

    There are no, repeat, no low award level intl biz class seats except for last minute departures…and even those can be a problem. More amazing…high award dates on the calendar when less than 30% of seats are occupied. Delta, like everyone else is trying to maximize revenue…but how much is it costing them in loyalty (does that still exist anymore?). Any intl trips more than a week or two out will be mid and high level awards (why settle for $1,000 when you can get double or triple that from AMEX for biz class seats).

  • Brent

    I believe the calculation is that because they have such horrible availability, you’re far more likely to change closer to departure to take advantage of 1) lower mileage award 2) better flights. They’ll make more $$ by increasing the charges for that while touting the removal of the under 21-day fee.

    This way they get the same fee revenue while benefiting from appearing to put some logic in their fees–all the while charging more for “taxes & fees” once you go to ticket or need to make a change, that you do directly without any help from them.

    As I detailed on a post about the comparative ease of booking between airlines, DL has the one of the worst airline computer systems, with many hidden failures. e.g. LAX-CDG showing only 2 choices, one being LAX-LAS-CDG [stop SLC], while showing only a much higher mileage rate for the [same] nonstop SLC-CDG.

    2 minutes later you can ask for the same route/date and it will respond with 10 choices, 2 minutes later it will show you 5. At NO time does DL respond with anywhere close to all the connecting/Skyteam possibilities. It also happily contradicts itself [LAX-ATL-CDG, but no ATL-CDG for the same flight, etc.]

    Another issue: no ability to select all area airports [i.e. JFK/LGA/EWR] as a destination, nor does it connect up intra-airports flights for connections [into LGA/out JFK] even while on occasion they will show a 9+hour connection.

    Yes–the fees DL charges are ridiculous, when they make you do all of the work. And in DL’s case, because of the Yugo-like computer, you have to do 10 X the work, flogging the little DL booking mule–and still not end up being able to book the few seats they’ve sprinkled around their system at the standard rate [we shouldn't use their deceptive "low" title].

    When you click the “My dates are flexible” to get the monthly grid, often it doesn’t match actual availability at all–usually posting med/high flights even on the when rare low day shows.

    BOTTOM LINE: DL is the worst airline booking experience because of computer issues. US has the worst/fewest number of seats, but will at least show 3 segment connections etc., so they aren’t making you work as hard to find what [little] they have.

    They should be forced to report how many seats–by route–they have so you can decide on the basis of facts which frequent flier program you should be loyal to. But none of that will tell you how difficult it is to actually redeem – something they are well aware of, and only continue because they prefer it the way it is. Of course they’ll howl, saying how proprietary it is, how impossible–just like they did when they were being ordered to show on-time records by flight/route.

    Machines are only as good as those that program them, and having had the same [underpinnings] system for years, they’re well aware of the limitations, and still do nothing.

    On one of those conference calls airline execs make to promote the latest financials, or to promote some new route etc., they should be forced to attempt to book a frequent flier ticket via the web, and see what they say then.

    The airlines are closer to Lehman’s et al on Wall Street than anyone wants to admit. They’ve bundled massive amounts of miles and sold them to outside entities [AMEX et al] when it could all collapse whenever people realize it’s a huge bubble of expectation. If everyone tried to redeem their rightfully owed trips, what would happen?

    Don’t count on a bailout next time.

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