Over the past several years, Delta has made numerous changes to its SkyMiles program. In 2014, Delta completely changed how passengers would earn SkyMiles flying by going from a distance flown calculation to one based on the base fare of the ticket price.
On the redemption side, co-branded Delta American Express cardholders including those of Gold Delta SkyMiles Credit Card from American Express, Platinum Delta SkyMiles Credit Card from American Express, and the Delta Reserve Credit Card from American Express, were given the ability to purchase tickets using Pay-With-Miles, however in 2015 Delta removed their award chart making redemptions variable, and most recently announced the ability to upgrade cabins with using SkyMiles.
It would appear that ultimately Delta is trying to put a valuation of 1 cent per SkyMile based on these actions. For example, by removing the award chart, Delta can now tie an award redemption amount to the cash ticket price.
Below is an example of a trip from New York (JFK) to Rome (FCO) with an award price of 125,000 SkyMiles (+$70 in taxes/fees) or a cash price of $1,563 – a ratio of .0119 cents per SkyMile, but no Medallion Qualifying Miles earned.
When Delta overhauled earning SkyMiles in 2014, accruing miles became substantially more difficult as the system now became a percentage back of your ticket price for future travel. To elaborate, a Diamond Medallion earns 11 SkyMiles for every $1 in base fare.
On a $300 ticket with $35 in taxes will yield 3,300 SkyMiles or approximately 9.4% back of total purchase price that can be used towards a future Delta ticket (assuming a 1 cent to 1 SkyMile ratio and redeeming with Pay-With Miles). The rate decreases as other status levels earn between 7-9 SkyMiles and non-status earns just 5 SkyMiles per $1 in base fare.
Delta SkyMiles has added partners including American Express, Hertz, AirBnb, and has programs like SkyMiles Dining and a shopping portal to earn miles, however these offers match standard cashback credit cards and cashback shopping portals without restrictions that Delta imposes on redemptions.
From ordering a premium cocktail in a Delta SkyClub to redeeming for a Delta Vacation Package, the program has seen and will continue to see adjustments that make Delta SkyMiles a restricted currency that can be used within their large ecosystem.
Feel free to weigh in with your thoughts on Delta’s progression towards making SkyMiles a currency in the comments below.