Delta was among the first major airlines to switch to dynamic award pricing. So while most airlines’ award pricing is set in stone by an award chart, Delta’s SkyMiles pricing varies by day, route, time of year, cash price, how many seats are left on the plane, and more.
During a recent interview during the Code 2019 conference, Delta CEO Ed Bastian was pressed to defend how the airline is doing by its most loyal flyers while driving down the value of SkyMiles and Delta Medallion status.
His response? They’re making more flights available when using SkyMiles.
“We’ve made the usage of those points significantly more available. Now, we allow the points to flow dynamically with price points in the market,” Bastian said.
Watch Bastian’s interview below. His remarks on SkyMiles begin around 28:55. Bastian also discusses issues with the Boeing 737 MAX (which Delta doesn’t fly), a poorly handled spat with unionization attempts, and more during the 30-plus minute interview.
It’s a common refrain as more airlines like United move to dynamic pricing for award flights: There are always flights available if you want to use your miles. Under the old model, flights were either available at a set price – or often, not at all. Now, you can always book a flight.
And there’s no denying that appeals to the average flyer who just wants to book a flight for free. There’s nothing more frustrating than trying to use your points and miles only to find that the flight you want isn’t available.
But considering the end result is often unpredictable and sky-high pricing when using your miles, better availability of a bad deal is still a bad deal.
It’s clearly working. Case in point: Bastian said Delta has seen a 30% jump in SkyMiles redemptions, likely buoyed by the addition of using SkyMiles to upgrade to first class. That’s good news mostly for Delta, who can now get more travelers to overpay for flights when using SkyMiles.
On the flipside, Delta’s pricing has given the airline flexibility to sell flights for fewer miles than they used to. We regularly see SkyMiles flash sales with discounts on domestic and international fares. It’s fairly easy to book domestic flights for 15,000 SkyMiles or less round trip.
“It used to be very rigid: A 25,000-mile break to get a domestic ticket. Now, you can get them as low as 5,000,” Bastian said.
Love SkyMiles or hate them, Bastian and Delta clearly know what they’re doing. With the help of some spin, Delta makes the case that the ever-changing pricing when using SkyMiles is a win for consumers, aiming to convince flyers that their SkyMiles are more valuable than ever … all while charging more for many flights.
Lead photo courtesy of Delta News Hub via Flickr
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