Delta Introduces Discounted Awards for 5,000 Miles

May 18, 2015

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Delta has made some major changes to its SkyMiles program in the past couple of years, including switching to a revenue-based mileage-earning formula, gutting partner airline earning, introducing new five-tiered award charts (then removing those charts from its website) and running some 10,000-mile award sales.

Now the airline has introduced 5,000-mile awards on a few routes, such as the following example in June between Los Angeles and San Francisco.

Delta LAX SFO

And this route between Seattle and Portland:

Delta SEA PDX

Unlike British Airways’ Avios program, the discounted awards don’t seem to be based on distance, but rather on price, and rather loosely at that. For instance, here is the calendar of flights on the Seattle-Portland route, all of which are pricing out at $72 on days when the 5,000-mile awards are available.

Delta SEA PDX price

And here is the LAX-SFO route, which costs $72 most days (some are $106, even though they still price out at 5,000 miles).

Delta LAX SFO price

By contrast, you’ll notice that on other short-hauls like this one from Detroit-Chicago, awards price out at 10,000 miles.

Delta DTW ORD miles

And fares are about $102, slightly higher.

Delta DTW ORD price

So while this doesn’t seem like a strictly revenue-based move, it does seem like the next step in Delta’s evolution to a totally revenue-based mileage program where both the miles you earn and the miles you redeem are more closely correlated to the price of airfares on the routes you fly.

I currently value Delta SkyMiles at around 1.2 cents per mile, and based on these award valuations, it looks like Delta does too, with the per-mile rate on these awards ranging from about 1 to 1.4 cents apiece.

While being able to book discounted awards, even on highly competitive, cheaper routes is a good thing (after all, it’s still better than paying 12,500 miles each way), I think this is probably the first of many steps we will see Delta take en route to instituting a revenue-based formula on the redemption side of its award program as well.

For more information on Delta and the changes to its SkyMiles program, check out these posts:

Hat tip: Delta Points.

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