Delta President Glen Hauenstein noted that "on average, 4,000 passengers are upgrading with miles each day, with over half of those transactions happening on mobile."
That's great news for flyers who find award tickets too expensive, or too troublesome to book, because it enables them to burn their miles to upgrade their seat on a flight paid for with cash. But the popularity of the option is rough news for frequent Delta flyers who have historically placed a high value on the airline's complimentary Medallion upgrade policy. (Note: We tested Delta's new Upgrade with Miles process earlier in the year, and while it was indeed effortless, it offers a fairly poor redemption value at roughly 1 cent per SkyMile.)
Hauenstein stated that "mileage redemptions grew 12% in the quarter that ended March 31 as [Delta] provided more opportunities for passengers to use their miles." That figure "exceeded full-year estimates," he said, and Delta will add new ways to use miles as currency in 2019 given that its goal is to allow the use of miles "across the entire ecosystem."
Generally speaking, airlines do not like for passengers to hold massive balances of points and miles, which are seen as liabilities on a balance sheet because they make it more difficult for an airline to estimate how many seats actually will be available to sell.
As Delta is making it ever easier to burn miles, it simultaneously is reducing the amount of unused miles outstanding, encouraging passengers to exchange their miles for less value than ever before and subtly pushing frequent fliers to pay for seat upgrades (via cash or miles) instead of holding out hope for a dwindling shot at a free upgrade.
As the quantity of purchased premium seats rises, it's reasonable to conclude that the amount of seats available to be distributed for free — via complimentary Medallion upgrades or upgrade certificates — will be reduced proportionally. This has a direct impact on the overall value a passenger should place on Delta's Medallion elite tiers. As a Diamond Medallion myself, news like this adjusts my expectations of how many free upgrades I'll receive.
While VIP customer support, reduced/waived fees, the occasional Porsche gate transfer and co-terminal changes do indeed make a difference when you travel on a frequent basis, capturing thousands of dollars in value via free seat upgrades has been the major reason for many to stay loyal to Delta.
Should this trend continue — and considering Delta's push to squeeze more revenue from premium cabins, we see no reason why it won't — frequent fliers should consider two things. First, they should consider buying into a premium cabin if that experience matters, as banking on a free upgrade is becoming less and less logical. Second, they should consider diversifying their wallet to include cards that earn transferrable currencies. Amex Membership Rewards, Chase Ultimate Rewards and Citi ThankYou Rewards are looking all the more valuable as shifts like these occur, because they provide flexibility to move points to a wide variety of programs based on your travel needs at any given time.
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