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Will Delta's reported plan to leverage SkyMiles for cash impact frequent flyers?

Aug. 27, 2020
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3 min read
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Will Delta's reported plan to leverage SkyMiles for cash impact frequent flyers?
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There's no question that airlines around the world are facing a bleak financial future, especially over the next few years. In the meantime, most carriers have valuable assets they can tap for much-needed liquidity — their aircraft fleets — with some choosing to leverage a "sale-and-leaseback" option to add much-needed cash.

Given the scale of this latest crisis, though, U.S. airlines have begun looking beyond their previous fundraising arsenal. In June, for example, American Airlines pledged its brand and a mix of slots, gates and routes to lock in funds, while United Airlines secured billions of dollars using its MileagePlus frequent flyer program as collateral.

Related: Delta Air Lines retires more jets amid shaky outlook, nearly $6B quarterly loss

Now, according to a Bloomberg report, Delta Air Lines plans to follow United's MileagePlus move, leveraging its SkyMiles program in order to fund additional financing. While a Delta spokesperson declined to comment on the upcoming deal, it seems the carrier is planning to offer SkyMiles-secured bonds and loans on Sept. 7, according to Bloomberg's report.

SkyMiles members can redeem miles for flights on Delta and its partners. Photo by Zach Honig/The Points Guy.

Of course, the natural question for SkyMiles loyalists is how this latest move will impact the program. I turned to industry analyst and Atmosphere Research president Henry Harteveldt for more.

"It certainly won't have any immediate impact on SkyMiles members, and if Delta runs its business well it won't have any impact on its customers whatsoever," Harteveldt said. "This is certainly an unusual move but it doesn't raise any red flags with me."

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Related: United Airlines mortgages MileagePlus for coronavirus funds

"What I do worry about though is when an airline starts leveraging too many of its assets. That's generally a negative sign, because it has fewer levers to pull later," Harteveldt added. "I think the challenge for all airlines right now is to be very careful in terms of what assets they are collateralizing and for how much."

In other words, if Delta's financial situation worsens significantly, the SkyMiles program could be impacted either way. The sooner leisure and especially business travel return, the better the industry's prospects. Still, Harteveldt doesn't expect this particular move to have any direct impact on SkyMiles members, so we can rest easy — for now.

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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)

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  • 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
  • Packed with credits foodies will enjoy
  • Solid welcome bonus

Cons

  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
  • Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
  • Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
  • Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
  • $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
  • No Foreign Transaction Fees.
  • Annual Fee is $325.
  • Terms Apply.