In yesterday’s post about Delta’s planned 2015 changes, I quoted one of Delta’s promises (bolding is mine):
There will be more Award Seats available at the lowest redemption levels and more redemption levels overall, giving you additional options that require fewer miles.
Setting aside the possibility (probability?) that this is a completely empty promise, let’s consider what the above statement means.
More Levels
The second part, which states that they will have “more redemption levels overall” is pretty clear. Today, when booking a flight with miles, each direction of the award gets priced at the saver, standard, or peak level. For example, when booking a US domestic award, the outbound may be priced at the saver level (12,500 miles) and the return may be priced at the peak level (30,000 miles). If so, you would be charged 42,500 miles for that round trip flight.
In 2015, Delta says it will go from three to five levels. InsideFlyer shows what the new chart might look like for flights from the US to Europe:
If Delta keeps to the pattern shown above (and that is a big “IF”), they’ll basically have the same award chart as today, but with new levels in between. For simplicity, let’s simply call the levels 1, 2, 3, 4, and 5 for the rest of this post. Level 1 is the Saver level (above) and Level 5 is the Peak level.
More Award Seats available at the lowest redemption levels
I have to admit, when I first read this promise, I thought that they meant that there would be more availability at Level 1 in the new chart. I initially interpreted the “s” in “levels” to mean that more space would be available at Level 1 for multiple types of redemptions (i.e. domestic awards, US to Europe awards, US to Asia awards, etc.).
After I published yesterday’s post, I realized my error (and so did a few readers here and here). I believe now that the “s” means that Delta is promising more award availability in levels 1 and 2, combined, than exists today at the Saver level. That’s not as promising of a promise as I had first thought, but it is a lot more believable.
Guestimating Award Space
I have no idea how much award space Delta allocates today to the different levels, but from booking many awards I think it is safe to say that the majority of award space is in the standard (mid-tier) level. I would guess that award space typically looks something like this: 20% saver, 60% standard, and 20% peak:
I’m sure the above picture is completely wrong, but let’s just go with it for a moment. Now, let’s assume they introduce new levels by taking half of the current award inventory away from each current level. Half of the saver level availability goes to level 2. Half of the peak inventory goes to level 4. And, half of the standard level inventory is split equally between levels 2 and 4. If so, we would end up with:
- Level 1: 10%
- Level 2: 25%
- Level 3: 30%
- Level 4: 25%
- Level 5: 10%
If Delta were to spread award availability in this way, they could keep their promise while at the same time cutting level 1 availability in half. That is, the two lowest levels combined would have 35% of the availability compared to my guess of 20% saver availability today.
I’m 100% sure that the actual numbers shown above are wrong. However, the expected trend as shown above seems plausible.
Is this good or bad?
Obviously, this is bad compared to the idea of having more level 1 space than exists today at Saver level. However, that probably wasn’t a likely scenario in any case. The real losers, I think, will be those who try to use partner miles to book Delta awards. Today, only Saver level awards are available through partners (such as Alaska Airlines, Virgin Atlantic, Air France, etc.). In 2015, I’m willing to bet that only Level 1 awards will be available to partners. This means that their already very tight availability will become almost non-existent. So, if you were thinking of using Virgin Australia miles to book short hop Delta flights for as few as 6,900 miles you better get that done this year.
On the other hand, for those simply seeking to get reasonable value from their Delta SkyMiles in 2015, the likely trend isn’t so bad. Assuming Level 2 prices aren’t too much higher than Level 1 prices (as InsideFlyer suggests is likely), then availability of reasonable priced awards may truly be better. My guestimated jump from 20% at Saver level to 35% at Levels 1 and 2 combined is close to a doubling of low level award space.
It all comes down to the new chart
The key unanswered question is whether Delta will increase award prices. They said that the new chart would be revealed in the fourth quarter of 2014 (which could mean as late as December 31 2014). The new chart could be a complete overhaul, or it could be tweaks to the current chart with new levels 2 and 4 inserted in-between the current levels. If they go all out and decimate their chart, then obviously all of us with Delta SkyMiles will lose out. I do have a prediction about which way things will go, but I’ll keep that for a later post… (insert evil laugh here)
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What I expect to see is that delta will offer two more award seats at the low level. That would be enough new availability to support the “s” .
Might? be priced higher than current levels? – count on it. Kiss the (newly increased)120K RT TATL BE awards goodbye.
They deserve low SAT scores for the wording. You cant have multiple lowest levels. Maybe they should have said lower levels. Im ready to be disappointed. I dont currently fly delta, but I expect all of the programs to get worse in lockstep. The outstanding miles are a liability on the books, so anything they can do to lower it looks good to the bean counters.
If DL were to go to 4 levels plus a 5th that basically mirrors UA’s partner level and actually release some space on awards similar to AS’s second level, that combined with on-way awards could make DL miles a lot more useful. I think something along those lines will happen, which would give a little of a carrot to their customers while keeping the ‘low standard’ level seats away from partners.
Good pickup on the wording, I bet you are right. I would predict peak level would not be restricted, and available on almost any delta metal flight (maybe limited to elites), like United does it. Also, it may be priced higher than current levels.
Very nice way of looking at this – some good math, combined with parsing the exact language.
The thing with communications like this from companies like Delta, is that it really doesn’t matter if they outright lie – this technically isn’t advertising (which must be truthful, or they open themselves up to consumer and government lawsuits) and isn’t a contract (which can be acted on in court) and so although I’m sure they have some backup data to suggest that it was true when it was said (taking them in good faith) there is no way we, or anyone will either have the data to disprove their claim, nor will anyone be able to sue them for it if it does turn out to be untrue.
As with everyone else, I’m also suspicious of these claims, but will hope for the best, which you have ably illustrated.
True!
“There will be more Award Seats available at the lowest redemption levels.” This statement by Delta is absolutely true – the lowest redemption levels will now be standby seats in economy.
How about standing room only seats?
I’m pretty sure RyanAir tried that already 😀
The intentional secrecy about future award chart might be a ploy to flush out as many outstanding miles as possible. People might panic and book even standard awards for fear of them becoming completely useless next year. This might ironically result in better availability next year.
Ha ha. Its so devious it just might be true. I’m sure it would be good for Delta to get those miles off the books too
How will all these changes affect the redemption’s on partner airlines?
Great question
You can count on any change they make being bad for their customer in aggregate. Until they need to compete with aggressive competition, which they are not colluding with, all decisions will tend to be against the consumers best interest.
I don’t agree with that. They have made significant strides towards improving the actual flights (better on time performance, better catering, etc). Those changes are certainly better for the customers.
Those seem like small improvements in an overall negative trend. They have a financial incentive to improve on time performance. They must have had some competetive reason for the catering. Id like to see more competition in other areas. You are sort of captive to delta in Detroit, which is another problem in many markets.
Are you still “mostly happy” or is reality starting to set in? 🙂
Yes, I’m still mostly happy with the announcement. I will not be happy if they blow up the award chart, but that wasn’t in the announcement