Delta miles seem to drop in value every time I turn around. The latest hit is to international partner awards (see: Delta torpedoes SkyMiles value for partner awards). Delta’s partner award prices for flights to Europe and Asia weren’t great before. Now they’re terrible. To take just one example, one-way partner business class awards from the US to Europe cost 75K miles one-way a week ago, but now cost anywhere from 95K to 195K. That’s rough!
Similarly, domestic award value is often poor. Delta’s award pricing is a mystery in which value goes up and down, but here’s an example of the typical value you might find on a domestic flight. I placed the cash prices directly below the award prices for the flight shown below:
With each of the above fare class options, you would get between 1 and 1.1 cents per mile value by booking with miles instead of cash. That’s not very good. Worse, you wouldn’t earn miles for flights booked with miles, so the real value is more like 1 cent per mile or less. A few years ago, similar snapshots were more likely to show 1.25 to 1.35 cents per mile value. Now, it seems that getting substantially more than 1 cent per mile value on domestic flights is more the exception than the rule.
With award values so low, I more and more think that it makes sense to use Delta’s “Pay with Miles” feature which is available to Delta SkyMiles Cardmembers. With that feature, each mile is worth exactly 1 cent each when you offset tickets in $50 increments. In other words, I recommend paying with your credit card for the final amount of your ticket below $50. For example, if a ticket costs $214, it makes sense to Pay with Miles for the first $200, but not the final $14. The downside compared to paying all cash, is that you won’t earn miles for the part of the ticket paid with miles. The upside compared to buying an award ticket is that you will earn Medallion Qualifying Miles (MQMs) and Segments (MQSs). In other words, you still won’t get great value, but at least the tickets you purchase that way will help you re-qualify for elite status.
For those with Platinum or Diamond status, award tickets used to have a huge advantage over paid tickets: they’re freely changeable and refundable. Now, though, the distinction has blurred. For all customers, Delta no longer charges change or cancellation fees for domestic flights regardless of whether they are booked with cash or as awards. The advantage of award tickets over paid tickets for high level elites is now limited to international flights.
Is Delta Elite Status still valuable?
Like many other airlines, Delta offers elite recognition to loyal customers by offering increasingly valuable perks with each elite tier. Elite tiers are Silver, Gold, Platinum, and Diamond.
The value you can get from the perks at each level depends on how often you use those perks and how much you value them. For example, you might highly value a free upgrade to first class, but if you only fly a couple times per year, it’s still not worth all that much. Still, I find it useful to have an idea in mind of how much each status level is worth to you so that you can make informed decisions as to whether it’s worth going out of your way (or spending more) to earn the next level of status.
In 2019, I pegged the value of each Delta elite status level as follows:
- Delta Silver Status: $200
- Delta Gold Status Value: $200 (Silver) + $200 (incremental Gold benefits) = $400
- Delta Platinum Status Value: $400 (Gold) + $650 (incremental Platinum benefits) = $1,050
- Delta Diamond Status Value: $1,050 (Platinum) + $1,700 (incremental Diamond benefits) = $2,750
Most of the perks that I assigned value to are not effected by the dropping value of SkyMiles. For example, I arbitrarily assigned $50 value to “Waived Same Day Confirmed or Standby Change Fees” that you get as a Gold elite. That benefit remains valuable regardless of whether your miles are valuable.
One big thing has changed, though. I assigned $300 value to waived award change/cancellation fees. Here was the rationale that I posted:
Rationale: This is, by far, my favorite Platinum status feature. In my opinion, it makes your redeemable miles more valuable. The reason is that it makes it possible to book awards prospectively, just in case you’ll fly them. For example, when I found saver awards in Delta One Suites from Detroit to Tokyo, I booked three award seats without being sure whether we’d actually go on this trip. If we had waited until we were certain, the award prices would have been astronomically higher. I’ve even been known to book multiple awards for the same trip in cases where I wasn’t yet sure which days we wanted to travel.
In summary, the primary reason I was excited about this feature is that it made it easier to book awards that offered high value for my miles. With each SkyMiles devaluation, though, this becomes less and less relevant. There are now far fewer high value awards to be found. Platinum status, therefore, has become less valuable than before.
On the other hand, improvements to Global Upgrade Certificates has arguably made Delta Diamond status more valuable than before. Upgrade certificates can now be used on Virgin Australia flights. Plus, upgrade certificates with Air France flights have been enhanced and are now quite valuable there too. Global Upgrade Certificates are available as a Choice Benefit only for Delta Diamond elites. With these certificates, you can buy a highly discounted economy ticket and upgrade to lie-flat business class.
I need to update my “What is Delta elite status worth?” post, but as I think about the above factors I’ll probably land on something like the following valuations:
- Delta Silver Status: $200 (unchanged)
- Delta Gold Status Value: $200 (Silver) + $200 (incremental Gold benefits) = $400 (unchanged)
- Delta Platinum Status Value: $400 (Gold) + $400 (incremental Platinum benefits) = $800 (dropped value, prev $1,050)
- Delta Diamond Status Value:
$1,050$800 (Platinum) + $1,700 (incremental Diamond benefits) = $2,500 (dropped value due to drop in Platinum status value. Prev $2,750)
Is Delta Elite Status still worth pursuing?
Delta is the only major airline (that I know of) where it’s possible to earn top tier status through credit card spend alone. My wife and I have been earning top-tier Diamond status year after year in this way.
In the post, “Manufacturing Delta elite status in 2020 and beyond,” I concluded that manufacturing Delta Platinum or Diamond status was worth it (for me) even if it costs as much as 2% to “manufacture” the required spend. But it wasn’t a slam dunk. And, in that post, I estimated the value of Delta SkyMiles at 1.3 cents each. That won’t work anymore. I really need to go back and redo those estimates with SkyMiles pegged at 1 cent each. This is important because the Delta credit card spend required to earn elite status generates a huge number of miles. The value of the miles goes a long way towards justifying that spend.
I haven’t done my homework yet. I haven’t re-estimated the value of pursuing Delta elite status through spend. That’s a job for early next year. I have a feeling, though, that the mathematical answer will be different than before. This time the answer will most likely be that it’s not worth it.
To be continued
Delta has rolled over everyone’s status to next year anyway, so this topic isn’t too timely. It was on my mind because of the recent negative changes to SkyMiles value and positive changes to their Global Upgrade Certificates.
Next year I’ll do the work. I’ll estimate the value. My bet is that I’ll conclude that the answer is “no,” it’s not rational to pursue status. Then I’ll have a tough decision. Will I go with the numbers or continue to irrationally pursue status? Stay tuned.
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None of the airlines are of a good value. That’s why I value credit card rewards more than airline rewards and most hotel rewards. It depends on redemption, but holding the air rewards means high probability for devaluation.
Been playing Delta game for several years and half way to 2 million miler but I am like you, eventually Diamond won’t be worth it and with GC and the portals being dead for the time being it will be a pain next year. The bright side I bought 2 tickets for Brazil in Jan to end of February and called in and now in Delta one seats and tickets were $1100 each. Used GC I bought on raise then they had 20% off so I am happy with the outcome.
Airline loyalty isn’t worth pursuing these days. If you have to work at it (much) then it’s not worth it. It wasn’t always this way. I’m sure there are exceptions but this is true for most of us. It’s even more true for people who just chase status that wouldn’t typically earn it from business travel.
Also a big consideration is AMEX cutting from 5 to 4 credit cards one can possess (not counting how many one has before the recent change). So I have to balance between Hilton, Marriott and Delta plus a card I thought was a charge card that I love….AMEX Freedom Business Plus. It has the word credit in its name when I thought co-brands were the only credit cards. Thus Delta cards for the most part have to go.
They seemed to have devalued miles on own their metal also (at least domestically)
For the past few years, I regularly was getting 1.7 – 2.0 cpm in value (Economy) on the MIA/FLL – LGA/JFK route which I fly several times a year (pre-pandemic).
Now I’m getting 1.1 – 1.2 cpm. On that route no matter how far out I book.
No longer makes sense to use their cards for spend unless I was aiming for status.
Hi Greg, curious about your thoughts perhaps in a separate post (or I may have missed it) on United’s October partner award price increases. Which is technically a devaluation of the Chase UR ecosystem as well?
That is a good topic for another post!
Jumping back in the discussion….I am like many who have 7 figure SkyMiles accounts and 150K+ rollover MQMs. I certainly think my days of spending $250K on Delta cards are over. So your discussion has brought options to the forefront. I think the clear answer is that I am going to wait and see.
You have to consider the opportunity cost of spending $250k on DL cards or a 3% Discover, 2.625% BoA card, etc.
Absolutely. An
y justification that may have existed, exists no more. As an aside, it is extremely difficult to MS with a Discover card given there miserly CLs. They also implemented a change wherein they deny CL increases until the one year anniversary.
250k spend @2.625c = 6500$ minimum – if you can do that in Jan 2021 then you get 2 more years of DM lite status worth less and less
Until travel returns AND planes are packed full again – worth less and less or, simply, worthless in my opinion to put any more spend on DL cards.
Greg,
When COVID hit and the extended status, I quite putting any money on my delta amex and downgraded my reserve. With all the changes and my lack of travel, I don’t think I’ll manufacture platinum anymore even on 2021. I both need to start traveling more and Delta needs to restore some value to their miles to get me back. Otherwise, I just can’t justify the manufacturing opportunity costs for Delta.
You raise a good and timely question. Having been a Diamond member for 10 years (mostly through CC spend) I decided to stop pursuing it this year. One big factor is the inability to manufacture spend through GCM and Simon. Also, the larger annual fees on the DL Reserve cards.
Great point – who really wants to fly an airline whose travel cards are associated with a bank run by a RAT?
Clearly written by someone that’s never attempted to use GUC’s beyond standby from SEA to PEK
One of the more level-headed reviews of SkyMiles.
Got 100k BIS this year on Delta, but, looking more at foreign carriers for superior business class these days.
Been Plat for a number of years. Thinking it might be time to retire Delta Plat CC, and just focus spend on Chase/Amex cards.
Interesting times ahead!
As a million miler I’m Silver every year. When AMEX and Delta decided last January one would earn MQMs at spending levels and not miles, I contacted them both. Hey I start each year at 25,000 MQM but when I earn more they don’t add to my starting point of 25,000. So I decided then when my business Delta Platinum, Delta Platinum and Delta Reserve get to the 2 year point, I’m canceling. At this point I’m one down and two to go. I want more miles for spending as when you’re flying Delta One, what more perks are there?
Nice heads up Greg! I will be waiting for your follow up. I am also big on Delta and I use them for my Europe vacations on business. I am hoping they will backtrack on this damaging devaluation. Just unbelievable during these times??
In the original version of this post I wrote that Pay with Miles earns MQDs, but I meant to write MQMs. This has been fixed. You only earn MQDs on the portion paid with cash
I like my situation – I have around 3 million miles so lifetime Gold. Not great but avoid fees, can select seat and preboard (plus shot at upgrade even if not likely). No chasing status for me. I only have 100,000 or so miles left and use them on Delta’s frequent domestic mileage specials where I typically get much more than published value.
Everyone isn’t after business class seats to Europe or Asia. Most use miles for domestic travel and there are ways to get value there. When I want business class to Europe if I’m not getting at least 2 cent a mile I just pay for the ticket.
As for elite status overall also lifetime platinum on AA and either lifetime status in hotels (Marriott Titanium) or have top/next to top status via credit cards or matches. Bottom line is I am no longer chasing anything and can pick who I want to fly and where I want to stay which is great!
I think the whole business class thing is just one point an example of how the changes are affecting everyone. Overall, miles are worth less, and no matter how you slice it, everyone gets a lower return, even on miles that they already had earned, and for this reason, it may just be better to use the miles sooner than later, because they’ll probably get devalued again.