Two years ago, after collecting data and crunching numbers, I determined that Delta SkyMiles were worth an average of 1.2 cents per mile towards domestic flights. Now, I’ve collected new data, crunched the new numbers, and found that the value has inched up to 1.3 cents per mile for non-cardholders, and has jumped all the way to 1.5 cents per mile for those with Delta Gold, Platinum, and Reserve cards thanks to the new TakeOff 15 award discount for those cardholders.
At Frequent Miler, we keep a database of point valuations (we call these “Reasonable Redemption Values“). These are point estimates of airline miles, hotel points, transferable points, and more. The idea is that we try to identify the value at which it is “reasonable” to get that much value or more from your points. This information is critical for making informed decisions. In fact, it’s a key component of the First Year Value information shown on our Best Credit Card Offers page, and it’s similarly used to show which cards offer the best value for everyday spend, and which offer the best category bonuses.
Reasonable Redemption Value Process
Most airline miles are redeemed in the United States for domestic flights. To identify the value of redeeming miles for domestic flights, I put together a list of 8 of the busiest airports (or airport markets) in the United States which are also spread out geographically across the lower 48 states. The airports and airport markets I selected are:
- New York Metro Area (NYC)
- Washington DC Metro Area (WAS)
- Atlanta (ATL)
- Los Angeles (LAX)
- Chicago Metro Area (CHI)
- Dallas Fort Worth (DFW)
- Denver (DEN)
- Seattle (SEA)
I then setup a list of airport pairs so that one-way flights between every airport (or metro area) listed above were accounted for. This resulted in a list of 28 airport pairs.
For each of the 28 airport pairs, I identified a one-way flight and recorded both the cash price and the mile price (plus fees). Here is the process for picking a flight departure date:
Departure date: Look 3 months from today’s date and find the closest Wednesday. For example, if it is currently February 9, 2023 when collecting data, then look forward to May 9 and find the Wednesday closest to that date (May 10, 2023).
For any given airport pairing and date, there are usually many flight options. In order to identify a specific flight for each airport pair, I came up with a scenario to try to make a realistic real world choice. The idea is that the person booking the flight doesn’t want to have to get up too early in the morning, prefers nonstop flights, wants an actual seat assignment in advance, and would like to arrive before 5:30pm in order to make it to a late dinner. So, I used these rules as a guideline:
- No flights before 7:30 am (6:30 from west coast flying east)
- Arrive no later than 5:30pm
- No more than 1 stop (prefer nonstop)
- Prefer cheapest flight
- Prefer shortest connection
- Never pick basic economy
- No preference for particular airport in a metro area (this last rule was the least realistic, but useful for collecting the data quickly)
Calculations
For each flight, I recorded the following pieces of information:
- Cash price
- Cash ticket miles earned (Non-elite members earn 5 miles per dollar)
- Award miles required (I collected both the miles required without a discount and with the 15% off cardmember discount)
- Award fees ($5.60 TSA fee)
With the above, I calculated the Cents Per Mile (CPM) value of Delta miles, as follows:
- CPM = 100 x (Cash price – Award fees) / (Award miles required + Cash ticket miles earned)
By including the cash ticket miles earned in the above formula, we calculate a more conservative value for our miles. The idea is to account for the fact that when you book an award ticket you give up earning miles from that flight and so the cost in miles to you is both the award cost plus the miles not earned from a cash flight.
Findings
I calculated the CPM, as described above, for all 28 flights via Delta.com. Here are the results:
| 2/9/23 Analysis 15% Discount |
2/9/23 Analysis No Discount |
3/16/21 Analysis | |
|---|---|---|---|
| Median CPM | 1.5 | 1.3 | 1.2 |
| Minimum CPM | 0.7 | 0.6 | 1.0 |
| Maximum CPM | 1.7 | 1.4 | 1.7 |
Since the 2021 analysis, the undiscounted median CPM inched up from 1.2 to 1.3, but the minimum and maximums both went down. So, even though the average CPM is slightly better today, in 2021 we seemingly had less chance of getting badly burned (with an 0.6 CPM) and a better chance of getting outsized value (1.7).
The discounted median CPM of 1.5 is obviously a big improvement from what we had before.
Conclusion
The exercise described above resulted in a new Reasonable Redemption Value (RRV) for Delta miles. Where we previously pegged Delta miles as being worth 1.2 cents each, we now list Delta miles as being worth 1.3 cents each. I consider that an extremely conservative estimate since it doesn’t take into account the 15% off discount now available to cardmembers.
Please keep in mind that this does not mean that you will always get 1.3 cents per mile value from your Delta miles. Most likely, if you’re not a cardholder, you’ll sometimes find better than 1.3 cents per mile value and sometimes you’ll find worse. And if you are a cardholder, you’ll sometimes find better than 1.5 cents per mile value and sometimes worse. And that’s specifically with domestic flights when no award flash sales are going on. There are a number of ways to get better value from Delta miles. For details, see: Best uses for Delta miles.
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Just curious, I noticed that the minimum CPM was listed as 1.0 here, whereas for UA and AA you list minimums below 1.0. Are you giving Delta the benefit of the “Pay With Miles” perk?
Also, sorry but did you calculate the CPM mean as well?
No, Delta’s numbers are completely based on observed values. The lowest CPM for Delta was 0.977, but since I rounded everything to one decimal place, it rounded up to 1.0.
Yes, I calculated means as well:
It’s kind of interesting that AA and United swap spots when looking at the mean vs median
Thank you!
Can’t wait to write the program to automate this for you! 😀
That would be awesome. When doing the above for AA, I found that AA’s award prices seem to be less tied to cash prices than Delta or United. As a result, I think that AA’s valuation is going to vary as cash prices go up and down (for example, prices are down now due to the pandemic, but might surge up if there’s a lot of flying once things open up more). When cash prices go up, I expect AA awards to look better in comparison. With Delta and United, though, they’ll just automatically raise their award prices to match.
@ Greg — I think you have a typo above “I calculated the CPM, as described above, for all 28 flights via United.com”. I think you meant delta.com…
Whoops! Fixed. Thanks
How much do you figure they are worth on the ATL to PTY route round trip in Comfort+ for 11k? Im thinking something like 3.4 cents. There might not be a better deal than that.
That is a great redemption.
I just got back from HNL last night, on one of the flash sales that recently popped up for 17k RT in main cabin. I think the actual CPM was about 2.5 when I bought. They were flying an A330 from SEA-HNL and I got upgraded both ways. Spending 17k Skymiles and getting 12 hours in a lie flat seat was one of my best miles/points redemptions, no matter what the actual CPM was.
Did you also compare First class options on those routes? I would think that I am the only one who frequently purchases First class seats.
No I didn’t look at first class
I don’t think you’re the only one who frequently purchases First. 😀
Except when flying Southwest, my wife and I always fly first class, primarily because she has some mobility issues.
I agree with the valuation and your assessment. I do notice there better redemption values that require either more than one connection and/or very early departure times.
Great analysis, Greg! Thanks for doing this.
What I would really like to see is the average value for flights to various airports in Europe from U.S. cities.
P.S. I’m on the west coast, and I would gladly pay more to avoid catching a flight so early as your 6:30am. Lol! I’m more the 9 or 10am kind!
I can understand that! But thanks to the time zone, if you want to make it to a dinner date on the east coast (as in the scenario I was going with) you’re going to have to get to the airport early!
I suppose it beats moving to the Blizzard Belt. Lol!
I only recently discovered your site over the past few months, but work like this example is why I check in daily. As a rookie to the pt/mi game, I appreciate your work more than you know. Thank you!
Now you need to script this and run monthly, save in a database/csv, and chart on the return 🙂
I hope to do so eventually, but for now there are too many judgment calls regarding which is the best flight and those would be hard to code!
Time for a Frequent Miler intern!
haha – great idea
I use the 1.2 cent as the lowest award value I will use points. Points are a “currency” and if you always think that way, then IMO best bang for the buck. Exception if like a friend of mine, more points than he will ever use, then that’s different. Another view I have is domestic vs international. Generally domestic will have to be a tremendous value before I use points. FYI recently cancelled because of COVID an international Delta One trip for two. I had multi-city Amsterdam return Zurich for 190,000 points each or about 1.8 cent award value. To me that’s great. Probably cost me at least 210,000 or more to repeat in 2022.
Totally off subject, anybody know when LA will open up? Ready to do a DFW-MIA-LAX-DFW, but can’t get into California with staying 10 days with a thermometer in my anywhere (China version probably). Had both shots too. Geez!
The 10 day self-quarantine is not mandatory, but “encouraged” per CA’s state tourism website. Since you are vaccinated, I wouldn’t be too concerned about it, as long as you are compliant with mask-wearing and social-distancing requirements. On other words, if you act respectful of the local rules, no one is going ask you if you are complying with an arbitrary quarantine.
Awesome deep dive. Great valuation and calculations- seems very fair. Keep up these assessments!
A probably good methodology to calculate domestic flight value. For international flights, you need to compare one-way awards to half of a return ticket as the one-way prices are very high.
Note, AwardWallet made such calculation but their valuation seems highly inflated (probably due to comparing one-way prices.
Good point! We’re discussing creating secondary metrics such as expected CPM towards international business class flights. If/when we do that, I’ll definitely keep in mind the need to look at round-trip cash prices.
Holly molly Greg, you must have a lot of time on your hands to be able to put this together. It is so great that you spend hours on this stuff so we don’t have to.
Full kudos to Greg for his work here. But you do know — this is his job?
Could you clarify whether your set of reference flights covers all airlines offering the trip vs. just the airline under calculation?
I’m generally agnostic on which airline I use for a cash trip. For example, let’s say a flight search showed airlines X, Y and Z offered flights that met my needs. I hold miles only with airline Z. My points value calculation for that particular booking would be the lowest price offered among X, Y and Z divided by the cost in miles on airline Z.
Great question. I decided to look only at Delta flights for calculating the value of Delta miles. There are legitimate arguments for doing it either way, but ultimately I decided that comparing apples to apples was the way I wanted to go with this.
Fair enough. Your primary objective is data suitable for broad but consistent comparisons. Mine is finding a fair-to-excellent redemption value for a particular trip.
An idea for a future post, after you refine your process and recalculate across all the airlines you track: a how-to showing how a reader might spend an afternoon drilling down to average values across several airlines for round trips originating a particular home city. I think the results might be different for a busy, competitive hub vs. a smaller market with only a two or three airlines.
I humbly offer Houston as an excellent example for the competitive, two-airport calculation. 🙂
These analyses are great. But I do tend towards Htown Harry’s way of thinking — the value of the points reflect what I would actually have paid for the good or service. So I would tend to think of them in terms of the cheapest flight I would otherwise have paid for rather than the cash cost of the seat my actual butt is in.
This is also true in hotel valuations. Sure, I could get a great on-paper redemption value for a room that would have cost $750 on that particular night but if I would have otherwise stayed in a $200 room elsewhere I’d base my redemption value on something closer to the $200. If the $750 room is “better” than the $200 room I might kick-in some value ($100, maybe?) to reflect the novelty of getting to try it out. (All this said, yeah, yeah — I did Hyatt Globalist and will be looking for some suite on-paper redemptions myself!)
It just shows that redemption values are subjective in some ways and that objective methodologies may overstate the value to most people.
Which leads to the first thought I have when I see these posts:
“What is a reasonable redemption value?” and “what are my miles worth?” are completely different. You obviously shouldn’t pay 1.2 cpp for Delta miles if that’s what you think you can redeem them for. You should pay much less. Lots of factors determine how much miles are worth to you (elite status, travel habits, current miles balances, financial situation, risk of deval or bankruptcy, risk of personal life change, etc). But the true “worth” of the miles is always less than RRV.
Bottom line, RRV is useful only when deciding whether or not to use points in a given situation, but is not very useful for deciding whether to acquire more.