What are Delta miles worth? (towards domestic economy flights)

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I’ve developed a new process for determining the reasonable redemption value of airline miles.  Delta was my test subject for this process.  The idea is that we’ll expand this process to many other airlines and also repeat the processes regularly so that we can keep track of values over time.  For this initial exercise, I found that Delta miles are worth 1.2 cents each, on average, towards domestic U.S. flights.  Interestingly, I also found that there’s considerable variation in value depending upon which airports you fly from or to.

Update: Please also see:

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.

Image courtesy of Great Circle Mapper. Shown above are the airline markets used to estimate airline mile reasonable redemption values.

Reasonable Redemption Value Process for Airline Miles

I consider the following a work-in-progress.  This is what I did so far…

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 was 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).  Since we’ll be collecting data at different times for different airlines, I made up a 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 March 17 2021 when collecting data, then look forward to June 17 and find the Wednesday closest to that date (June 16, 2021).

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:

  1. No flights before 7:30 am (6:30 from west coast flying east)
  2. Arrive no later than 5:30pm
  3. No more than 1 stop (prefer nonstop)
  4. Prefer cheapest flight
  5. Prefer shortest connection
  6. Never pick basic economy
  7. No preference for particular airport in a metro area (this last rule was the least realistic, but useful for collecting the data quickly)

In a few cases, the best option slightly broke the rules, but I picked that option anyway based on the idea that most people would do the same.  For example, in one case I chose a flight that arrived at 6:09pm because it was significantly cheaper than the next best option ($176 vs. $268).

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
  • 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:

  • Median CPM: 1.2
  • Minimum CPM: 1.0
  • Maximum CPM: 1.7

Interestingly, the median CPM varied quite a bit by airport.  By looking only at flights that started or ended in a given airport or metro area, I found that you’ll either average 1.1 cents per mile or 1.3 cents per mile. None of the individual regions were at the 1.2 value that I calculated overall:

  • New York Metro Area (NYC) = 1.3
  • Washington DC Metro Area (WAS) = 1.3
  • Atlanta (ATL) = 1.1
  • Los Angeles (LAX) = 1.1
  • Chicago Metro Area (CHI) = 1.3
  • Dallas Fort Worth (DFW) = 1.3
  • Denver (DEN) = 1.1
  • Seattle (SEA) = 1.3

Compared to the old way

Previously, I calculated the Reasonable Redemption Value (RRV) of Delta miles (and many other airline miles) to be worth 1.3 miles per dollar by looking up the average round trip price for flights in the U.S. and assuming that the award ticket price was 25,000 miles round-trip (most airline programs used to charge 25K round-trip standard).  I calculated the RRV first without accounting for the loss of earned miles and then subtracted 7% from the final result, like this:

  • RRV = ($361 – $11) / 25,000 miles
  • RRV = (36,100 cents – 1,100 cents) / 25,000 miles
  • RRV = 1.4 cents per mile
  • RRV Adusted = 1.4 – (7% of 1.4) = 1.3

What would happen if we used the above formula with new information about flight prices?  In my new dataset, the average one-way cash price was $162 and so we can assume that the average round-trip would be 2 x $162 = $324.  Then:

  • RRV = ($324 – $11) / 25,000 miles
  • RRV = (32,400 cents – 1,100 cents) / 25,000 miles
  • RRV = 1.25 cents per mile
  • RRV Adusted = 1.25 – (7% of 1.25) = 1.16 which rounds up to 1.2

The above calculation doesn’t make much sense anymore because Delta has long since abandoned the standard 25K round trip award price, but it’s funny that the final answer is the same: 1.2.

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 1.3 cents each, we now list miles as being worth 1.2 cents each.

Please keep in mind that this does not mean that you will get 1.2 cents per mile value from your Delta miles.  Most likely, you’ll sometimes find better than 1.2 cents per mile value and sometimes you’ll find 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.

My goal is to calculate RRVs for most popular airline and hotel programs, and to update the values regularly.  Eventually I’d like to automate the processes described above, but for now I consider this a work in progress and so a manual process makes sense.  I expect that when I tackle other programs I’ll find that I need to alter the process a bit.  Once we have a single process that works across multiple programs we can then automate it and update values more often.

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33 Comments
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Aloha808

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?

Aloha808

Thank you!

veeRob

Can’t wait to write the program to automate this for you! 😀

Gene

@ 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…

Anthony

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.

NK3

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.

Greg

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.

anonymous

I don’t think you’re the only one who frequently purchases First. 😀

jerry

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.

anonymous

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!

anonymous

I suppose it beats moving to the Blizzard Belt. Lol!

SC Thomas

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!

Josh

Now you need to script this and run monthly, save in a database/csv, and chart on the return 🙂

Matthew

Time for a Frequent Miler intern!

Josh

haha – great idea

Harry

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!

Gene

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.

Michael NJ

Awesome deep dive. Great valuation and calculations- seems very fair. Keep up these assessments!

Ben

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.

gregory diamond

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.

LarryInNYC

Full kudos to Greg for his work here. But you do know — this is his job?

Htown Harry

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.

Htown Harry

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. 🙂

LarryInNYC

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.

WR2

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.