News that Delta is raising the price of its low-level Business Elite rewards was met with some angst yesterday on the boards. Delta’s representative posted the following on FlyerTalk.
“Today we will make updates to delta.com in two content areas that you’ll be interested in, so we’re posting here as a heads up.
BusinessElite® low mileage redemption:
Many of you have experienced first hand our significant investments in products over the past several years. In June 2014, we will be the only U.S. carrier to offer full flat-bed seats with direct aisle access in Business Class across our entire wide-body fleet. Our premium cabins will also soon offer new, on-demand in-flight entertainment options and we are in the process of adding in-flight Wi-Fi on our long-haul international aircraft scheduled to be complete by 2015. We’ve also partnered with premium brands Westin and Tumi on new bedding and amenity kits and we’re introducing new dining options.
As a result, we’ve recognized the need for adjustments to our low mileage redemption levels for select international Award Tickets in BusinessElite. The mileage redemption adjustments are effective today for Award Travel on or after June 1, 2014. Please check our Award charts for updated mileage levels later today.
Award Hold policy change
We will continue to offer our 24-hour Risk-free Cancellation option for Award Tickets, but will discontinue our Award Ticket hold option. More than one million Award Seats per year are held by members who don’t use them which negatively impacts other members’ Award Seat access. The new policy will be effective for Award Ticket reservations made on or after September 9, 2013, and at that time, Award Seats may no longer be held without ticketing.
We’ll be checking back periodically for your comments or clarifications if something isn’t clear.”
I posted a question on the FlyerTalk thread asking if anyone remembered when Delta last raised their award prices for BE. One member responded that they believed it was around 2004. Assuming that’s true, and it seems about right, that means Delta has not raised award prices in approximately 9 years. Considering that, the award pricing adjustment does not seem out of line to me. I would opine that the rest of the industry will follow. Whether the blurb about needing to do this because they’ve made such great investments in their BE product is the real deal or not is up to you to decide. While there is a modicum of truth in being able to charge more for a better product, the whole truth is that SkyMiles went revenue based way back when the three tier award chart was introduced, and that’s the what most of this is about. Again, 125K for a Business Elite redemption to Europe seems fine to me, assuming you can find the inventory.
The more troubling change that was announced is the removal of the ability to place an award reservation on hold. If Delta’s online award booking “apparatus” worked as well as everyone else’s, and included a large number of parter airlines, I’d be less of a mind to gripe about this. Fortunately, 24 Hour Risk Free Cancellation continues.
In summary, Delta’s repricing of Business Elite awards effective June 1, 2014, is not out of line in my opinion. I wouldn’t be surprised if the rest of the industry follows soon. I am a little surprised they didn’t go ahead and bite the bullet on the 25K domestic coach award to be honest. Perhaps that number has become so ingrained in the national psyche from all the advertising that it gets that it seems untouchable, for now? Why they can’t throw us a bone with one-way awards is beyond me, but that’s a subject for another post. The bigger question is when are we going to see SkyMiles 2.0?
-MJ, August 15, 2013