Home Airlines Delta’s SkyMiles Math Is Impossible to Understand

Delta’s SkyMiles Math Is Impossible to Understand

by joeheg

If you’ve read my posts for any length of time, you’ll know I’m quite a fan of math. In fact, math has saved me on more than one occasion. For instance, I had to prove that it was impossible my rental car had a full tank of gas when I left and only had 1/2 tank left when I returned it if I only drove 50 milesMy mathematical nature causes me to hate shopping for airfare. The differences in prices between flights and times and how fast they change drives me insane.

Wanting to drive myself crazy on a Sunday night, I took a dive into how Delta Airlines’ prices for award redemptions correlates (or doesn’t), with the cash price of a flight.

People love to hate Delta SkyMiles because the airline seemingly makes up award prices for flights out of thin air. There’s no formula like you’ll find in the fixed mileage programs of JetBlue or Southwest. There’s also no fixed award chart like other airlines offer. Delta’s system prices a flight however it wants, somewhat independently of the same ticket’s cash price.

I wouldn’t normally subject myself to this torture but I am looking for a flight from SFO-MCO and Delta is the best option right now given our preferred flight times.

Example 1

SFO – DTW – MCO

The cheapest option to get home from San Francisco is on a connecting flight through Detroit. It’s not my first choice because there’s not another flight after ours if we miss a connection for any reason. Here are the cash prices for the flight.

And here are the prices using Delta SkyMiles for the same seats. Note that this is the least expensive option for the flights we need using miles.

  • Main Cabin – $288.20 or 22,000 SkyMiles +$5.60. (1.28 cpp)
  • Comfort+ – $378.20 or 29,500 SkyMiles + 5.60. (1.26 cpp)
  • First – $668.20 or 74,000 SkyMiles +$5.60. (0.89 cpp)

For this flight, Main Cabin and Comfort+ price about the same but it’s a much worse deal to book First with miles.

Example 2

Trying to make sense of the situation. We’re just getting started. My preferred booking would be through Atlanta on the earlier flight. That way, if we miss our connection, we might be able to get on the later flight and not spend the evening in ATL. Here are the cash prices for the two flights:

 

And the prices using SkyMiles:

For the later connection, here’s the breakdown:

  • Main Cabin – I’d pay the same $288.20 but the award price goes up to 25,000. (1.13 cpp)
  • Comfort+ – Again the cash price is the same at $378 but an award costs 32,500 (1.14 cpp)
  • First – The cash price rockets to $1279.20 and award space costs 110,000 (1.15 cpp)

Incredibly, all of the awards on this flight converge on the 1.13-1.15 cpp range.

What about the flight I want to take with an hour shorter connection in ATL?

  • Main Cabin – Cash price goes up to $322.20 but miles required only increases to 25,500 (1.24 cpp)
  • Confort+ – Cash price increases to $412.20 but miles only goes up 500 to 33,000 (1.23 cpp)
  • First – Cash and award space stay the same $1279.70 and 110,000 (1.15 cpp)

The best value for points is for the more expensive flights because the miles required aren’t much more than the flight with the longer connection (and the last flight of the night)

Final Thoughts

If you’re stuck having to pick between these flights, your best value comes from booking Main Cabin or Comfort+ on the flights through DTW or the more expensive, but preferable flight through ATL. Your worst value is booking on Delta First with miles for any of the flights. If you have a Delta co-brand AMEX card you’d be better off using the pay with miles option and getting 1 cent per point value than the redemptions Delta’s offering paying with SkyMiles. You’d also earn SkyMiles for your flight.

So what did we learn? That Delta SkyMiles are worth 1.23 cents each or 1.14 cents each or 0.89 cpp. I guess that means if you’re getting anything more than 1 cent per point for your SkyMiles, you’re doing OK. Sure, there’s outsized value with some partners but I wouldn’t earn SkyMiles looking to redeem them for any more than that.

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This post first appeared on Your Mileage May Vary

2 comments

Christian March 23, 2021 - 1:44 am

110,000 miles for a flight within the lower 48 states? For one person? That’s a pretty good illustration to me of just how insanely worthless Skymiles really are. I’m no fan of Delta as an airline in general but prices like these show an impressive amount of contempt for loyal members. I’m glad I ditched them.

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disdadisdisdis March 23, 2021 - 5:01 am

I think the morale of the story is a different one.

Back in the day, the value you could get out of Delta redemptions varied because there was a fixed award chart but cash prices fluctuated.

Nowadays, both award prices and cash prices fluctuate. However, these prices aren’t correlated perfectly as your exercise demonstrates. Why is that? Because Delta has figured out that award seats and cash seats are not perfectly exchangable in the eyes of the customer.

For instance, MCO is a popular destination for redemptions. Especially over holidays and for premium cabin, Delta can sometimes get away with making redemption rates quite high. Because some people won’t even both looking at cash prices closely. They might say: “Now I’ve worked and accumulated so and many miles, now I want to travel for free–perhaps even in premium cabin.” They might not be very sensitive to the redemption rate at all.

Bottom line: Revenue management has been applied to cash tickets for decades to maximize airline revenue. Airlines have now figured they can apply revenue managment techniques to award pricing as well. This gives them more room to make money from their Skymiles programme than through award inventory management alone.

All Delta guarantees a Skymiles member nowadays is a floor value of around one half a cent per mile. (This is presumably so people stick to the programme and not conclude that miles earned are essentially worthless.)

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