Delta's not-too-popular variable award pricing model is now being used to price out tickets on Virgin Atlantic. That may not bode well for the future of using SkyMiles within Delta's larger SkyTeam network.
Update: Delta Air Lines reached out after we published this story to concede that pricing on its Virgin Atlantic awards had been glitchy this weekend and that the inconsistencies seen were not a function of variable pricing. Delta had no comment on whether variable pricing is planned for Delta partner awards.
The original post follows:
Delta Air Lines, long a leader in loyalty program innovation, may be experimenting with a new way of pricing its partner award tickets.
For the last year, the airline has been using a variable model to price award tickets on Delta-operated flights, ratcheting the number of miles needed for a trip up or down based on demand. Now, the carrier seems to be applying to the same model to its partner Virgin Atlantic.
Variable award pricing is a relatively new concept for the big three air carriers of American, Delta, and United. Traditionally, airline loyalty programs have priced tickets based on geography and inventory — 25,000 miles for a domestic round trip ticket in economy, for example, or 50,000 miles if inventory is lean.
Recently, however, Delta has stepped back from that model to price tickets dynamically based on route demand and current inventory. And in many ways, that model has worked well for customers — just this past weekend, the airline put award tickets from Haneda, Japan to Minneapolis, Minnesota on sale for 50,000 miles each way, a 10,000 mile savings over other carriers (in fairness, Delta is also trying to aggressively market this new route).
On many other occasions, that dynamic pricing hasn’t favored the frugal traveler — particularly across business class fares.
The wide range of potential prices and the lack of transparency into how much an award ticket on Delta should cost has been a sore spot for many of the airline’s loyalists over the last year, as each traveler tries to figure out how to allocate spend.
Until now, that frustration has been limited only to Delta-operated flights — but news this week seems to indicate that variable pricing has seeped into Virgin Atlantic tickets booked with Delta award miles. The blog One Mile at a Time illustrated it well, showing that sample itineraries in business class from New York to London returned ticket costs ranging from 62,500 to 87,500 miles.
So far Virgin Atlantic appears to be the only partner on which this pricing model is applied. Should the model find traction, however, members of Delta’s SkyMiles loyalty program may have variable pricing to look forward to across all of Delta’s SkyTeam partners including twenty other carriers around the globe.
Photo credit: Aircraft models following Delta Air Lines taking a stake in Virgin Atlantic. Delta is extending its pricing strategies to the London-based carrier. Brendan McDermid / Reuters