Uh Oh: Delta Introduces Basic Economy Award Tickets

Over the past few years we’ve seen basic economy fares expanded greatly at the “big three” US carriers.

Airlines market these as being lower fares that enable them to compete with ultra low cost carriers, though in reality they’ve used these to try and get people to pay more for the same product they received before.

Delta was the first of the major US airlines to introduce basic economy, and they did so back in 2012. Delta has been the least punitive of the “big three” US carriers when it comes to basic economy. American and United added basic economy in early 2017, and have done everything they can to make the fares unpleasant (though American decided to roll back some of those changes).

One thing that I’ve appreciated is that airlines haven’t brought basic economy to award tickets. I figured it was only a matter of time until it happened… and that time is now.

Delta is now selling basic economy award tickets. As of now this is only on select routes, though I imagine they’re just slowly implementing this, and it will eventually be widespread.

For example, take the below flights from Pittsburgh to Charleston via Atlanta, where basic economy costs 20,500 miles, and economy costs 23,000 miles.

So they’re charging an extra 2,500 miles to book a non-basic award ticket. If you book the basic economy award ticket, you will only be assigned seats at check-in, and ticket changes and upgrades are not allowed.

It’s not surprising to see Delta be the first US carrier to introduce this, given that:

  • They’re typically the “innovator” among the big three
  • They don’t have an award chart, and that their award pricing is dynamic, which makes it easy for them to implement something like this

Delta seems to peg the value of a SkyMile somewhere around one cent.

On a paid ticket for the above itinerary, regular economy would be about $30 more than basic economy, so the 2,500 mile premium more or less makes sense (though I guess it should be a bit higher).

So while Delta will have the easiest time implementing this, I’d be willing to bet that eventually American and United will also introduce basic economy awards. Maybe we’ll see those introduced the same time as premium economy awards.

What do you make of Delta introducing basic economy award tickets? Do you think American and United will follow?

(Tip of the hat to FlyerTalk)

Comments

  1. United already has some Premium Plus economy awards available. I’m gojngbfrom DC to Tel Aviv in June and on the nonstop dc-tlv flights premium plus is an available award redemption. 150k one way. Versus 180 for business and 62.5 k for cos h.

  2. It’s innovations such as these which make Delta the favorite US airline loyalty program among TPG readers.

  3. It’s like the DL staff sits in an office and thinks of ways to screw customers! Once they come up with it…all the other follow suit! It’s getting ridiculous.

  4. Could anyone explain why anyone would bother with Delta awards? When I started looking into this game they were consistently the worst rates of redemption except for their flash sales which are unpredictable. And the international routes are absurd. I just looked up the above mentioned flight and AA is 12,500 points and United is 10,000 points where Delta is 23,000 points. Now, on this particular flight since it is soon there are admittedly the close in booking fees on United and AA which could make a difference in this case but if you are farther out it makes no sense. And international routes are insane and often 250K for a one way business award. I’m truly curious if there are things about the program that make it worthwhile if you don’t fly enough to get status etc.

  5. @Tom,

    You can sometimes find reasonable saver pricing on international flights, especially on partner airlines. And Delta miles are often good for domestic flights. My most recent redemption was JFK-CLT non-stop for 6,500 miles. Granted, my redemptions are few and far between 🙂

  6. Some of us have to fly delta since we actually travel for business and it’s the best or cheapest options. You know the ones not scamming miles from credit cards

  7. With all the smack talk about AA, it’s changes like these with Delta that still don’t make me switch. I haven’t had the catastrophic meltdowns many of you discuss with AA, but at least I can save up miles for a redemption on CX F or JL F. Delta does this and makes their values even less valuable. Not to mention no changes within 72 hours. I will continue to ‘endure’ AA if it means I can get great value out of miles for my one or two big trips a year. Delta will get you nowhere.

  8. “Do you think American and United will follow?”

    Sounds like a “No sh*t, Sherlock” question to me.

  9. @Tom The only time I use Skypesos is when flying to Toronto to visit my family. Flights to Canada are way cheaper with miles for some reason.

  10. Delta is pretty much the “major carrier” at my airport, so I do have a Skymiles Amex and book award tickets occasionally. I’m okay with Basic Economy award tickets. If I got stuck in a middle seat but scored a great deal on my flight, it’s not the end of the world. 🙂 I probably wouldn’t book Basic Economy for an international flight though, unless it was just too cheap to pass up!

  11. What I’d really like to know is…who is the “basic economy” demographic? And is that demo points-rich? Because, if so, then hasn’t this point-and-miles culture helped breed this sad development. Isn’t someone out there saying “wow, I just got enough points from that credit card signup bonus for three basic economy tickets!”?

  12. “Do you think American and United will follow?”

    Does a bear poop in the woods? The only question is whether they will “enhance” the award chart by introducing a new tier for regular Y, or if they’ll offer a discount off the existing rate. My money’s on the former.

    @Tom – if you book in advance you can find some decent values on domestic redemptions, particularly in Comfort+. I’ve gotten about $.02/point value on these. Not great, but not a horrible option if you need, say, a one-way positioning flight for a larger award redemption on another airline.

  13. “Do you think American and United will follow?”

    LOL!!!!!! If Delta jumps of a cliff AA and UA will follow. They are wimpy airlines that never take the lead in anything and only exist to follow what Delta does for the good or the bad.

  14. TravelinDandy – the “basic economy” demographic is simply those that need to get to point A from point B at the lowest cost, and may have the excess miles to do so.

    I’ve made a few Delta redemptions in economy recently, largely for holiday flights. As a Silver, I have been upgraded to first on these redemptions. I got around 1.5 cents per mile for relatively low total redemption costs. I try to keep around 160,000 skymiles and MR points available at all times just in case a 80,000 point redemption to Europe pops up.

  15. I wonder if this will affect partner redemptions for those of us sitting on mountains of Virgin Atlantic miles.

  16. Sigh. Another devaluation masquerading as a feature. I pretty much only use Skypesos for international partner J awards – just booked China Airlines TPE to NYC for 85,000 + $33. On the other hand, I wanted to go to Iceland (a < 6h flight from NYC) the other day and Delta wanted 330,000 for a one way on their metal.

  17. I’m not sure I understand the effect that these have on the consumer. Can someone explain this? I assume that it sets a limit on how “low” the awards will go, no? For example, I can only assume that those 10k skymile flash sales will apply to the BE tickets now and not to the regular economy, right?

  18. Do airlines actually fill all their Basic Economy seats? It seems to me that if they discomfort-threaten everybody to buy “up” to better seats, then that must leave the Discomfort Class largely empty sometimes, at least on very long flights. Do they ultimately make money with this sleight-of-hand?

  19. Personally, I think there are just too many ways to get miles, thus decreasing the “award seat” availability.

  20. 50 years ago I flew Delta exclusively round-trip home to college;back when flying was enjoyable. Recently flew Delta round-trip to Europe. WORST EXPERIENCE EVER!! ONE MONTH CRUISE WITH NO LUGGAGE. They “gave us Skymiles but not much else. They can put their Skymiles where the sun don’t shine! I WILL NEVER FLY DELTA AGAIN!!

  21. This will be harder for AA or UA to implement if they maintain award charts. They’d either have to actually increase award rates for saver Y (much like has been done with paid Y fares) or introduce a lower basic Y award chart.

    The real bait and switch with the 3 legacy carriers is that we now earn most miles in a revenue-based model, but don’t redeem in a revenue-based model. Since WN and B6 have a fixed dollar to points redemption model, you can often get insanely cheap award fares tracking low fares. I’ve flown from FLL to HAV for less than 2,000 points on B6 and can often get from DEN to JFK for less than 7,000 points one-way. UA or AA would charge me 12,500, while with DL it is a shot in the dark.

    It will be interesting to see if basic Y award flights catch on. The reason that basic Y cash fares have been a huge success is that the airlines are going after the most price sensitive consumer, and effectively completing against F9 and NK. I wonder if DL will discover that those redeeming awards are less price sensitive?

  22. AlanD – Delta is somewhat close to a revenue based redemption model. You often see redemptions for under 10,000 miles for flights that are $125-$150.

  23. Airlines should just do away all together with the frequent flier programs. Ever think about that.
    Appreciate the generosity you’re getting with unlimited upgrades, free baggage, etc.
    Yes, loyalty is recognized and appreciated, but many of you now expect so much all the time. It seems as there is no appreciation for the nice perks the legacy carriers provide. It also seems as many feel that they are just entitled to everything. The airline and hotel hospitality industry are quite generous with rewarding there best customers. but after seeing these posts, it seems as it is never enough. Must be the feeling of entitlement of the millennial generation. And for those whose tickets are paid for out of their own pocket, thank you!, My post is more so directed to those who whine while their company is paying the cost.
    Yes, I work for an airline.

  24. The reason Delta keeps expanding on the basic economy fares is because people keep buying them. Nobody is forcing you to buy that lowest price fare, you still have the option for the good ol’ main cabin. Consumers are demanding the product, such is why Delta is bringing it out. I, personally, wouldn’t book it. But for some people that $30 each way is more important than picking their seat.

  25. Delta is the worst airlines they pick and choice what they want to do! Not to say they lie and steal from customers especially from luggage’s… be aware of this company I will never fly with them ever.

  26. Anthony (not sure if there are 2 of you, or one guy who wrote twice),

    Good call on MR + Sky Miles. Here in DTW, I try to do the same thing, using the Delta co-brand AmEx and the Gold or Plat AmEx cards. And your redemption rates are similar to what I’ve experienced, either an actual redemption, or investigating a spend/redemption. My most recent redemption of Sky Miles RT DTW to BCN (~5 months in advance) was around $0.02 in Delta One. Looking at 2015 era award charts, those seats/route were 125,000 RT…now, 172k. To me, it was a “what else can i do with these things?” decision. To some, that cost in Sky Miles was too great. To others, it would be earn and burn. YMMV

  27. @MT Basic Economy is simply a fare class. The seat is exactly the same as the Main fare class. Plus the complaints most people have can be avoided by having an airline card. I buy BE tickets all the time.

  28. Are these really “lower” fares or just a marketing ploy to charge more? On Singapore airlines, their “basic economy” fares are just the same as their standard economy fares were before they introduced this tier.

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