[HN Gopher] Things Delta told the SEC about its SkyMiles program
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Things Delta told the SEC about its SkyMiles program
Author : donohoe
Score : 106 points
Date : 2022-02-12 16:07 UTC (6 hours ago)
(HTM) web link (viewfromthewing.com)
(TXT) w3m dump (viewfromthewing.com)
| nikanj wrote:
| Fortunately Delta can fix this with a single "Dear
| members"-email. The skymiles-to-travel conversion rate is
| completely arbitrary, and points can be devalued simply by
| adjusting the amounts needed for various services
| [deleted]
| tasha0663 wrote:
| We're pleased to announce these exciting new options for
| redeeming your skymiles!
| tommiegannert wrote:
| Tangentially related: I just got a letter from my Visa card
| supplier here in Switzerland saying they've changed the
| Priority Pass (airport lounges) benefit to be unlimited.
| Previously it was only four free visits per year. I thought
| for sure they would make it worse when I opened it, but I
| guess last year was a great time to re-negotiate group
| discounts for travel.
| mnadkvlb wrote:
| If you dont mind, could you mention which vendor you use
| for this card, i am using one from a local cantonal bank
| which is good but doesnt have lounges in.
|
| Thanks
| wdb wrote:
| I wish that happened here in the UK
| Spooky23 wrote:
| Maybe.
|
| Remember everyone gets it, so the lounge may be full of
| screaming kids and mooches pillaging napkins and ketchup!
| cmurf wrote:
| It already is, except they are adults. My experience in
| United lounges the past year, barely worth free, not
| worth paying for. Bad coffee, even the on demand espresso
| capucino maker is crap. Lots of packaged food with signs
| you have to eat it in the lounge, not intended to take
| with you. Very little real food. Not a fan.
|
| About the best benefit is if you need customer service to
| find new flights, no line for that at least. Hilarious
| you need a lounge pass to get no wait customer service
| and clean restrooms.
| chrisseaton wrote:
| > My experience in United lounges the past year, barely
| worth free, not worth paying for.
|
| What United lounges have you been to?
|
| The ones I've been to, for example Newark, have free
| unlimited restaurant-quality table service, and unlimited
| premium alcohol, including unlimited Champagne. To be
| honest I usually look for longer layovers because it's a
| bit of a treat in there. I love working on their glowing
| mock-marble bar tops with unlimited iced Champs.
|
| And that's just the basic business-class lounge. I once
| had the fortune to be in United's Global First lounge in
| SF, and that was something more again.
|
| https://itstravelseason.com/airlines/united-polaris-
| lounge-f...
| gomox wrote:
| The basic United lounge is called "United Club", it's a
| much worse offering than the Polaris lounge you are
| referring to.
| [deleted]
| reincarnate0x14 wrote:
| The customer service desk really is the only thing about
| that worth it anymore for travel within the US, at least,
| and "worth it" has been questionable. Lounge access at
| some international airports is much, much nicer, but only
| worth it if those are places you're flying.
|
| The United affiliate lounges in much of east Asia make
| United's own look even more embarrassing unless you're in
| one of the international first/business ones. Although
| when the Chicago Polaris lounge was new I got stuck there
| on a super delayed flight and managed to kill a bottle of
| Yamazaki whiskey almost by myself, which probably wasn't
| great for my health and against policy but I slept like a
| baby on the way to Germany when we finally departed.
| servercobra wrote:
| Or all the lounges stop accepting Priority Pass members
| when you're actually traveling. The first year I had it
| it was great, the second year, I traveled like 5 times
| and every lounge wasn't allowing Priority Pass members.
| MattGaiser wrote:
| Credit card signup bonuses are also getting more aggressive
| in general.
|
| Many of them are at or near record all time highs.
| konschubert wrote:
| It's a race to the bottom with increasing fees and
| awards. That business needs to be regulated or better
| disrupted.
| freemint wrote:
| I don't see what you are talking about in Europe.
| paulcole wrote:
| What's the best one you know of right now?
| csdvrx wrote:
| The Capital One mastercard, $200 cash, no fee, minimal
| payments for 1.5 year at 0% (ideal to take advantage of
| inflation), various warranties thrown in for rentals etc
|
| https://money.slickdeals.net/credit-score/capital-one-
| quicks...
| ceejayoz wrote:
| There's way better out there.
|
| Citi's Premier just had a $800 signup bonus for a $95
| annual fee. Easy money. Lots of these out there.
| csdvrx wrote:
| I could only find references to gift cards, not cash
| bonus.
|
| Funny thing is I considered citi recently, but figured
| out it wasn't worth it. I ended up with capital one.
|
| Now if you can recommend Visa cards with cash signup
| bonus, I'm still looking for one :)
| ceejayoz wrote:
| Citi's ThankYou points can be redeemed for statement
| credit or bank deposit. With the right mix of cards it
| comes back at one cent per point.
| CrazedGeek wrote:
| The Resy Amex Gold and Platinum offers are really nice:
| https://resy.com/amex-offers . Same as the regular
| midgrade Amex offers (between $750 and $2500 worth of
| points, depending on card and what you value MR points
| at), but also, 10x points on restaurants on the Platinum
| for the first six months (up to $25k spend), and 20% back
| on restaurants on the Gold for the first year (up to
| $1250 spend).
| alex_sikora wrote:
| Depends on what you're looking for, cash back, hotel or
| airline miles. Here's a great list of the best sign up
| bonuses right now.
|
| https://www.doctorofcredit.com/best-current-credit-card-
| sign...
| lotsofpulp wrote:
| I think chase sapphire reserve was the peak at $1,500
| bonus (assuming you were already going to travel) in
| exchange a $450 fee, but that was offset by $100 global
| entry credit and a few other benefits, so it was close to
| $1,500 free for many people I know. I know my wife and I
| got it, and it was basically $3k for free.
|
| It was so costly that Chase had to list mention it
| specifically in their 10-K and I believe all the other
| banks looked and it and said no way are we spending that
| much.
| mym1990 wrote:
| Are they more aggressive in a dollar converted reward or
| just the # of points?
| ceejayoz wrote:
| Number of points.
|
| Since the best value is usually transferring points into
| airlines, they let others be the bad guy.
| MattGaiser wrote:
| Dollar converted reward. I regularly get 12-15 new credit
| cards a year and communities of people doing that
| (churners) are well attuned to the tricks used to reduce
| the real value.
| easton wrote:
| Or, as AA calls it "Hey! Want some magazines?"
| tehwebguy wrote:
| Not even necessary anymore, Delta no longer publishes an award
| chart so they have flexibility to charge any point amount they
| wish for any flight!
| PascLeRasc wrote:
| > 10% of flying is paid for with SkyMiles
|
| I think I live under a rock. I've never paid for a flight with
| miles and I'm one of the only people I know who uses credit cards
| at all.
| antiterra wrote:
| The majority of the miles I've earned have been through my
| employer flying me places, not my credit cards. I would guess a
| good portion of flights come from those who fly frequently and
| therefore have miles to fly on their own with.
| random3 wrote:
| Given the strategy that they won't be redeemed + infinite
| lifetime and potentially some barriers to convert/transfer, that
| liabiltiy will keep balooning. I wonder if they are assuming a
| write-off.
| [deleted]
| toomuchtodo wrote:
| You devalue the currency like a central bank.
| simonebrunozzi wrote:
| The SEC should start suing and penalizing airlines for the scam
| that airmiles is, before even getting started with crypto.
| bushbaba wrote:
| Scam? It's a business travel incentive to continue traveling on
| the same airline even if it's more expensive.
| kadabra9 wrote:
| This is why I always, always tell people to burn and churn those
| miles and points as they accrue them.
|
| Airline and hotel partners will NEVER make miles more valuable,
| they only get less valuable over time.
|
| Miles and points don't earn interest. Use them.
| dehrmann wrote:
| I only use them for upgrades because I worry that, when
| overbooked, airlines are more likely to bump people on cheap
| tickets. I have no idea if this is true.
| asiachick wrote:
| I thought it was well known that free miles are a scam. You'll
| end up flying the same airline just to get more miles when if
| you just chose the best fare you'd save way more than what you
| earn in miles. Even if you don't chose by fare, you also end up
| limiting your options. You want to arrive at 5pm but the
| airline you've signed up for only arrives at 9pm but you talk
| yourself into it "for the miles" etc...
| vanattab wrote:
| Your error is assuming people care about spending more money.
| Most people serious about collecting sky miles are spending
| someone else's money to build up their personal miles
| balance. And this is precisely what makes skylines so
| valuable to airlines.
| reaperducer wrote:
| _Airline and hotel partners will NEVER make miles more
| valuable_
|
| I don't think "NEVER" is accurate. It's just very very very
| very rare.
|
| I looked up awards flights on the airline I have miles with at
| the beginning of COVID, and it was offering crazy discounts
| just to get people in seats. North America to Japan for
| something like 10,000 points and ~$200 in fees.
| supernova87a wrote:
| Except, Delta (and every airline) can arbitrarily control the
| redemption rate (speed) of their currency being used, and the
| conversion rate. And have been devaluing that currency steadily
| over the years. Don't hoard FF miles, it's a losing game.
| sersi wrote:
| Yup, and unfortunately with covid, it's very very difficult to
| use miles :)
| coolspot wrote:
| You can stop mile inflation by redeeming them for dollar-
| denominated delta gift cards. They never expire.
| DesiLurker wrote:
| yes but they control the conversion ratio to dollar gift
| cards. what do you think happens when significant percent
| of holders start demanding the giftcards?
|
| miles are a losing game for consumer.
| choeger wrote:
| Airberlin issued Amazon gift cards back in the day. They
| were essentially as good as cash. In an unrelated story,
| airberlin went bankrupt shortly afterwards...
| nostromo wrote:
| The dollar is losing 8% a year of purchasing power at the
| moment.
| kube-system wrote:
| It _already has_ devalued 8% (well, 7.5%). There aren 't
| official numbers for what it is doing currently; it's an
| observation of history, technically speaking. Most
| economists believe this was the peak and that 2022 will
| bring significant declines closer to the Fed's target.
| And if not, the expectation is that the Fed will take
| action.
| dragonwriter wrote:
| > Most economists believe this was the peak and that 2022
| will bring significant declines closer to the Fed's
| target. And if not, the expectation is that the Fed will
| take action.
|
| The Fed already started taking action to reel in QE, and
| is pretty universally expected to hike rates in mid-March
| (right about the time QE stops on the current schedule.)
| The disagreements now seem to be about whether it is most
| likely to be a quarter- or half-percentage-point hike.
|
| Even if the drivers of inflation policy exogenous to
| monetary policy remain at the same level, this should cut
| inflation.
| reaperducer wrote:
| I wonder what the percentage loss was from previous
| points devaluation.
|
| If dollar purchasing power is down 8%, but the points
| devaluation is 50%, then turning the points into coupons
| makes a lot of sense.
| [deleted]
| Rebelgecko wrote:
| FWIW, I've typically gotten the best mileage redemptions by
| redeeming for a partner airline's flight. They usually have
| their own award charts that don't devalue at the same rate.
| [deleted]
| oneoff786 wrote:
| Probably fine. I would imagine most sky miles are accumulated by
| business travelers not paying for it, and very sparsely used for
| the occasional personal trip.
| forrestthewoods wrote:
| How many passenger miles does Delta per day / year?
| Scoundreller wrote:
| 74 billion per year in FY2020. Was approaching 250 billion/year
| pre-covid:
|
| https://www.statista.com/statistics/221076/revenue-of-passen...
| hourislate wrote:
| Wendover Productions has a video on how airlines are banks now.
| Their Loyalty Programs are worth several times more than the
| Airlines and flying is basically a secondary business for them.
|
| How Airlines Quietly Became Banks
|
| https://www.youtube.com/watch?v=ggUduBmvQ_4
| nexuist wrote:
| Airlines have historically been cash poor. It's extremely
| difficult to make an airline profitable, and demand fluctuates
| wildly due to weather, oil prices, world conflicts, etc.
|
| "If you want to be a millionaire, start with a billion dollars
| and launch a new airline." - Richard Branson
| brk wrote:
| This is particularly obvious on American Airlines. EVERY flight
| I took last year had the FA's telling how this one special
| flight qualified for a very rare offer... to open a credit card
| and get some base miles for free. I feel bad for them having to
| hawk this stupid credit card constantly, though I bet they get
| some kind of extra bonus for suckering people into signing up.
| bombcar wrote:
| The credit card bonus to the customer can be upwards of $400
| or more - so it's clearly worth it to the credit card company
| and they make it worth the airline's while also.
| selimthegrim wrote:
| How soon until this happens with Starbucks and gift cards?
| PascLeRasc wrote:
| Here you go: https://www.youtube.com/watch?v=mr039xnco-8
| rplnt wrote:
| edit at the bottom, my question has a simple answer: no
|
| That seems like an interesting topic. Wasn't Wendower
| Productions just reading Wikipedia articles over stock footage
| and blueprint graphs? Or am I mistaking that with some other
| channel(s)?
|
| edit: Well that was easy to search for, it was Real Engineering
| channel.
| gabagool wrote:
| Clearly my Google Fu isn't as strong as yours. Could you
| share a link about Real Engineering?
| kataklasm wrote:
| Seems like you have an axe to grind here, care to elaborate a
| bit?
| tommiegannert wrote:
| Numbers for context:
|
| $30B revenue, $16B current assets in 2021.
|
| $4.8B profit on $47B revenue in 2019.
| smsm42 wrote:
| So, we're talking about a debt of 20% of one-year revenue?
| Substantial, but not a huge deal, and given the redemption
| speed not too concerning. Comparing to a personal budget, it's
| like buying a car with a loan - not even an expensive one, if
| US medial salary is ~60K, then it'd be a 12K car. If I learned
| somebody making 60K has a 12K car loan, I wouldn't be too
| worried, if they can afford the payments. And this one is
| basically negative interest, since they can devalue miles with
| time (some even have expiration dates!)
| [deleted]
| forgingahead wrote:
| This isn't unusual - maybe the quantum is (though I have no idea
| if "$7.6B worth of travel" is large or small in whatever context
| the article is trying to make), but airmiles are awarded now with
| the expectation that the airline must fulfill them later. Maybe
| 30k miles gets you a 1 way trip now, normally valued at $200. In
| the future, they could devalue the miles and a 1 way trip costs
| 35k miles.
|
| Either way, they must be accounted for so yes it's normal to see
| this on a balance sheet. Is it alarming if you're an investor?
| Perhaps only if you think there will be a "run on miles" where
| nobody buys tickets suddenly and they all use miles to fly
| instead. But the airline will never allow that, plus these are
| all magic tokens any way, so not sure what the relevance of this
| in the article is.
| nikanj wrote:
| A run on the miles is easily stopped by a simple "I'm sorry
| sir, but currently there are no award-redemption eligible seats
| available for those dates"
| smegma2 wrote:
| Yeah, you could just as well say "the world owes Warren Buffett
| 100B in goods and services". Yes, Delta owes it in a sense but
| it's really just a statement of how many outstanding points
| there are.
| reincarnate0x14 wrote:
| They already limit the number of point-only seat sales and
| upgrades on most flights, my various United point schemes will
| get me "upgrade waitlisted" on flights with 20 empty seats left
| in first/business until sometimes the day of departure as they
| try to get cash payments instead. Maybe it's better if you're
| in the magical invite-only programs but even at 1K, their top
| regular-people loyalty tier (which is something like 15000 USD
| in flights each year) it's gotten pretty bad.
|
| How many point-only seats they'll sell seems more variable but
| I've seen the rates jump from like 35k miles to 75k miles for
| the same seats for no apparent reason on flights.
| [deleted]
| drpgq wrote:
| I've always wanted someone to calculate inflation in frequent
| flyer miles
| ethbr0 wrote:
| https://thepointsguy.com/guide/monthly-valuations/
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