Delta continues Haneda roulette with its upcoming Minneapolis – Haneda route, which launches October 29. After having announced the end of the JFK – Narita flight, the airline will add this new daytime flight. Haneda is considered Tokyo’s secondary airport, despite its proximity to the city.
Delta Award Sale
Delta is celebrating the new route with an award fare sale, pushing one-way prices down to 25,000, 35,000 and 70,000, for Economy, Comfort+ and Delta One, respectively. In theory, these prices represent a 10,000 mile discount to “normal” mileage fares. You can, of course, depart from cities other than Minneapolis and connect in the midwest. To get the discount, book by October 13, for travel October 29 – December 7.
The word “normal” is in quotes because, of course, we don’t really know if it’s a sale anymore. With Delta having moved to variable award pricing and eliminated the award chart, making comparisons has become that much more difficult. Adding 10,000 miles to the sale prices gets you to the previous levels, but there is no longer a baseline.
What Does The Future Hold for Award Sales?
Truthfully, I’m surprised that it is taking so long for the airlines to move to a variable award pricing model. Since deregulation, the industry has always based paid tickets on its projections for supply and demand, but the award fares have been fixed. True, airlines have put in high and low seasons, and can limit the number of seats available, but there was minimal flexibility. I would wager that, sometime next year, one of the majors will announce that award prices will be based on the cost of the underlying ticket. In other words, an airline might say that a mile is worth one cent toward a ticket, so a $100 ticket would cost 10,000 miles, a $250 would cost 25,000 miles, etc. Once one of the network carriers does it, the others will quickly follow. With airlines facing mandatory accounting changes at the end of the year for miles, they have extra incentives to burn miles from their balance sheets.
But Miles Will Still Have Plenty Of Value
I think a penny per mile as a fixed redemption rate is draconian. I also don’t think that the airlines will go that far. Over the years, they’ve made billions of dollars selling miles to their partners. Destroying the value proposition for consumers won’t benefit them in the long-term. The marketing pitch will change, of course. Instead of promoting the value of miles, they will advertise the ease of use. You’ll be able to buy any ticket with miles, as the discount carriers offer. A Delta award sale may end up being just that, but it just be a change to the “exchange” rate. It’s a fine line for the airlines to walk. I hope that they tread carefully.