If have tried to use your Delta Air Lines Sky Miles to redeem a free trip, you might be familiar with the program's nickname - SkyPesos.
I am not sure who came up with it, but it's an amusing moniker. [Update: I'm told blogger Gary Leff coined the term in 2009.] To some, SkyMiles are similar to a Banana Republic's currency because the program is subject to substantial inflation any time Delta feels like upping its prices. Several years ago, you would often see roundtrip tickets for sale at 12,500 miles each way. Now, while redemptions at that price are still possible, we often see a popular route like New York-Los Angeles priced at 32,000 miles each way.
But though the program is less generous - it is also now more difficult for many passengers to earn miles - Delta still gives out many free tickets and upgrades. I recently looked at Delta's annual report, and I was surprised at how many redemptions the carrier fulfilled last year.
Here are some numbers
- In 2014, SkyMiles members redeemed more than 296 billion miles
- Members redeemed roughly 12.5 million awards.
- In 2014, about 7.4 percent of Delta's total capacity went to SkyMiles awards.
There was something else in the report I found fascinating. Delta created this program, so it makes sense that the airline can change its rules whenever it wants. But the actual language on this matter is harsh.
"We reserve the right to terminate the program with six months advance notice, and to change the program's terms and conditions at any time without notice," Delta told investors.
Should you fear SkyMiles going out of business?
No. SkyMiles is a good tool for customer retention, and as long as that stays the case, it and similar programs should keep operating.
But there's another reason. Late last year, Delta renewed its deal with American Express that gives credit card cardholders SkyMiles whenever they use the card to buy something. As you can see in the Delta's presentation slide, this deal is worth billions to the airline - so much money that you need not fear the program going kaput any time soon.
Have you tried to use SkyMiles recently? How was the experience?