Delta Appears To Eliminate Saver Award Inventory 3 Weeks Prior To Departure

I’m not sure I wrote about Delta this many times in all of 2014…..

It appears that Delta has wiped all saver award inventory for every destination for flights that depart within 3 weeks of booking.  I received a comment from Nun on my Delta post discussing their award chart removal this morning that alerted me something was going on.  I started doing some searches and literally couldn’t find any saver (cheap) inventory available between any city pairs I tried.  Here’s just one example:

Then, I started to see other blog posts pop up about it.

View From The Wing is calling it an advance purchase requirement.  Cranky Flier gave them an award for this move (tongue in cheek).

Let’s confirm what this definitely is:

• A really bad change for consumers.  One of the nice things about keeping a stash of miles is when last-minute changes pop up.  I’ve used miles to get me places in an emergency or just on a whim.  Airlines typically view short-term empty seats as distressed inventory, and I’m always happy to take some of it off their hands.
• Not something that would have been evident if they’d kept their award charts.  After all, they still offer saver awards.  You can see them available above on the 10th, 12th and 14th of March.  So, this isn’t the type of change that they would have disclosed on an award chart, especially for a company that doesn’t trade in transparency.

I think other bloggers have done a good job of explaining why this is bad for consumers (and I’m sure more will later in the day).  But, is this good for Delta?

I’d be really interested to see if they have data that supports this question.  It’s clear what they’re betting on, that more people will have a need to redeem close-in than Delta will have a desire to dump inventory to.  Thus, raise the price!

I used to work in the hotel industry and one of the executives I used to work for would say something along the lines of, “We sell a place and time, and we can only sell it once.”  Translation: if a hotel room goes empty tonight, we can’t sell it twice tomorrow.  One could argue you could sell it for twice as much the next night, but the counter-argument is that would be good yield management, not making up the revenue you lost.

Similarly, once that airline seat goes out empty, it’s “spoiled inventory”.  If can generate even a dollar for a seat that would otherwise go out empty, it’s truly found money.  Obviously, yield management is a lot more complicated than that, as the airlines need to sell most seats at a relatively high price to make money.  Award seats are, in most regards, the way airlines put their inventory on clearance.  For starters, not everyone can buy those clearance seats, only those people who have enough miles saved up in their account to redeem for an award.  Secondly, the airlines need to carry a liability on their books for those unredeemed miles.  So, clearing some off the books for a seat that was going to be empty is a “win”.

It’s just that tricky game of figuring out if that seat is truly going out empty. Capacity discipline means very few seats go out empty these days.  But, it’s a bit of feast and famine.  When you see the airlines maintaining load factors (measurement of how full planes actually are) in the 80% range, that doesn’t mean there’s a handful of seats on every flight.  It’s more like every seat between IAD and LAX being full on a Monday morning flight (and Friday evening, for that matter).  But, on Tuesday, like my American Airlines flight this past week, you might see 50 empty seats.  American would likely have taken more award seat customers last week if they could have gotten them on my recent flight.

Delta is saying they won’t, and that they can fill enough seats with revenue customers or award seats at higher levels to make up for someone who decided to fly another time.

To be a fly on the wall 6 months from now when they crunch the data…..

The post Delta Appears To Eliminate Saver Award Inventory 3 Weeks Prior To Departure was published first on Pizza In Motion.

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