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A Week Later: My Thoughts on Delta’s SkyMiles Changes and Those Still to Come

by on January 23, 2013 · 45 comments

in Delta, Elite Status

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Last Wednesday, Delta accidentally posted their future Medallion program requirements and we first learned the new term Medallion Qualifying Dollars. While they quickly pulled down the site, they ended up re-publishing it the next day and releasing an official press release confirming the changes. The biggest piece of news was that you no longer qualified for Medallion Status by Medallion Qualifying Miles or Segments alone- you now also have to qualify by Medallion Qualifying Dollars or by spending $25,000 annually on a Delta co-branded American Express Credit card.

In addition, they bumped up the earning on many full-fare first and business class fares to 200% and changes some coach and business class earnings from 150% to 100%. Nothing too radical there and some people who buy relatively inexpensive Alaska Airlines first class fares jumped for joy.
delta exclusiveDon’t Think This Is The End of It
There are many more changes to come.
Yesterday Delta announced a final restructuring of the fare classes between Air France, KLM and Delta. It is a bit complicated, but you can read about the changes in this Flyertalk thread- essentially, the fare codes used for domestic Medallion upgrades will now also be used for the inventory for mileage/Systemwide upgrades. What this could mean is that people using miles and Systemwides would be on the same playing field as Medallions, meaning if Delta starts adding more advance inventory, they could try to get as many people to redeem “cash (systemwide or miles) before the 7 day mark when they process “free” upgrade to a Medallion. Or if they hold inventory back until departure, they currently prioritize those using miles to upgrade over Medallions, which  is similar to what United has done with their frequent flyer program, greatly prioritizing those who use instruments to upgrade over complimentary elite upgrades.
For those airline geeks interested, the new lineup of Delta fares will be: Business class: J, C, D, I, Z, O (Medallion and mileage/SWU upgrade inventory), Domestic First: F, P, A, G, R (Medallion and mileage/SWU upgrade inventory), Economy: Y, B, M, S, H, Q, K, L, U, T, X, V, E

Medallion Reactions So Far
The reaction to these changes has been mixed: some Medallions who already hit those spend thresholds were pleased that (hopefully) many wouldn’t and thus the elite ranks would be thinned out, meaning more upgrades for them. I do believe that the Medallion ranks are overinflated, but that is a direct result of Delta giving away elite status more handily than any other carrier in the world- with numerous credit cards offering huge Medallion Qualfying Mile paydays (the Reserve card alone gives out 10,000 after your first purchase and up to 30,000 more with $60,000 in spend- compare that to the American Airlines Executive Platinum card that gives a maxmimum of 10,000 Elite Qualifying Miles with $40,000 in spend). Delta also gave thousands of people 25,000 MQM bonuses when they transferred at least 50,000 Amex Membership Rewards points to Delta in 2011.

However, there were many Delta flyers angered by the changes (see Jaunted’s article on this subject), especially leisure flyers who don’t meet the Medallion Qualifying Dollar thresholds and who don’t have Delta co-branded American Express cards. Another big group of flyers angry with the changes were those who fly SkyTeam partners that aren’t marketed and ticketed as Delta tickets, will not count towards the Medallion Qualifying Dollars requirement per the official FAQ page,

“MQDs are the total of the SkyMiles member’s spend on Delta-marketed flights (flight numbers that include the “DL” airline code), inclusive of the base fare and applicable surcharges, but exclusive of government- imposed taxes and fees.

Flight spend for travel on other airlines ticketed through a Delta channel (featuring a ticket number beginning with “006”) will also be included in MQDs.”

MQDs highly encourage people to fly Delta planes. But what is the point of the alliance if one is penalized for flying a partner?

MQDs highly encourage people to fly Delta planes. But what is the point of the alliance if one is penalized for flying a partner?

 Worst Case Scenario
Lets say you travel JFK- Amsterdam once a month for work in paid business class. Your corporate travel agent books you into full-fare business class on KLM issued tickets. You’d get 7,287 base Medallion Qualifying Miles per trip, but with the new 100% bonus on top fares, you’d be raking in 14,574 MQMs per trip. 12 times a year that is 174,888 MQMs, more than enough for top-tier Diamond status. However, in the new program MQMs aren’t enough- you need Medallion Qualifying Dollars as well and if your tickets are issued on KLM, you would end up with 0 Medallion Qualifying Dollars per trip, meaning you wouldn’t even qualify for Silver Medallion Status. Of course you could get a Delta Amex and spend $25,000 a year to waive the requirement, but what if you are a foreign citizen living in the US and can’t get a credit card? Or what if you don’t want to get another credit card, because you are about to apply for a mortgage? There are many reasons why someone may not want or be able to get a Delta credit card and while I don’t think this scenario is what will affect most people, it is interesting to think about how high-value customers could still be cut out of this new program.

My Reaction
Delta is adding extra hoops to jump through and no additional benefits to the program, so I’m not impressed. I wouldn’t mind the changes if there were actually solid benefits added to the program (like more competitive system-wide upgrades). Delta announced the reason for the changes was “These changes are a result of considerable research that we’ve conducted including conversations with hundreds of customers, many of whom expressed a desire to see the Medallion program truly target our best customers,”

If Delta truly wanted to make the program more exclusive, they’d choke back the amount of Medallion Qualifying Miles from credit cards and also get rid of the option to avoid the MQD requirement by simply spending $25,000 on a credit card. I actually personally feel that it is totally fine for Delta to give preference to their American Express customers since Amex pays Delta a lot for those credit card miles (especially Medallion Qualifying Miles), but lets call a spade a spade- Delta did not create these changes to make the program more exclusive.

The Real Concern
Everyone should understand that the whole concept of moving to a Revenue Based frequent flyer program is to drive more revenue. Frequent flyers who think Delta is making these changes to cull the elite ranks and make the Medallion experience more “exclusive” are simply missing the boat. Delta is betting that the increased revenue they will generate from additional American Express cardholders and decreased (or even status quo) benefits, will make up for any elites defecting to other airlines. Only time will tell if that decision will pay off. My concern is that if Delta successfully changes the game and hacks away at elite benefits and mileage value (even further than they have over the past several years) and sees an increase in business, the other airlines will follow.

What everyone should be asking is whether mileage redemptions will change as well. I would not be surprised to see them also roll out a revenue based redemption program as well- meaning that the amount of miles needed to redeem for an award flight would be pegged to the cost of the ticket (similar to their current Pay With Miles program for Delta Amex customers). If this happens, it will be a 100% dealbreaker for me, because I’m fairly certain the international business class flights I like to redeem for- like my past Seychelles and Mauritius trips, would become astronomically more expensive.

In fact, even if Delta doesn’t switch to a revenue based redemption program, I still think they need to address their current abysmal state of awards. It can be near-impossible to find low-level awards on Delta operated flights and within the past year, partner flights (only available at the low-level) are becoming harder to find and even harder to actually book. I’m pretty sure if they asked their elites members whether they wanted better award availability or more “exclusivity”, the overwhelming majority would ask for a working award calendar that accurately showed partner awards.

What Should You Do?
As a consumer, you always have a voice, so don’t feel ashamed to let Delta know if you love or hate their new policies. Many airlines have made decisions that were reversed or enhanced due to customer feedback. These days, feedback in social media channels, like Tweeting @Delta also never hurts.

What are your thoughts? Have they changed since the news first leaked last week?

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • http://twitter.com/masonatkinson Mason Atkinson

    “what if you are a foreign citizen living in the US and can’t get a credit card?”

    I thought I read that non-US citizens are exempt the spend requirements?

  • thepointsguy

    Only members living outside the US. Not a foreign citizen living in the US

  • Jave2

    Will tickets purchased through third party travel agencies using points (ie amex membership rewards) be counted toward the MQD’S?

  • Paul

    Good article. I’m a diamond for the past 3 years, and these changes were the dealbreaker for me. They think domestic first upgrades are worth jumping through all these hoops, and they really aren’t. I’ll keep a CC that gives me DL lounge access, and that’s enough. Good luck Delta; I honestly think this will backfire on them.

  • Dieuwer

    As a current low-level Silver Medallion, I am actually considering switching to Alaska Mileage Plan. I never given AS a serious thought as I live on the East Coast, but changed my mind recently when I noticed that the benefits of AS MVP elites flying Delta are very similar to those of Silver Medallion flying DL.
    Additionally, I could occasionally fly AA and credit to AS as well. And finally, I performed some dummy award bookings to Europe and South America on the AS website and there were PLENTY of options shown (mostly on AA).

    It seems there is the option of a status match with AS? Perhaps I will do that at the end of this year.

  • JJ

    Seems DL is paying back Amex the favor of helping them come out of Chapter 11

  • Mikmik80

    The announced changes apply only to Medallions with US addresses. I live in Asia, and the rep yesterday told me there is “no change at this time to the program for our customers with an overseas address…..”

    As I am currently living in Asia and use it as my address of record, I have no idea where that leaves me. I have noticed that when I try to do some online booking, the Mileage and MQM totals that used to display are no longer showing up. What’s going on???

    I am playing defensively and booking my 800K Skylira on anything that I might possibly use this year. Delta has jacked up its prices a LOT recently, the search engine is more broke than ever, and I never could get two Skylira tickets booked on the same flights for me and my companion.

    I would say that the attitude of just about all the Delta employees has improved markedly this past year, but it’s just not enough to make up for all the negatives coming down the pike….

    Oh, yeah, I’ll also miss the free EconPlus seat upgrades I get as Platinum, but in the end I’ll save a lot of hassle and $$ using the other airlines serving my neighborhood.

  • Ralfinho

    Right now I am happy that I am no US citizen and thus am exempt from the spend requirements. I only travel twice a year to the US from Europe. So I collect enough MQMs (Medallion Qualification Miles) for Silver, but spend less than $2,500.
    But I somehow dread what may come in the future.
    Oh, by the way, the new term we learned is Medallion Qualification Dollars … from Delta, and the other term, Medallion Qualifying Dollars, we learned from bloggers ;-)
    It’s the same with MQMs and MQSs (Medallion Qualification Miles/Segments).
    Anyway, as long as nothing changes for us Europeans I am happy. Medallion status saves me some money (waived bag fees, EC discounts).

  • thepointsguy

    Citizenship makes no difference. The only thing that matters is what country you have on file in your Skymiles account

  • Asdfzxcvv

    Adios, Delta!

  • LarryInNYC

    In the “worst case” scenario you quoted in which someone is currently becoming a high-level Delta elite by flying exclusively on high-value KLM business class tickets, isn’t it more “natural” for that person to accrue miles, and become elite, in KLM’s program? I realize that program (is it Flying Blue?) might not be quite as desirable as Delta’s, but you’d still have SkyTeam Elite status and, presumably be treated quite well by your “home” program.

    Attaining status on Airline X using a relationship that’s limited to Airline Y is a nice loophole but, it seems to me it’s a loophole that provides no benefit at all to Airline X.

  • Ralfinho

    Right, sorry, bad wording on my side.
    Not only am I a German, but also living in Germany.

  • sfobuddy

    So, I can move outside of the country and skip the spend requirement? I think I can do that by 2014.

  • Sonju

    As a Delta Diamond I was totally surprised that the MQD level was set so low. If you regularly travel to get somewhere the spending levels are not onerous as airfares are not cheap. If you are just mileage running for status what is the point…so you can sit in First Class while doing a mileage run?

    Delta delivers the best domestic travel experience of the legacy carriers…period. I have never spent more than “low level” to get an overseas Business Elite ticket using miles although the booking process can be frustrating. If the “Diamond” ranks are thinned a bit in the future I am all for it.

    I can get plenty of Star Alliance and One World miles using credit cards to satisfy my craving for First Class international travel. I plan on staying with Delta if the program stays the same in the future…but things keep changing so who knows.

  • Santastico

    What would happen if I do a status match on Air France and even flying Delta I use my Flying Blue frequent flyer number to get the miles? As someone said I would have status on Air France that would have to be honored by Delta since they are both member of the Sky Team alliance.

  • http://www.facebook.com/profile.php?id=1494104836 Jordan Whitehead

    as a non FF, I am not affected by the qualifying changes. happy was able to redeem ORD-CDG-ORD in J on AF recently with minimum required DL miles. Leaves me at 98k. If the redemptions change will have to use the rest asap. guess we are all in trouble if they change and the rest of the industry follows suit. Hopefully of course it doesn’t happen.

  • Pricesquire

    Agree.

  • LT

    Delta’s pathetic award availability (or should I say non-availability) caused me to give up on Delta last year. I closed my Delta Amex, and have diverted spending and travelling to programs that really do reward me for my business. The latest changes confirm that I made a good decision.

  • Rob

    You could be an Expat and be exempt, has nothing to do with citizenship.

  • Ryan

    I was already planning my full switch to Alaska Mileage Plan (Alaska is pretty good for us here in San Diego) in 2014 anyway. This seals it. I have delta preferred through Feb 2014 and that will probably be it for me and sky miles.

  • Adam

    I would like Delta to add some more perks for their credit card – how about some free passes to the SkyClub instead of just a discount rate? I know United does this. Not enough perks with the card besides that and 10K miles for $100 off a ticket

  • http://www.triplepundit.com Nick Aster

    SO… just to play a sneaky idea… if i have a friend living outside the US, it certainly wouldn’t be difficult to just “move” out of the country. All it is is a mailing address that gets junk mail a few times a year. How would Delta even verify this kind of thing? What would the downside be?

  • thepointsguy

    If you “live” outside the us and all of your flights start within the US, I’m sure they’d be able to put it together and potentially shut your account down for fraud. But who knows whether they’d take that hard line

  • Jorge

    When is the fares structure changing? 2014 as well?

  • Nick

    I think you can’t look at this in a bubble. Delta is my #2 program, like my benefits of Silver enough to want to requalify for Silver, and have enough business travel to spend $2500 in 2014. But… it all depends on what WN and AA/US do. For work travel, points and upgrades are great, but aisle seats and cheap refundabilty or no change fees trump all.

    For the first half of the year, I’m flying DL for trips with very low probability of cancellation/change, and WN for everything else. But if things at either DL or WN deteriorate, I’ll shoot for a Platinum challenge with AA for August-October.

  • Mrcandoit

    Cashing out Delta asap. It has been a fun ride what with business class travel last year from ATL through to the Seychelles and a return through Amsterdam. Now, I’m using miles to go to Rome this summer and saying arrivederci. It is all about building up miles on credit cards for me…AmEx Plat and PenFed.

  • Dan Nainan

    I’m a Diamond Medallion member who earned 280,000 MQM last year, spent over $19,000 on Delta flights and put over $70,000 on my Delta American Express Platinum card, so this will only help me because it means there will be less competition for upgrades. Why should I have to compete for upgrades with Cubic Zirconia Medallion members who do cheap mileage runs?

    Also, I can designate anybody Gold as one of my Medallion choice benefits, So fortunately that person doesn’t have to worry about the minimum spend.

    So this is great for me, – bring it on, Delta!

  • Traveler

    So G and Z will be Delta the Fare Bucket that First Class Upgrades will come out of?

  • Traveler

    Delta says “Qualifying” expense of $25,000 or more……does that have to be spent on plane tickets or can that include spending money on anything using an AMEX Branded Skymiles Card?

  • Adpage

    Delta and Skyteam has lost all of my business because of this. As someone who fits squarely into the “KLM Scenario” because I almost always fly internationally in business on non-co marketed flights, I will no longer fly Skyteam. Hello Oneworld!

  • Guest

    Question somewhat related, but not necessary. How valuable is for upgrades and what not is status with partner airlines? i.e. Diamond on Alaska airlines or US AIR on United, etc.

  • 2 Million miler

    Sorry to join the comments late. I have sent 3 “compliment/complaint” comments to Delta asking how this new policy will help the Medallion experience. So far only robot answers come back which avoid that question. I would like to know how it is better for the individual flier. It is clear why it is a good deal for Delta. I am a Diamond flier and have been a Platinum for nearly a decade. I have the Platinum Amex card and meet the criteria. But I am incensed to be told that I must spend my money on anyone’s credit card to maintain my flight status. In addition, I have nearly 1 million frequent flier miles, but can rarely use them – because of confusing ticketing class categories, seating limitations which change hourly and confusing category names – even with the help of the Delta desk personnel. They are trying, professionally, to answer the distinctions, but the system is hopelessly complex. To achieve the $12,500 standard on Delta tickets is the equivalent of 27 trips at $450. According to the Huffington Post Jan 29, the annual median wage for 2010 (most recent year) was $26,364, which is only slightly above the Delta card required balance. I feel their explanations ingenuous and wallet sucker punched.

  • Guest

    Is the MQM rollover benefit continuing after this year? Rollover MQMs would seem to be something of a cruel joke to those who do not own a Skymiles Amex and do not reach the MQD threshold. Will there be rollover MQDs as well?

  • Guest

    Hmmm both questions answered in the FAQ on delta.com… rollover appears to continue for MQMs, no rollover on MQDs. Still seems a reduction in the usefulness of rollover MQMs.

  • Kind of sneaky

    Not that I would encourage that kind of behaviour but as an Australian Delta member all my flights for their program start in the US as well, as I usually use my Virgin Velocity or Qantas FF account for getting *to* the US and then use Delta domestically only (though sometimes I very rarely use for Skyteam, but not often, as they don’t really serve Australia)

  • Bill

    How does this change affect million-miler silver status people? I no longer fly for business, so I don’t get the kinds of ongoing, yearly mileage totals I used to. But I was given silver status based on total miles on Northwest and Delta over the years.

  • GulliversMom

    Although we are retired, my husband and I are frequent travelers – currently Platinum Elite. We have a Delta Amex card, but this new plan will require that we each have our own separate card (at $150 per year) and make 2 separate reservations, even though we are traveling together, so we can pay for the tickets on separate accounts…..all this so we can both maintain our status. If only one maintains status, upgrades for both of us are limited because they go by the lower status.

    Delta has given so many perks to anyone who has a Delta Amex Gold card (or above) that status doesn’t seem to mean much anymore, so why should I limit myself to flying Delta? This is just the change that puts the nail in the coffin.

    Delta doesn’t care about their customers. This is only a change to put more money in their pockets from Amex and will benefit very few of their frequent flyers. We will be switching to Alaska, which offers better options.

  • Ben

    Getting onto this thread a bit late but have been following Delta’s changes to SkyMiles. I live overseas and as you all noted here, the FAQs mention these changes taking effect for US residents only. If you have an overseas address as your primary address with Delta, on the face of it, it looks like the changes won’t apply. A Diamond desk rep confirmed that’s how she read it too. Delta could change that anytime. Anyone know why Delta wouldn’t apply these changes globally?

  • MJ

    Probably because they will lose any global loyalty they have. I stick with Delta purely because I was already elite with them when I moved from the US to Australia. If they were to implement this for international customers I would just switch to Qantas or Virgin.

  • Kim

    Just cancelling my Delta Amex now and scouting out which other airline to focus my travel with for next year. I’m a frequent flyer for work reasons and usually achieve gold status each year – but I can’t use my Delta Amex for flights – I am forced to use my company Amex which is not co-branded with anyone and gives me zero benefits. For some time now I find Delta just does not care about or value its frequent flyers. With drastic reductions in what is available in their skyclubs (some of which are getting very old and tired looking) and now this crazy MQD scheme – it’s time for me to move on. I’m not even keeping the Amex to get club access – now that they are charging for everything besides rot gut wine and cheap beer and have BAD snacks that are often not even kept fresh i’ts not even worth it. After all, we are PAYING for club access – seems insane they are now charging for items in the clubs that used to be “complimentary” (hello – we PAY for this each year to gain club access!). And last time I was in their ATL hub skyclub they charged me 3 times for a single beer. Never was able to get them to remove those charges. Bad service, bad clubs, difficult hoops to jump through to use mileage, no international upgrades, now this……Delta get real!

  • Sue_Flawkey

    The only reason I fly Delta and use skymiles AMEX is for the miles collection. If the symbiosis between Delta and Amex was severed, I would find another airline and credit card rewards program. Simple as that.

  • Sue_Flawkey

    @kim, you should easily be able to remove the charges with your credit card company for the beers. Seems odd that they don’t remove it. That’s why I like AMEX, never had a problem in over 20 years.

  • shay peleg

    Really would be interesting if MQD works for them or not and, we will find it if it works within a year from today.

  • shay peleg

    Anything

  • shay peleg

    Pretty sure Delta will find a way to inflate the ranks again

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