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New SkyMiles Revenue Based Program In The Works

by on January 16, 2013 · 54 comments

in Delta

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Update: Delta confirms this new revenue based Medallion program, beginning in 2014.

I recently wrote about changes I suspected were going to happen with the SkyMiles program and while some of you called me crazy, Delta today published (and then quickly retracted) a quick glimpse at the new program potentially launching March 1, 2013.

The post relates to elite status, but I bet more changes are going to come – especially with award redemptions. I’ll write more when I get a chance to review these changes in detail and analyze them for you, but in the meantime, read the post and feel free to share your initial thoughts.

Here are the initial details on what is coming:

Beginning March 1, 2013, the MQMs SkyMiles members earn on select fare classes will change:

For Delta-marketed flights, the MQM bonus for First/Business F and J fare classes will double from 50% to 100%, and Economy M fare class will no longer earn a 50% MQM bonus. This change will apply to tickets purchased on or after March 1, 2013.

The above changes also will apply to F-, J- and M-equivalent fare-class tickets on Aeromexico-, Air France-KLM-, Alaska-, Alitalia-, and Virgin Australia-marketed flights. This change will apply to travel flown on or after March 1, 2013.

The MQMs you earn on certain other partner-marketed flights will adjust for travel flown on or after March 1, 2013. Visit delta.com/partnerairlines for details by carrier.Please note that the way you currently earn redeemable miles is not changing.

Learn more about earning MQMs on Delta- and partner-marketed flights.

Medallion Qualification Dollars (MQDs) – Coming Next Year

Beginning January 1, 2014, SkyMiles members residing in the United States (excluding Guam, Puerto Rico and the U.S. Virgin Islands) will qualify for Medallion status based on an additional threshold – the member’s annual spending with Delta, which will be measured by Medallion Qualification Dollars (MQDs). Members must also meet the existing Medallion Qualification Miles (MQMs) or Medallion Qualification Segments (MQSs) qualification criteria.

The threshold ranges from $2,500-$12,500 MQDs depending on Medallion level.

Alternatively, Delta SkyMiles Credit Cardmembers can be waived from the new Medallion Qualification Dollars (MQDs) requirement if they make at least $25,000 in Eligible Purchases within the calendar year.

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/Goat__Rodeo Goat Rodeo

    SkyPesos!

  • http://travelbugdiary.wordpress.com/ Travel Bug

    I hope the give us some warning. I was planning on burning most of my skypesos next month, and hope that I’ll still get a chance to do so.

  • http://travelbloggerbuzz.blogspot.com/ TravelBloggerBuzz

    The end…

  • barelyelite

    Based solely on what you posted, this actually doesn’t look that bad. This doesn’t look like the Southwest-esque revenue-based program many of us fear. Miles earned will still be based on miles flown, and there’s no indication that redemption will be based on the cost of a flight. The fact that you can waive the revenue threshold for elite status by using the affiliate credit card cushions the blow considerably IMO.

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

    what’s worse than sky pesos? sky rubles?

  • http://twitter.com/JGfromOC Jason Gerdon

    So if I spend a bunch on flights, e.g. $10k a year, does that mean I can qualify for higher medallion status even if my MQM’s are under the threshold?

  • Urbanist

    So based on this it sounds like – if you own an AMEX Delta card, your skymile accruals and status will be business as usual, with the exception of better bonus mileage on certain fare classes?

  • Brett Domue

    So is the current link on Delta for partner airlines (from the article) correct for the new program, or also reverted back to the current? I’m really worried that Delta will start to follow KLM on how many miles they give on KLM discounted fares, with less than 100% MQM awarded.

    Next question would be, are MQD based on miles spent only with Delta, or also for dollars spent on partner airlines tickets? If you get no MQD credit for flights on AF/KLM, Korean Air, China Airlines, etc. then this will seriously impact business travelers who travel a lot internationally to Europe or Asia and who may have corporate travel offices who book them on KLM or other partner airline flights…

  • Steve

    This will only be the beginning. I wouldn’t assume that this small snippet of changes will be all they do. Probably one year of this, and then they will incrementally move to a revenue based award system. I it won’t be a true rev based system like Southwest, maybe a hybrid version of rev based earnings and distance/class based redemptions at set levels.

  • Adam

    I actually prefer the price-based award redemption if they can give 1.8 cpm like Southwest does. It’s hard for me to get their miles to be worth more than 1 cent anyways.

  • http://travelbugdiaryblog.wordpress.com/ Travel Bug

    Could you provide a link to this info? It’s be nice to get it first hand. I don’t care about the accruals, but I’m pretty nervous about the redemption side.

  • Taha Jamil

    Couple questions come to mind:

    1. If one has the Delta Amex and spends $25,000/yr, it’s status quo?

    2. If one flies on a partner airline and buys the ticket from the partner, how will MQD be credited? And suppose I buy tickets for my family, will I get MQD for all four tickets, or will those be divided among the four of us?

  • http://twitter.com/QuincyBotz Quincy B

    I still don’t understand what all this about… the only thing I can figure out is American Airlines is starting to look better than ever. I’m a silver medallion for the first time, and I have a Delta card, but what is this MQD thing? What does it do for me if I spend under $25K?

  • Michael

    It’s MQM AND spend. So no.

  • http://twitter.com/darrinearl Darrin Earl

    For IC flights, J fares typically cost 3X, 5X, 6X what discounted economy costs, so I’ve always thought the 50% bonus on mileage seemed a little stingy, which is why this whole “revenue based model” didn’t necessarily send me into a panic.

    The problem (as always with DL) is that none of us trust them anymore, and any changes are going to be judged as utterly terrible for the consumer until… well, I can pretty much guarantee that they’re going to be bad based on their track record in recent years.

  • Mrcandoit

    Sky lira? Sky caca?

  • http://twitter.com/TJonMilesPoints TJ on Miles & Points

    Let’s all hope that’s all they gonna change :)

  • Rob

    Wasn’t there a similar leak from Delta last year?

  • NEPIC

    Yes, it has begun! The only grace is that the delay in implementation of the next two phases (revenue based earning and redemption) will give a little more time to burn those pesos!

  • Eric

    That’s what I’m thinking. The biggest hit seems to come to those who do mileage runs to rack up a lot of miles for status, and those who rely heavily on rollover to help them out on off years.

  • NEPIC

    Miles earned will, in the near future be based on cost of the flight. Likewise, in the near future, redeeming miles will be directly correlated with the cost of the flight. The timeline is what is a little uncertain…

  • Frank266

    If you spend $25k.

  • Mooper

    Looks like Medallions flying primarily within the 48 states will continue to get a superb return from the program, especially if they utilize the branded credit cards. I suspect this represents the bulk of the changes that have been rumored and feared for years, and if that suspicion is correct, this is superb news.

  • Jim

    You stay dedicated to them as your airline of choice through all their trials and tribulations. Strikes, mergers, etc. while you bank your miles for the day you retire and can use them to travel to the places you always wanted to go and now they are in the drivers seat they begin “cutting your legs off” by making your banked miles virtually worthless. They keep asking you to maintain your allegiance with them but they keep cutting away at you. They smile and welcome you on board, cram you into a seat with no legroom, look with scorn as you ask for an extra bag of peanuts, and then on you departure thank you for flying with them. Are we dummies or what. They don’t really care about you as a person they care about how much spending potential you have.

  • Smittie

    I get a kick out of all the people using those credit cards to earn miles and points. As a retailer you look at your monthly statement and see who is really paying for those miles and points. THE RETAILER IS AND YOU PAY A HIGHER PRICE BECAUSE OF IT. You pay a premium for the Delta AMX Card, you use it to pay for you inflated airline ticket, you use it to pay for your drinks and meals and all other Delta products and just think how much you have paid Delta to get those points. Then now that you have them they want to add on fees and limitations to use them but if you pay ………… It goes on and on. You are the fish who got hooked.

  • Pricesquire

    One of the reasons I changed my Delta Gold to a SPG card last week.

  • Junius

    This seems ok with me. I spent over $20k flying last year for business and I’m only gold. Would this help improve my upgrade chances since the flight cost I take are high priced?

  • Urbanist

    I don’t think you get it…people would buy those plane tickets, drinks and meals either way. With a Delta AMEX, they’re getting miles for doing it. Are you saying that, as a retailer you add a premium to cover the costs of allowing people to pay with AMEX? How do you explain that to your customers who use Visa or Mastercard?

  • Mark D

    Delta does not have a great history at advance notice/warning. Even if they did there are a ton of miles out there. Partly because of TPG warnings and my own frustrations with their web site , we burned our last 200,000 miles on business class award to Europe this summer.

    Burn them fast ….
    Mark

  • DB

    Interesting point about MQD only applying to those residing in the US. I currently live abroad and am considering changing my mailing address accordingly so I’m not affected by this change…

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  • http://www.facebook.com/profile.php?id=658212819 Trevin Bernarding

    Hopefully, this will drive more frequent flyers to other airlines. Call me a sucker, but I love Delta. My biggest beef is how many medallion flyers they have. I get fewer upgrades every year so my hope is this will drive some away.

  • Pricesquire

    Same. I’m one 45 minute flight away from the largest Delta hub in the world (ATL). I love them. But, the future of their miles program isn’t looking too bright.

  • thepointsguy

    Agree that the blow is softened with the credit card spend.. but I highly, highly doubt they are just going to change the elite program and nothing else. Actually I’m almost certain there are many other changes to come and they won’t be pretty for people who like to redeem for business class or expensive domestic/intl flights.

  • thepointsguy

    What Mark D said- Delta is known for instituting changes with little or no notice at all. You’ve been warned

  • thepointsguy

    That is definitely a potential plus side for high-spending Medallions, especially in hubs who will make out better if others switch loyalty.

  • thepointsguy

    I’m sure you won’t be alone in switching your address! I guess they can’t make people use a credit card in countries where Amex doesn’t issue Delta cards

  • thepointsguy

    Less Medallions would mean better upgrades. I think the issue you’ll face is when your redeemable SkyMiles are devalued even more

  • thepointsguy

    I wouldn’t bet on this being the only change to happen ;-)

  • thepointsguy

    If you spend under $25k on your card, you’ll need to also spend a certain amount on Delta to maintain your status- flying alone won’t get you Medallion. YOu’ll have to spend a certain amount on flights

  • thepointsguy

    The info was pulled down on Delta.com so there is no direct link. Once there is, I’ll certainly post it

  • thepointsguy

    Delta currently values SkyMiles at 1 cent per mile when using Pay With Miles with a cobranded Amex, so I highly doubt they will increase that. Agree Southwest and Virgin miles are decent at ~2 cents a piece

  • thepointsguy

    All info related to the new program has been pulled down, so the link is current accrual levels

  • thepointsguy

    What Michael said

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  • G3ek

    Honestly. I hope they go to a revenue based system. I spent $13,000 last year on flights, all delta, and I didn’t even qualify for silver which is complete crap.

  • David

    The MQD thresholds are a problem for someone with my travel patterns. I just spent a lot of effort making Gold this year, and now I am done with Delta after this. I am hoping to make elite on United instead. I burned up a status match challenge with Continental, but does anyone know if they will take me in as United???

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  • FBG

    The T&Cs specifically exclude prepaid and reloadable cards from “eligible spend.”

  • DB

    Just switched it! Will wait and see…

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  • memphispiano

    It’s ALL bad! For you who think it will somehow improve your position because a few diamonds are eliminated, you are delusional. Delta is giving perks to more people than you can count—EVERYBODY can do priority boarding and priority security etc now. They give it to silvers—they give it to elite starwood members etc. The problem has never been too many diamonds. A lot of you think you are instantly OK because you spend above the threshold amount, but many of you are not realizing that taxes don’t count. Ever looked how much of your international ticket is actually tax? Spending on partner airlines doesn’t count either. Getting to $12500 for diamond is harder than you think. What about the year (like happened to me) when your wife gets cancer and you spend 1/2 the year at a cancer treatment hospital instead of flying? The rollover miles get you to 125,000 but now you lose diamond because you didn’t make the MQD (they don’t rollover). And then for those who look at spending 25K on your Delta card–that’s a bad deal too. What do you get? 1 free ticket at best IF you are lucky enough to get a low mileage award. 25K in spending is much better rewarded on a Starwood Amex—up to 6 nights free (that’s like $900 worth or more) with no blackout. But now I’ll have to spend it on the low perk Delta amex card just to keep my benefits. No matter how you cut it, these changes are basically “screw the Diamond” policy at Delta.

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