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Taking a Deeper Look at Delta’s New Mileage Earning Structure for 2015 and Beyond

by on March 3, 2014 · 33 comments

in Delta

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Delta made a huge announcement last week that its SkyMiles program would institute a new revenue-based mileage-earning structure aimed at frequent business travelers and those customers who purchase premium fares. As a reminder, here are the new rules.

Has Delta's recent devaluation got you rethinking your elite status?

Delta will introduce a new earning structure in 2015.

Earning

The major changes here – at least the ones Delta has released details on so far – involve the mileage earning structure. Delta will be transitioning from a traditional distance-based earning program where the miles you earn is based on the miles you fly, to a revenue-based earning structure where you earn miles based on the cost of a ticket and the fare class you purchase. Here’s how it breaks down:

Delta new earningSo General members will earn 5 miles per dollar.
Silver Medallion: 7 miles per dollar
Gold Medallion: 8 miles per dollar
Platinum Medallion: 9 miles per dollar
Diamond Medallion: 11 miles per dollar

You can still earn 2 additional miles per dollar with a Delta co-branded Amex. Basically this translates to the following fact: the higher the fares you buy, the more miles you earn. What might not be so obvious, however, is just what a mileage-earning hit the vast majority of flyers who buy your regular old discount economy fares are going to take. That’s why I priced out a few sample routes at various levels of elite status just to start giving you an idea.

*Keep in mind that the current figures on these business class fares aren’t accurate since Delta’s new Mileage Calculator does its math solely on airfare rather than on fare classes so fares that should earn a 50% class of service bonus aren’t necessarily credited with it below. Also, you do not earn miles on taxes on tickets. While US domestic tickets tend to carry low taxes (under $50 on transcons), some international routes may be higher, so when making your own calculations be sure to check the taxes on your fares. Still, the contrasts are stark.

EXAMPLE ROUTES

Let’s say you’re heading from Seattle (Delta’s new hub) to Boston. Airfares are around $448 in economy and $1,410 in business class.

Screen Shot 2014-03-02 at 5.39.58 PMAs a regular SkyMiles member, you’d earn the following now versus in 2015 in economy:

Screen Shot 2014-03-02 at 5.41.14 PMYou are earning 55% fewer miles on this fare!

As a low-level Silver Medallion, you do just slightly better:

Screen Shot 2014-03-02 at 5.42.09 PMBut your earning potential has been cut in half.

Even as a top-tier Diamond elite, earning 11 miles per dollar, you will earn just 44% of the miles you would earn in 2014.

Screen Shot 2014-03-02 at 5.43.01 PMLet’s see how you do in business class. As a regular member paying $1,410 here’s what you would earn in 2014 versus 2015:

Screen Shot 2014-03-02 at 5.44.49 PMThis is actually not quite accurate. Your actual mileage earning on this route right now would be 7,488 thanks to a 50% business class-of-service bonus. So you’ll be doing just about the same come 2015. As a Gold Medallion, which you would be if you flew this route once a month, the earning would look like this:

Screen Shot 2014-03-02 at 5.48.54 PMSo it looks like you’re doing a lot better. Well, your earning in 2014 would actually be 12,480 thanks to a 50% class of service bonus and a 100% elite status mileage bonus. So you’re still not doing as well in 2015 as you would be in 2014, though it’s becoming clear that the new system is weighted towards these expensive fares.

Let’s look at the popular JFK-LHR route.

Delta JFK LHREconomy fares are going for $999.60 in economy and $6,642.50 in business class. Based on that, you’d earn the following as a regular SkyMiles member in economy under the new system.

JFK LHR milesThen even as a Silver Medallion, you’re still not earning as much:

Screen Shot 2014-03-02 at 5.54.21 PMLet’s say you were a upper-middle-tier Platinum on this route, here’s what your earning in economy would look like:

Screen Shot 2014-03-02 at 6.03.16 PMYou’re still losing out on about a third of the miles you would have earned in 2014! Where the equation starts to change is in business class. As a regular SkyMiles member, here’s what the calculator says:

Screen Shot 2014-03-02 at 5.58.17 PMWith the more accurate figure with the class-of-service bonus thrown in, you’re earning 10,356 miles on this route in 2014, but you’re still way ahead under the new system because it favors spending so heavily.

As an upper-middle-tier Platinum Medallion (which you would be if you flew this route once a month, here’s what the earning looks like:

Screen Shot 2014-03-02 at 6.00.35 PMKeep in mind, you’d actually be earning 17,260 miles with the 50% class of service bonus, so you’re earning almost 3.5 times as much under the new system. That’s what a $6,600 airfare will get you!

The new model is also geared toward premium travelers on short-hauls. Here’s a sample route from Atlanta to Detroit, two Delta hubs:

Delta ATL DTWAs you can see, it’s an expensive route where even coach tickets are $444, though first/business are just $736. As a regular member, here’s what you’d earn now versus 2015 in each class:

ATL DTW regSo you’re already doing better because of how expensive coach fares are. Let’s say you’re a Platinum Medallion who flies this route all the time, here’s what your earning looks like:

ATL DTW PlatAlready you’re doing about 66% better.

So clearly if you buy expensive premium tickets all the time or you fly high-priced short-hauls, the new system is going to hold some allure for you – though you have to be buying those high-priced premium or last-minute fares for this all to make sense, and the rest of us who search for a bargain (even within the reasonable parameter of remaining loyal to the same airline or two whenever possible) are going to see a huge cut in our mileage earning.

THE NEW MILEAGE EARNING SCENARIO

To figure out just what this means for the flyers Delta claims it is targeting with these new policies – those premium business travelers and elites on highly lucrative routes like the transcontinental ones between New York JFK and Los Angeles LAX, I wanted to sketch out a sample flying/spending scenario. I calculated out a typical roundtrip itinerary on this route leaving Sunday evening and returning during the day on Thursday. The total came to:

Screen Shot 2014-03-02 at 12.36.05 PM

Economy: $408
BusinessElite (in discount business C class): $2,945

So at the very base level, here’s how many miles you’d earn per roundtrip now versus the new system based on those fares and roundtrip mileage of 4,950.

Screen Shot 2014-03-02 at 12.38.53 PMCurrently you’d earn the following miles per trip per elite level in economy and $408 Medallion Qualifying Dollars:

Regular: 4,950 miles and 4,950 MQM’s
Silver: 6,187 miles and 4,950 MQM’s
Gold: 9,900 miles and 4,950 MQM’s
Platinum: 9,900 miles and 4,950 MQM’s
Diamond: 11,137 miles and 4,950 MQM’s

In 2015 you’d earn the following miles per trip per elite level in economy and $408 Medallion Qualifying Dollars:

Regular: 2,040 miles and 4,950 MQM’s
Silver: 2,856 miles and 4,950 MQM’s
Gold: 3,264 miles and 4,950 MQM’s
Platinum: 3,672 miles and 4,950 MQM’s
Diamond: 4,488 miles and 4,950 MQM’s

So the break-even point with your regular discounted economy fares for 2015 earning to equal 2014 earning would be:

Screen Shot 2014-03-02 at 6.18.25 PM

Regular: $990
Silver: $884
Gold: $1,238
Platinum: $1,100
Diamond: $1,013

So we’re talking about some very high-priced economy fares here once these changes go through!

Currently you’d earn the following miles per trip per elite level in business (including the 50% class of service bonus) and $2,945 Medallion Qualifying Dollars:

Screen Shot 2014-03-02 at 6.16.48 PM

Regular: 7,425 miles and 7,425 MQM’s
Silver: 8,663 miles and 7,425 MQM’s
Gold: 12,375 miles and 7,425 MQM’s
Platinum: 12,375 miles and 7,425 MQM’s
Diamond: 18,383 miles and 7,425 MQM’s

In 2015 you’d earn the following miles per trip per elite level in business and $2,945 Medallion Qualifying Dollars:

Regular: 14,725 miles and 7,425 MQM’s
Silver: 20,615 miles and 7,425 MQM’s
Gold: 23,560 miles and 7,425 MQM’s
Platinum: 26,505 miles and 7,425 MQM’s
Diamond: 32,395 miles and 7,425 MQM’s

JFK-LAX Once a Month

So based on those numbers, here’s how many miles you’d earn in a year and what you’d end up with mileage-wise and elite-wise if you were just a road warrior who bought economy tickets. Let’s say you’ve been doing this for a year now already – you’d have Gold Medallion status and would be earning the following on economy tickets:

Award Miles: 118,800
MQM’s: 59,400
MQD’s: $4,896 (spend the extra $4 one month to squeak by for Gold status MQD’s!)

In 2015, here’s what your earning would look like:

Award Miles: 39,168
MQM’s: 59,400
MQD’s: $4,896

So your real difference here is in those award miles. For now, Delta is keeping the MQM-earning and MQD process the same, so you’ll still make Gold, but you’ll have a lot fewer miles to show for it.

JFK-LAX Twice a Month

And for the uber-business flyers out there, here’s how many miles you’d earn in a year and what you’d end up with mileage-wise and elite-wise. You’d end up with Platinum status, so let’s say you’ve already done this for at least a year and are Platinum Medallion.

Award Miles: 237,600
MQM’s: 118,800
MQD’s: $9,792

And for 2015, you’d be earning the following on the same amount of flying:

Award Miles: 88,128
MQM’s: 117,200
MQD’s: $9,792

Once again, your award-mileage earning is drastically reduced.

CONCLUSION

That’s a lot of numbers to throw at you for now – and quite frankly, my calculator is about to explode, but I think that the results are far from a mixed bag. What’s clear is that you are going to have to spend a lot more money on airfares, even as a top-tier Diamond Medallion to break even on award miles once the new program is put in place. Just how bad that news is remains to be seen since Delta has yet to announce details of the new five-tier award system it says it will be putting in place, but I’m not holding my breath for a positive development on that front.

I don’t want to be too doom-and-gloom about all this. While I’m definitely disappointed in Delta and I am already completely revamping my own airline loyalty and elite status strategy, there are plenty of other options out there and I’ll be exploring those myself as well as in future posts, so keep checking back for ideas about how you can cope and continue to get the most from your flight activity.

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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  • Nathaniel Jacobson

    So looking at your math, and this is
    form my point of view on benefits/devaluation, I don’t think this changes much
    for me. I am at best a segment GM each year (although I’m coping with having
    just dropped to SM b/c I didn’t travel last year). Most of my trips are up and
    down the east coast and the mid-west. Very rarely do I travel all the way to
    the west coast or the northwest. I buy most of my tickets on 2-3 weeks’ notice
    so I’m not getting the cheapest tickets but I’m not paying for FC. My guess is
    I’ll likely do better on the redemption side instead of pulling in just 500
    miles a segment on many of my trips.

  • Ruthlessly Absurd

    When they say “You earn 2 extra points a dollar with the Skymiles AMEX” … do they just mean the points you earn on your spend? Or are you getting a separate bonus? Because otherwise they might as well say “3 points with the AMEX gold preferred”

  • salamacuse

    As a Silver Medallion (for the last 5 years) who travels JFK – LAX 5-8 times a year exclusively on Delta, (thanks for the JFK-LAX chart BTW!) this did it for me. I’ve put my money where my mouth is and left Delta. (and I loved Delta!) I may not be a big spender but I average about 450 dollars per flight. Not cheap. I am currently status challenging with AA and got the citi card too. Skymiles are way too difficult to redeem in the first place, and in 2015, I would earn less of these difficult to redeem/lesser valuable miles? Really? As much as I love the Delta product and customer service – loyalty is a two way street.

  • Urbanist

    I’m not sure how to feel here. Part of me is really pissed, primarily because of the lack of non-MQM miles that will no longer be earned as part of the “bonuses” set up for skymiles members. While this does nothing for status, these miles accumulate pretty quickly, and go a long way when actually redeeming miles. The other part of me wants to see something done about the commonality of perks that seem to be offered across the board to travelers with almost any status whatsoever. There’s a big difference between the diamond (or even platinum) member who travels frequently and the gold or silver who gets there with a couple trips a year and a credit card bonus. Lumping these individuals into the same perks categories (free economy comfort seating, same boarding time, etc) is very dilutive to the benefits that are more of a requirement, than a nice surprise, to truly frequent travelers.

    That said, given the absolutely abysmal functionality of Delta’s site, the lack of value that their points have in the first place (i.e. 240,000 skymiles to fly RT from the US to S Pacific on a standard redemption vs. ~130,000 or so on United), and the fact that, even with a good status, you constantly feel ripped off, I’ll likely be moving away from Delta and towards another airline.

  • dagny111

    What seems lost in this whole discussion is the fact that many business flyers must buy the lowest fare as a rule of their company, I assume these flyers will no longer fly Delta. It is bad enough being away from home all week, week after week, not to mention the TSA , smaller seats, etc. But to get fewer miles on top of all that?

  • Richard Kahn

    Over the years the only redemption my my family gets for my leaving them 80% has been an annual trip to someplace in the world – business class. What Delta has done is eliminated that benefit – so what this means to people in my situation is a cut in pay. There is no way people can steer towards higher fares and remain in management too long. Companies have Controllers that watch spending and big spenders end up being shown the door in short order nowadays.

    I don’t manage Delta and won’t tell them how to run their business – but I hold U.S. regulators for not doing their job of protecting consumers. They approved all the mergers and now airlines can do whatever they want maximizing their profit at any opportunity because they say “where are they going to go?”.

    You may recall Netflix overnight Netflix raised their service price more than 50% and lost nearly half of their subscribers also saying “where are they going to go”? They took a temporary hit on stock price and profit, but a year later they are going strong once more after throwing in a few more new services with expectations lowered.

    Thanks for the article. Hopefully (a) all Delta customers will immediately switch to the two remaining competitors and (b) the Competition takes Delta’s move as “free marketing”, enjoys the new revenue and (this is a big HOPE) refuses to follow their example.

  • Michael

    I understand where you’re coming from, but I want to point out “lowest fare” isn’t “cheapest seat”, just the cheapest available at booking. I’m policy protected in that we are advised to book 14 days in advance, 7 if necessary. I try to do the right thing and book a bit further out but I suspect some will follow policy more closely to the letter now.

  • Phildade

    Hey guys – to put into perspective just how terrible this is, please compare Delta Mile / Dollar #’s to what I am getting on United… And I use an Explorer card, so feel free to add 2 miles per $ to compare with Delta’s Amex… BTW, my gold is lower than silver because much of my gold qual is from when I lived in Europe for a summer, so lot of short flights…

  • joeypore

    This is pretty terrible… The only possible plus I could see is if they completely restructure their miles system and make awards much cheaper. Is that going to happen? Probably not…

  • DavidYoung2

    I do mostly shorter haul flights out of the Southern California basin. After the changes to the club entry rules (pay for spouses / guests) and now this, it’s bye bye Delta. The Company booked three trips late last week for my April travel, and it ALL went to Southwest instead of Delta. Hey, I’d love for my company to pay the higher prices for business class travel on Delta, but guess what. I don’t make the rules and corporate travel says we need to fly on the cheapest seats if possible.

    I’ll be missing Delta, but I can see the writing on the wall. The anti-customer policies are sure to continue with Delta – don’t think the miles devaluation, restrictive lounge policies, etc. are the end of it. There’s more pain to come for Delta customers (well, if they have any left in a few months)

  • Paul

    Peace out Delta

  • Paul

    Imagine where Netflix “could be” had they not lost half of their customers. 7.95 per month is also not the thousands most of us spend on airfare a year. I will never again fly Delta unless the step up like Southwest and adopt the same cancellation rules, customer service, etc. The reason SW can do what they do it because of the lax cancellation, change rules, etc.

  • Kyle Monson

    I’m a Platinum medallion member in NYC, and most of my clients are on the west coast, so my flights tend to be trans-continental. As you can imagine, I’m pissed about both the new miles structure and the new lack of upgrades for JFK-SFO/LAX flights. (They’re treating it like an international flight…gah.)

    I wrote a note, got a dumb reply, and am now trying to figure out where to migrate to. American?

  • Nurit

    So if Delta makes the award tickets cheaper in 2015 (as per their emails to skymiles members) and allows one way redemption, does it make sense to rack as many miles as possible by Dec 31st and then spend them next year on cheaper awards? Once all miles spent then leave Delta? Am I missing something?

  • Richard Kahn

    Not all of us have that luxury. My magic thinking wishes that customers would allow us to buy tickets far in advance, but that’s not how it works.

  • http://www.keylance.org The Dutch guy

    Delta is a business and they are allowed to do whatever they want. However, changing such fundamental rules – in contrast to e.g. upping luggage fees – for the next year, in other words, while the game is already being played (we are already collecting for next year), is unethical – it should have been for 2016. It discredits the ‘respect’ part of the airline’s slogan. Let alone that the content of the message is a tipping point as well.

    Delta: adios, au revoir, goodbye, auf wiedersehen & tot ziens.

  • Richard Kahn

    Delta is going to test how high the exodus of their loyal customers will be to American, and gauge how much profit they will lose as a result of this action before they consider doing anything positive in the other direction. If there is a minor or no impact, this may become the NEW INDUSTRY STANDARD until the next test.

  • Scott

    I may be naïve but I’m holding out hope that Redeeming Miles
    will be overall allot easier in 2015. Unfortunately per a previous post by TPG, I’m losing hope each day, as Delta has not followed up “bad news” with “good news”. Most of my miles and medallion status these days comes from my AMEX Res. Card so I’m standing by to see the official award changes.

  • John

    Is it just me, or did the changes make Skymiles MORE valuable? Now that it’s harder to earn them, doesn’t that make the existing ones you have go up in value?

  • ncjds

    It’s actually even worse than this. You should not include the cost of taxes in the DL calculator.

  • Ven

    The more I think about this, the more I feel like this is going to get really bad once they announce the award chart changes. They will go up, WAAAY up. Think about it. An F passenger booking a one way tickets can earn 75,000 miles and book a return flight on points. This essentially turns F tickets into B1G1 affairs and will force Delta to raise the price of redemption. This turns into a double massive deval.

  • tivoboy

    How long until I can just BUY the status that I want to have. Because, this is the same as that would be. There is no more BIS merit to earn status, it’s just about the Benjamins, so just let me pay and buy it upfront please. Or at least pay upfront to fill whatever gap I think I’m going to have at being of year or end of year..

  • ATLDFlyer

    Uh…no. Its like saying if you get paid less, doesn’t that make you richer? Yes, you’ll value the $ more, but you have less to buy anything.

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

    This is just a headache. Since I’m more concerned with earning MQMs to maintain status I’m less bothered by the loss of regular miles – and holding out some hope that redeeming them may become easier after deflation takes hold.

    Still, I’m done with Delta. It’s the MQDs that killed if for me. Not this latest devaluation.

  • http://blog.davidciani.com David Ciani

    Slowing down the SkyMile printing presses may give them some latitude to deflate the redemption values a bit, if they are ok with the program changes being revenue neutral (or mildly enhancing), but one really won’t know the answer to this until they announce the details of the new redemption levels.

  • Indieproducer

    Hi!
    Silver as well. I travel 12 times a year between JFK-LAX and after going through this post tonight, I am happy to say I have started the conversion process. Got approved yesterday morning for the new AA card and will start booking for my next trip shortly. Also, how do I do a Challenge with AA? #TPG #coverthisplease

  • CMH322

    While I have debated jumping ship to another carrier, is it not possible that the other legacies may follow suit? I would be deeply disappointed if I up and leave DL for AA/UA only to see the same thing happen there in due time.

  • Darrin Earl

    I’d argue that paying only $450 a month for a transcontinental flight IS actually pretty cheap these days… that’s a lot of miles for that many dollars, compared to pretty much any route I fly regularly. Of course, this is reflective of having great competition at those airports and on that route.

    I applaud your switching allegiances, and here’s hoping the other shoe doesn’t drop post-merger with AA.

  • Darrin Earl

    Great points – I think it’s interesting that Delta is SO confident that their services are SO great that business travelers will continue to choose to bless them with their dollars… domestically, I’m pretty sure that they aren’t THAT much better, and the negative changes you lay out are totally valid dilutions to these very same customers.

    I have coworkers doing as you mentioned (switching to Southwest with fair redemptions) or to AA (with the AMEX Platinum card for the Centurion lounge access in DFW).

  • Darrin Earl

    I really think that folks around here are either:
    a) not going to switch as much as they are proclaiming
    b) not representative of the 97% of fliers who are buying tickets based on price/schedule (rather than FF program, etc etc.)

    I could be wrong, but I am pretty confident DL knows what they’re doing… which is quite bad for the US FF program landscape in the future.

  • Richard Kahn

    I guess BIG the question is: Have the airlines figured out that selling the points to credit card companies and YOU is worth more to them than giving them away to earn loyalty?

    TPG says that Mileage Points is now a multi-million dollar business that is not going away soon – and I agree. However the business model has changed. Now an Airline now can either sell (A) AIR TICKETS that a customer owns and they are obligated to deliver services on or (B) MILEAGE POINTS that the customer does not own, they have no obligation to offer availability of flights for and they can devalue at any time they choose with no penalty.

    There is no way that “A” (real business with low margin) can compete with “B” (a scam that should be illegal). Scams (EASY MONEY) are always more profitable than hard legitimate business.

  • Carl

    I’m not sure about that. As a consultant funding my leisure travel with points, maximizing spend with one national and one regional airline is generally the best. I spent just under $20k with Delta last year, and plenty on high priced tickets. The new plan would cut my earned miles in half as most of it was between coasts. One quarter in this year so far Delta has earned $0 from me.

  • beezer

    Looks like I’ll be getting rid of airmiles (should we call them airbucks from now on?) and going for cash back credit cards from now on.

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