Point Me to the Miles

Delta Takes a “Sky”Fall With Revenue-Based Changes

Well, I suppose I should adorn myself with sackcloth and ashes.  I might as well start mourning the death of the Delta SkyMiles program, though it’s been rumored for quite some time.

According to a Yahoo Finance press release, Delta will make some revenue-based changes to their award program, beginning next year.

“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,” said Jeff Robertson, vice president – SkyMiles. “Adding a revenue component to the SkyMiles Medallion program ensures that our most valued customers receive the best program benefits and a more exclusive experience.”

Evident in this statement is the fact that Delta (unfortunately) wants to transition to more controlled transparency.

For starters, the M fares (more premium coach fares) will no longer earn a 50% mileage bonus (redeemable and elite qualifying).

Even worse, Medallion elite qualification will be dependent on miles (or flights) flown AND the amount spent on flights, which Delta calls Medallion Qualifying Dollars (MQDs).

According to this model, here are the requirements for the various tiers for 2015 Medallion elite qualification will be as follows, with the current requirements emboldened:

• Silver – $2,500 in Annual Spend + 25,000 Medallion Qualify Miles(MQMs) OR 30 Medallion Qualify Segments (MQSs)
• Gold – $5,000 Annual Spend + 50,000 Medallion Qualify Miles(MQMs) OR 60 Medallion Qualify Segments (MQSs)
• Platinum – $7,500 in Annual Spend + 75,000 Medallion Qualify Miles(MQMs) OR 100 Medallion Qualify Segments (MQSs)
• Diamond – $12,500 in Annual Spend + 75,000 Medallion Qualify Miles(MQMs) OR 100 Medallion Qualify Segments (MQSs)

While I do think having airline status is important, I am afraid they will make having status on Delta not worth the money it costs.  To put it in perspective, in maintaining Gold Medallion status this past year via about ~$3,000 on Delta flights and receiving a Delta Platinum AMEX sign-up bonus.

Under the newer model, earning/maintaining this status would have cost me nearly twice that. A lot to pay for considering my First Class upgrade percentage was a little above 50% in 2012, not to mention free checked bags, free Economy Comfort seats, and priority check-in and boarding.

And granted, more changes—particularly to SkyMiles redemptions, may come.

Of course, the one exclusion to these rules is to spend $25,000 on a co-branded American Express.  However, this is probably a bad idea, as it is best to diversify your miles, and SkyMiles are slightly lacking in value.

Even though Delta has finally made this information public, there are still some questions I have about this transition:

1. Does Delta really expect this to increase business?  While a fair number of elite frequent fliers fly a particular airline only because their company has a contract with that airline, it seems to fair to say that they would retain about the same level of business.  Or even worse, a lot of elites like myself-who CHOOSE to be loyal to Delta will drop switch to a different airline.
2. Will competitors look to scoop up such elite frequent fliers?  If say United offered me 1K or even Premier Platinum status to switch, I would be all in.
3. In this revenue-based model, will tickets bought with vouchers earned for denied boarding not count toward your annual spend requirement?  If so, I might have to take a lot of red-eye flights between hub airports…..
4. Given the $25k in co-branded credit card spend exception; is it conceivable that more Vanilla Rewards gift cards may be purchased in the coming year?

Head nod to The Pointsy Guy