All airlines tweak their frequent flier programs from time to time. Delta just tweaked theirs with a hammer.
The first program changes take effect on March 1, 2013. Passengers will no longer earn a 50% bonus for Medallion Qualification Miles (MQM) on M fare purchases beginning after this date. The bonus will only be available for B and Y coach fares. However, F and J fares (full fare first and business class) will enjoy a 100% MQM bonus instead of the 50% previously. Also, there are some MQM reductions for flights on alliance partner airlines.
This is noteworthy because Delta requires at least M fares to be able to apply their Systemwide Upgrade certificates (SWU) for most international flights, already a greater requirement than most other airlines. Eliminating the bonus MQM’s means some Delta elites will not be able to re-qualify for their status level. For example, a Platinum elite who drops to Gold will no longer earn SWU’s so they won’t be able to upgrade on any flights by applying certificates. Note that these bonus changes only affect elite status, not redeemable miles used for purchases.
The much greater program changes take effect beginning January 1, 2014. While the elite status tier levels remain the same, a new requirement has been added. For those elites qualifying for 2015 status which is earned in 2014, Delta is adding a spend requirement to maintain elite status, as follows:
- Silver $2,500
- Gold $5,000
- Platinum $7,500
- Diamond $12,500
In other words, beginning next year Delta elites will need to meet both the MQM and the new Medallion Qualification Dollars (MQD) requirements to maintain their status. The spending levels are similar to those proposed by United Airlines about a year ago.
So how do Delta’s elites meet these spending minimums to maintain their status? There are two ways. The first is, not surprising, fly Delta. Generally, flying on Delta, Delta codeshares, or other airlines that include Delta’s “006” at the beginning of the ticket number will qualify toward this spend requirement. Certain “specialty fares” such as those from consolidators and group tours will not qualify, nor will many SkyTeam Alliance partners unless they are Delta-marketed flights.
At first glance, it looks like Delta is saying that they expect you to average ten cents/mile for airfare to maintain or increase your elite status level with their airline. Actually it will be more than that because you will not receive credit toward this requirement for things like taxes, baggage fees, onboard purchases, change fees, or other costs besides the basic cost of the airfare plus surcharges.
For some Delta elites, this policy change will have no effect at all. Many business travelers meet or exceed these minimum requirements already. For those that don’t, including leisure travelers, Delta has made it clear that if you achieve your elite status by meeting the required mileage or segment level but fail to meet the spend requirement, your status will be the lower of the two. If you do not have at least $2,500 is qualifying spend, you will receive no status whatsoever regardless of how many miles or segments you fly.
However, there is a way to avoid this spending rule. Delta is offering a second option, namely have $25,000 in qualifying annual spending on a U.S.-issued Delta SkyMiles American Express credit card. Note that this exception only applies to the Delta branded AmEx cards. It will not apply for other credit cards, including other AmEx cards.
Why did Delta decide to pull the trigger and add a spending element to their program, knowing many of their current elites will not be able to meet this new requirement? The airline says, “The new spend-based component will better recognize and reward our best customers and help ensure your Medallion benefits remain valuable.” In other words, they are making a bold attempt to put the flier part back into their frequent flier program.
To their credit, Delta is offering nearly a year to plan for this change. Obviously it is good for some, bad for others but this gives ample time to plan which airline meets your elite flying needs the best. For more information about these changes, Delta has a FAQ which is being updated as more questions are raised.
Offering a revenue-based frequent flier program is not new, but it is new to the U.S.-based legacy carriers. Will this strategy work? Will Delta lose many of their more marginal elites to the other airlines? Will some elites from other airlines want to join Delta’s program now that it is more exclusive? Will the other legacies follow with a similar program? Stay tuned, much more to come.
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