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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Posted by Carol Margolis | 8 Comments

8 Responses to “Delta Air Lines Pulled the Trigger – New Rules for Delta Medallion Elites”

  1. Roy says:

    A mess! I travel frequently with my wife. We are both Medallion fliers. But I buy all tickets. So now she has no possibility of maintaining Medallion status, boarding flights together priority, upgrades, Comfort seats & other perks. Does a joint credit card account suffice? Do we need to change family financial arrangements? More credit cards? I really resent this!

  2. Hi Roy, thanks for your comment. As I read the rules, you should not have a problem. Presumably you have been buying both tickets for a while now, right? And your wife has been receiving credit for the MQM’s she earned even though you have been paying for the tickets, correct? Well, the new requirement for MQD’s should be the same. In other words, even though you pay for the ticket, she gets credit for the MQD’s earned for her ticket and you only receive MQD credit for your ticket.

    As long as each of you meets the minimum MQM/MQD requirements for your elite status level, you should be fine. Just be careful and make sure you are on qualifying Delta-marketed flights. And remember, these new rules don’t even begin until next year so you have plenty of time to enjoy your travels without any concern about them.

  3. Could you please comment on the AMEX spending requirement of $25,000? I am the primary on our AMEX account, and my husband also has a card on this account, can he get the MQD requirement if: a) the entire AMEX account (cummulative of all cards on the account) reach the $25K spending limit? b) he spends $25K on his card only? Or do I, as the primary, get the MQD credit for all cumulative spending of all cards under my account, whether he spends $25K on his card or not? I guess what I’m really asking is, does he need to have his own account on which he is the primary for him to reach a $25K spending limit to get MQDs of his own?

  4. Hi lalaloopsiland:

    Be careful, you don’t want to confuse MQD with the AmEx rule because they are not the same. For example, if a Gold Medallion has $5,000 in qualifying spend on airline tickets, that would be 5,000 MQD, regardless of who paid for them. If a Delta elite qualifies based on MQD, the AmEx rule does not apply. The $25,000 AmEx spend acts as a waiver of the MQD requirement. Any elite that meets their MQM requirement but fails to attain the MQD amount will still achieve their status level as long as they meet the AmEx waiver amount.

    Based on the limited information provided by Delta, it looks like only the primary on the AmEx account can receive credit toward the $25,000 spend waiver. Seems to me your husband would need to be primary on another AmEx for him to qualify for this waiver, assuming it is necessary because of failing to meet the MQD requirement for his status level.

    If your husband does open a new American Express account in his name, note that not all AmEx cards qualify. The $25K waiver is only for Delta AmEx cards, not the others like the Gold or Platinum AmEx or any of the other branded cards such as Hilton and SPG. Better news, Delta and American Express often have signup deals that may include bonus SkyMiles or MQM’s. Check out Rene’s Delta Points blog here on Boarding Area for the most current offers.

    Carol

  5. Mark says:

    I am currently based in Europe, flying from and back to Munich. As such, my tickets are always priced in Euros. How will this affect my ability to earn dollars?

  6. Great question, Mark, and good news for you… The MQD requirement that begins next year applies only to U.S. based elites according to Delta.com. Those who reside outside the U.S., like you, are exempt. Well, at least that is the rule as of now. If this changes, I will be sure to do a blog update.

  7. [...] added a minimum spend component to qualify for UA elite status. Very similar to the Delta program I wrote about earlier this year, it will also take effect at the beginning of next year. Details about the changes to the UA [...]

  8. William says:

    I earn about 100,000 + miles a year with Delta and have been a platinum medallion for 6 years. I also schedule the travel for other members of my company. I have been with Delta almost exclusive since the early 1990s. I understand Delta’s new medallion flier’s business version meets some bright manager’s business model … unfortunately it doesn’t meet mine. So I will be transitioning my and my company’s business to other air carriers in the near future. It has been a good run but sadly it appears now is the time to go elsewhere.

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