I reported yesterday that Delta had leaked changes to elite qualification requirements on its website and then quickly removed the information. One suspects just sticking up the details on the web page wasn’t how they wanted to roll out changes to elite qualifying mileage earning for some fares and a minimum spending requirement along with miles or segments flown in order to earn elite status.

Delta confirmed the changes today.

First, it’s true that we’re introducing a new requirement for earning status on Delta for US-based SkyMiles members. Starting January 1, 2014, Medallion status will be earned with MQMs or MQSs and a new threshold – Medallion Qualification Dollars (MQDs). MQDs will be paired with our existing MQM/MQS requirements at each tier level and will include base fare and applicable surcharges (excluding taxes and fees) to qualify for each level.

Silver Medallion – you will need 25,000 MQMs or 30 MQSs and $2,500 MQDs
Gold Medallion – you will need 50,000 MQMs or 60 MQSs and $5,000 MQDs
Platinum Medallion – you will need 75,000 MQMs or 100 MQSs and $7,500 MQDs
Diamond Medallion – you will need 125,000 MQMs or 140 MQSs and $12,500 MQDs

If you have a U.S. Delta SkyMiles Credit Card from American Express you will have the new MQDs requirement waived each year you make $25,000 in eligible purchases using your card.

Second, starting March 1, 2013 we are changing a few of the MQM bonus levels on certain fares. F and J class fares will increase to a 100% MQM bonus and M class fares will no longer receive an MQM bonus. Y and B fares will remain at the current level, receiving a 50% MQM bonus. This change will go into effect for Delta-marketed flights for any purchases on or after March 1 and for OA with travel flown on or after March 1, 2013.

The spending requirement applies to US customers only, counts base fare and surcharges but not taxes as ‘Medallion Qualifying Dollars’, and is waived for customers who put $25,000 or more on a co-branded Delta Skymiles credit card.

Delta has posted a FAQ about the changes.

What somewhat surprised me reading the FAQ is that only purchases of Delta flights or partner flights on Delta tickets count towards the minimum spending requirements. An Air France ticket, credited to Delta Skymiles, will count towards the mileage requirement but not the spending requirement. I suppose they don’t see the purchase price if it isn’t their flight or their ticket. But qualification requirements that exclude alliance activity do tend to undermine the seamlessness of the alliance concept. Although Delta is certainly not the first airline to impose requirements for elite status that cannot be satisfied through partner travel.

A Skymiles member who flies enough to achieve a md or top tier status, but doesn’t spend enough, has an interesting situation with rollover miles. Fly 75,000 miles but spend only $2500? You’re silver. With 50,000 rollover miles, the excess miles over the status level qualified for.

One question in the FAQ I found interesting was,

WHY DO THE MEDALLION QUALIFICATION DOLLARS (MQDS) REQUIRED VARY BY MEDALLION TIER, BUT DELTA SKYMILES CREDIT CARD SPEND IS A FLAT AMOUNT ACROSS ALL TIERS?

They don’t give a real answer to this, but my reaction was whomever is writing these questions please don’t give them any ideas!

Ultimately though I don’t think the requirements are that onerous, especially with the choice to spend with Delta or on the co-branded credit card. T

There are plenty of ways to manufacture spend, and those who aren’t buying expensive enough tickets will have to decide whether status with Delta is important enough to shift Amazon Payments, Vanilla Reloads, funding Kiva accounts, or all fo the other things folks do onto a Delta credit card (with concomitant loss in value of the points earned compared to the points they could otherwise be earning putting that same spend on a Chase Ultimate Rewards card, American Express Membership Rewards card, etc).

The thing to remember here is that changes at Skymiles likely are not over. They leaked early so have made official the announcement of changes to their elite program.

But there may well be adjustments to redeemable mileage earning, and to mileage redemption, and we’ll have to wait and see over the coming months.

Still, getting some advance notice — considering the airline has of late eschewed the notion of providing their members with any advance notice, even insinuating that advance notice of changes to their award chart is illegal — is a positive step. And the changes so far are ones that many members will be able to live with.

I like marrying a minimum spend level with miles flown. It still emphasizes the loyalty concept, it still requires spending a good deal of time with the airline. And the credit card component really underscores that they’re still going after wallet share rather than just gross revenue. So the changes are even to a certain extent responsive to many fo the concerns about revenue-based programs I’ve expressed in the past.

I only hope that other changes still to be rolled out continue to be as responsive!

Final thought: until now I have focused only on the question of How Bad Will the Skymiles Changes Be? But if they are going to limit their elite ranks to only those meeting minimum spend criteria, then I think they actually need to step up the benefits. If you want high spenders, and that’s who you are giving upgrade certificates to, you don’t need to keep low spending elites from using the upgrades. American’s top tier members get international upgrades valid on any fare. United allows their similar upgrades to be used on most fares. Delta requires purchase of nearly a full fare. A revenue-based elite level needs to eliminate that restriction.

  1. Ryan said,

    Gary,

    Thoughts on AA matching DM’s to EXP?

  2. Scott said,

    All I have to say to this is, it’s not exactly a program that will bring any additional revenue to them.

    Maybe if they lowered mileage and raised revenue, but all this does is eliminate elites without really bringing too much in the way of anything additional.

    If it were me flying Delta and maybe I paid $5,000 a year for Platinum, would I spend $2500 more?

    Nope, I’d just fly another airline instead, so now they’re minus $5,000 on the hopes of getting $2,500.

  3. IdahoSt said,

    Every corporate travel office and associated CFO should be outraged at Delta’s move. Will employees direct themselves to higher fares in order to meet these new requirements, of course they will. This will cost major corporations millions in additional cost…hope someone wakes up to this rogue action by Delta

  4. vlpec said,

    I think you are wrong, wrong, wrong in your analysis. Delta keeps taking away. They have upped the requirements for everyone in order to serve their high tier customers better, but they have done nothing to serve them better. Everyone is worse off. The integrated number of silver and gold contribute mightily to the airlines profits, this just says we don’t care just as their incessant flight schedule changes do the same. Frequent fliers need to let Delta know that they do not like this at all, rather than accepting it like bovine in the queue to the slaughter house. Here is a letter I have just sent delta.

    Dear Sir or Madame,
    I am writing regarding the new skymiles program requirements. I am sure that you are receiving many complaints from the ungrateful customers of your airline such as myself that are quite appalled with your revisions to the skymiles program that you plan to implement in 2014. Hence, I’ll try to keep this short. Loyalty programs are not for times like now when your business is good, it is for times when business is bad. It is not just for having people fly your airline, it is for getting them to support or at least not oppose your airline when there is bad press, such as scandals or when you are in labor negotiations. Today, many of your customers understand more fully when your employees comment “on the side” about how “corporate” poorly treats them. In one brilliant, greedy move, you have alienated thousands of your most loyal customers. Way to go, Delta.

    Some background. I am a Diamond medallion, skyclub for life person. I have been a Diamond medallion person as long as you have had the program and platinum before that and a gold before there was platinum. I am about at 2 million miles (gold for life, whatever that is worth). I have seen the consistent increase in requirements for the top tier (50,000 miles for gold years ago to get essentially the same benefits as last year 125,000 for diamond and next year 125,000 (weighted miles no less)+ credit card money) with consistently diminishing benefits for the lower tier (they may say they are the same, but upgrades for someone Gold, c’mon as a Diamond I often do not get upgraded). At the rate I have been going, I might even have hit the 4 million mile mark before or soon after I retire. After today, I doubt that I will be flying enough with Delta to do that, primarily on principle.

    So, if I understand the new rules, for me to maintain the Diamond status I now have, and although AmEx has not posted yet my last 10,000 mile bonus which until today had qualified me for continuation in that status until Feb 2015, I will either need to by $12,500 worth of Delta tickets (if I read correctly excluding tax and other fees) or spend $25,000 on my AmEx card this year. Thus, the benefit I was led to believe I had up until today for doing a helluva lot of flying on your airline just disappeared. A pretty loyal passenger is left feeling as if he just got “you know what” in an “unpleasant place”. Your brilliant MBA or vice president or whomever, has made a very loyal customer royally upset because I feel something of some value has been taken away. Now you say, “Well, all you have to do is spend $25,000 on AmEx and we will remove the MQD requirement”. This is true and I do spend twice that each year on AmEx, so what is the problem as I will again qualify for the Diamond I had qualified for previously. The problem is the principle of this whole thing. You want me to make a wage concession so that I can keep flying on your airline. Next, you are threatening, I say this as when I looked on-line you have not posted your new miles for class of service chart, to give me fewer miles based on the ticket I bought. This is the same crap Air France has been pulling. Why is Air France having business problems? Because all of my good friends that live in Paris (meaning also a lot of others probably as well) now fly British Airways instead since they good fed up receiving little or no mileage credit on Air France flights. If the miles I receive each time I fly are diminished, making 125K gets a lot harder. Now, I am used to my Diamond “benefits” (the main benefit being an upgrade occasionally). If because of this change, I drop to platinum in say 2015 or 2016, I will not say “Gee, I will fly more with Delta to become Diamond.” Instead, I will say, I will fly the cheapest I can since I am Gold for life and use that little perk for what little it is worth using my 800,000 miles for free flights. If that’s Delta, that is fine, if it is USAirways, that’s fine too. More important, I have booked for this year already 3 premium voyageur and 1 business class flight to Europe (not counting two to South America). I could have flown with Icelandic Air all of these flights to Europe in Business Class with them for the same or less money. Let’s see, who should I choose? Especially if I feel that one airline just cut my paycheck?

    You say that you are doing this to serve your top tier clients better. Well, apparently, my nearly 2 million miles with your airline doesn’t seem to qualify as being top tier. OK, fair enough. But you spent the last years since the Northwest merger trying to convince me that I am a top tier customer and now you have told me that I am not. But you say, “We love you, you’re over reacting, this will allow us to serve YOU better, now all the riff-raff that just fly with us, but you will only be with those wealthy folks that spend all this money. YOU are special.” My response, BS. If you are going to serve me better, then tell me specifically how. What I have read is to get the same treatment, I have to spend a lot more money and maybe fly a lot more. With your pay with miles program, you estimate that 10,000 miles is worth $100US. So, your new requirement of spending $12,500 MQDs corresponds to an equivalent of 1.25 million miles! Even if you value your MQD as if it is $1/10 it means you have added a spend requirement equivalent to the actual flown mile requirement! Do you think we are stupid and don’t see this? OK, so you have minimally doubled our qualification requirement.

    Let me now list all the new benefits that I will receive for qualifying at these more rigorous standards: . Well, that was a short paragraph wasn’t it?

    So you’re a business, I get it and you want to squeeze profits. You can’t get anymore from your employees so now it is time to come after the customers (actually the doubling of fares since the NW merger already started squeezing us, but will neglect that point). So let me be a businessman in return. You have renegotiated the contract to your benefit and have the gall to tell me that it was to serve me better. OK, serve me better. What better benefits am I going to get as a Diamond Medallion member? Are you going to remove all blocks of upgradable seats in M class for international upgrades for Diamond members and their companions (you know what I mean, that is offering M class on the internet but not making the upgradable seats available for that class which effectively makes these certificates worthless)? And don’t pull the ponzi scheme that you make fewer M class seats available on flights now. While we’re at it we could let those less important Pt people maybe do the M class thing as well (even if they are riff-raff)? Are you going to allow Diamond members to buy a regular coach seat and at THE TIME OF BOOKING put themselves through the internet into first class for all North American, South American and Carribean flights? Are you going to let Diamond members pay with miles but still accrue MQMs for actually flying those miles? Are you going to force Air France to release upgrades with certificates on their flights to US destinations? I doubt we’ll see any of these benefits for your new “higher tier” customers. Oh, yeah, did I mention my wife has about the same total miles and the same Diamond status as me? And you think I’m upset. As William Congreve wrote “Heaven has no rage like love to hatred turned, Nor hell a fury like a woman scorned”. You probably cannot imagine the power of her reaction…

    I believe your CEO Richard Anderson tells us in the new safety video that Delta “has your back”. He’s correct and he just stuck a very sharp knife square in the middle of it. Way to go, Delta.

  5. Tom said,

    None of you bloggers seem to be commenting much on the way Delta has simultaneously GUTTED the MQM earnings from many economy fares on partners.

    For those who leave the good ole US of A once in a while on airlines far better than Delta, this will really make it harder to qualify.

    Delta’s message here is clear: If ya’ll ain’t rich, we don’t want you. You know what, Delta, maybe we don’t want you either.

  6. Mark said,

    Great thoughtful post (and you kept it tight). :)

    Thank you.

  7. jack said,

    I really dislike the piece of entirely penalizing partner spend … if they can’t see the fare that their partner earned, they could just set a low rate … eg JFK-CDG earns 100% MQD on DL stock but 0.03 MQD per mile if flown on AF stock (non code shared)

    that way it would still incentivize flying DL metal while not entirely cutting out the partners

    I could imagine KE being really pissed.

  8. IdahoSt said,

    Gary the idea that Delta will make anything better for the customer goes against the entire grain of this organization, would you say that 90% of their changes over the last five years have been negative…

  9. IntheD said,

    Do you have to purchase your ticket directly from Delta to count towards the MQD’s? Or can I continue to purchase Delta tickets through other outlets such as our corporate travel agent, travelocity, etc.?

  10. Alex said,

    Whew good thing my status expires this year lol. Off to another airline :)

  11. Gary said,

    @IntheD – as long as it is a Delta flight or Delta ticket stock (which most agencies would be issuing for Delta flights without other airlines in the itinerary) you’re fine

  12. Gary said,

    @Ryan – historically American has only wanted to offer status matches to top tier Executive Platinum for folks who were high revenue as well as high miles. That changed last year with United, they pounced on disgruntled United passengers. And now disgruntled Delta ones as well. I’m curious though since they seem in this case to be specifically going after the lower revenue elites.

  13. ffi said,

    This is to thin the ranks of the over-entitled elites.
    wait, was that from UA/CO?…..
    In any case I do not think this will thin the ranks much.
    Interestingly, one could rollover ~100k with this, with 120k MQM and only 2500$ spend MQDs

  14. dbeach said,

    Awful. Glad I don’t have any interest in getting status on Delta. I bet a lot of disgruntled DL low-rev elites will wind up switching to AS. They can still fly and get credit for flying DL, but also AA and AS. Granted they won’t get many upgrades on Delta, but they’ll get all the other benefits and have more flight options.

    BTW, please, if you are not absolutely sure about the grammar, do not use ‘whom.’

    …whomever is writing these questions please don’t give them any ideas!

    No. ‘Whom’ is objective case; it cannot be the subject of a sentence. Just use ‘who’ and you’ll never be wrong.

  15. Gary said,

    @dbeach … Why? If my readers understood my point, then why is the usage “wrong”…?

  16. dbeach said,

    Well I can write all kinds of things with horrible grammar and still be understood, but that doesn’t make the usage correct. “Whomever is writing…” is grammatically the same as “Him is writing….” It can be understood just fine, I suppose, but it’s still wrong.

    From American Heritage’s usage note for who:
    Whom may sound stuffy even when correctly used, and when used where who would be correct, as in Whom shall I say is calling? whom may betray grammatical ignorance. · Similarly, though traditionalists will insist on whom when the relative pronoun is the object of a preposition that ends a sentence, grammarians since Noah Webster have argued that the excessive formality of whom is at odds with the relative informality associated with this construction; thus they contend that a sentence such as Who did you give it to? should be regarded as entirely acceptable.”

    In summary, just use who.

  17. Daniel M said,

    Gary: I don’t understand your comment that “There are plenty of ways to manufacture spend” to meet the $25,000 spending requirement.” The Q & As explicitly prohibit prepaid cards as a way to meet the requirement.

    From the Q & As:

    What Eligible Purchases count towards the MQDs waiver on the Delta SkyMiles Credit Card?
    Delta SkyMiles Credit Card Eligible Purchases are the total of purchases for goods and services less returns and other credits. Fees, interest charges, balance transfers, cash advances, purchases of traveler’s checks, the purchase or reloading of prepaid cards and purchases of other cash equivalents will not count towards Eligible Purchases. This applies only to Delta SkyMiles Credit Cards issued in the United States.”

  18. Daniel M said,

    Also, are you noticing the disastrous drop in Delta elite qualification miles earned from flying ST partners?

    For example, all KE economy class flights after March 1 will only earn 50% rather than 100% Delta elite qualification miles. So basically not only are ST partner flight purchases not acceptable for meeting MQD requirements (except for codeshare bookings), but also it’s EXTREMELY more difficult to earn MQM on ST partners. You said above that these changes completely undermine the concept of an airline alliance, but I don’t think you emphasized it enough!

    https://www.delta.com/content/www/en_US/skymiles/earn-miles/earn-miles-with-partners/airlines/korean-air.html

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  20. Gary said,

    @Daniel there are plenty of ways to manufacture spend EVEN IF you think they’re going to manage to sort out which drugstore purchases were vanilla reloads or which grocery store purchases were prepaid visas rather than milk.

  21. Gary said,

    @dbeach again I will ask you WHY is it ‘wrong’? It’s not uncommon usage. Meaning was well conveyed and understood. So what makes it wrong? You say the standards I lay out don’t make it correct. What would make it correct then, what standards?

  22. THEsocallededfan said,

    Gary,

    I’d appreciate a piece on what MQM’s have been gutted on partners. I too think the MQD thing is nothing to worry about as I mileage run from home using Reserved card. I’ve heard this partner gutting; so I went and looked at an Allitalia L fare (I recently did this on an IST run) and I still would get 100%, so I am wondering where these changes are.

  23. Mark said,

    @Gary – The standards of traditional English grammar dictate that “whomever” is incorrect in this context. But I don’t understand why dbeach has gone to such lengths to make this off-topic point.

  24. THEsocallededfan said,

    Gary,

    As an FYI, I took a couple minutes and reviewed the SkyTeam MQM cuts here:

    http://www.delta.com/content/www/en_US/skymiles/earn-miles/earn-miles-with-partners/airlines.html

    Basically, if it is not a Eurpean stallwart member of Skyteam (ie Alitalia, Air France, KLM), they literrally gutted the MQM chart to almost a shocking degree. I am not quite understanding how their partners can be okay with this.

  25. jfhscott said,

    These requirements do not seem all that onerous, and perhaps Delta is just articulating that if you want the goodies of status, you have to bring us some profitable business.

    Put in perspective, if all miles earning flights were 5000 mile round trip transcons, the average MQD would have to be $500; if they are 10000 mile round trip TATL’s, the average MQD would have to be $1000, Etc, etc., neither seems unreasonably high.

    This pretty much kills gaining status through mileage runs and through lots of low cost leisure flights. But I submit that people who gain status from such methods are not “loyal” at all – yes, they are clever. But they know how to game the system and fail my definition of loyalty.

    Also injured will be government workers and those who gain miles through travel on low cost corporate fares. Again, these people are INSTRUCTED to take a given airline on a given city pair. There is nothing loyal about taking the carrier you are instructed to take, even if you travel a bazillion miles.

    On balance, I say its fair.

  26. Matt said,

    I completely agree with all the comments on partner spend. It’s a huge devaluation for the alliance, there’s now little incentive for me to fly KE when a non-alliance member has a cheaper flight.

    I don’t object to the MQD amounts, but not allowing partner spend to count is a huge mistake. And the partner MQM cuts are brutal.

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