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Having confirmed with three sources, I can report that Delta is planning to announce, as early as September, negative changes to the 2019 Medallion year qualification requirements.
Delta was the first of the major airlines to roll out a revenue-based program for elite qualification. American just this year rolled out a hybrid approach that allows elites to knock out half of the $12,000 in exempt spending requirement by using their Citi CO-branded cards – all the way to the Executive Platinum top tier status.
With Delta it has been a straight forward spend 25k on any Delta CO-branded AMEX card and you are exempt from the MQD required spending in net ticket prices (i.e. not including tax etc.). This waiver currently applies to all Medallion levels of Silver, Gold, Platinum and even the $15,000 needed for Diamond with Delta.
I have been told that for the 2019 year the waiver will only cover Platinum or lower status. This is horrible news for many loyal Diamonds who are somewhere below the huge 15k MQD spend required as part of the requirement to keep their top tier status with Delta and will likely impact their travel (and Amex spending) choices going forward!
United, being United, was the first to not only allow exempt spending waiver up to Premier Platinum i.e. one step below their 1k top status. Delta has always been a leader in the loyalty space ahead of the other major airlines and for them to closely copy anything ugly United does just blows my mind. This will cost Delta and Amex as I foresee, if this does roll out as expected, massive CO-branded AMEX card cancellations (think Costco-worthy dumping numbers of cards).
What can you (we) do about this?
First off this has not yet been announced publicly but I trust my sources and I believe it is on the way unless we make enough noise to stop it from becoming reality. Here is my call to action that could stop this from happening.
Step one is call AMEX (on the back of your card). When they answer ask for a Supervisor as the first person to answer your call is an outsourced nobody. When you get a Supervisor on the line let them know you have heard Delta is planning to change the MQD exempt spend to NOT include Diamond Medallion status for 2019. If that happens you will be canceling your card and moving your mega yearly spend to other providers (think Chase, Citi etc.). Be sure the rep understands the MQD waiver up to Diamond is a MAJOR reason you keep the card and USE the card year after year (maybe even mention how long you have been an AMEX card holder)! Also make sure they clearly understand you WILL cancel the card if this change is implemented.
Step two is write a letter to AMEX as your name on paper matters. Write to the VPs and tell them same thing you have told the supervisor! Make sure they understand you will be canceling the CO-branded card if they make this change. You can find the contact names and addresses here.
Step three is complain to Delta on Delta.com (the link is here). Again, tell them you have heard that Delta is planning to change to the MQD exempt spend to NOT include Diamond Medallion status for 2019 and if that happens you will be looking at other airlines for the 2019 flying year. Let them know it is harder and harder each year to remain loyal to Delta with all the changes but this would be the final nail in the coffin to drive you to book with other airlines and even as a HUB city resident.
Step four is to also write the Delta VPs and tell them the same thing you mentioned on Delta.com. Again, real paper in the mail with your name on it will have an impact. It is up to you if this matters to you to reach out and let them know. Again, the contact names and addresses are here.
I believe we can get ahead of this, and with enough of an outcry, maybe stop this planned change from happening and help them realize what a stupid idea this is and how much money it will cost BOTH companies long term. Delta’s President Glen Hauenstein just last week told us about the Delta / Amex CO-branded cards:
“I think that’s one of the successes of our [co-branded Amex] card in the marketplace is that there are incredible value propositions for customers out there who acquire and use our cards, and we have no intention to degrade the total value proposition.” – bold mine
If this change happens clearly this would be a MASSIVE downgrade of the “total value proposition” in stark contrast to what was said just days ago by the company president! Right now Delta is one of Amex’s top CO-branded partners. Likely this will change that to no longer be the case if the MQD waiver to Diamond goes away.
Also, when Amex and Delta learn huge numbers of card holders will cancel due to these proposed changes from Delta – Amex may let them know they are not happy with this stupid follow United Airlines bad elite formula.
It is now up you (and me) to ACT and to let them know how we feel! – René
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Thanks Rene! I’ve posted link to this over on FT. Hopefully enough people will take heed of your warning & follow your contact suggestions.
@Bob – Thanks so much for spreading the word!
” This will cost Delta and Amex as I foresee, if this does roll out as expected, massive CO-branded AMEX card cancellations (think Costco worthy dumping numbers of cards).’
Amex lost millions of cardholders when Costco left. Here we are talking about thousands or maybe tens of thousands of customers impacted by this. My suspicion is in due time those high time flyers who are not spending enought money will fall into 2 camps:
– Those who leave for AA – grass is greener (for a year or so)
– Those who decide they can live with Platinum vs. spending maybe 2x with Delta to retain Diamond
Little to do here on fighting City Hall on this one. Delta are moving to an emerging industry standard. They only question I have is what will AA do for 2019.
@Mike – “Little to do here on fighting City Hall on this one”
I disagree. We have a tiny chance to stop this if we reach out.
Rene, please clarify. This change would be effective for the $ we spend in calendar 2018 for status in 2019?
@Rick – This will impact that 2019 year. Thus anything after 1JAN18 yes. Not the current year 2017 for earning 2018 status.
While I doubt this affects people like me this possible change strikes me as really dumb.
Whom will this change affect? Delta’s most highly valued flyers: Diamonds.
Even Delta can’t/won’t be this penny-wise and pound-foolish. Or will they?
Alienating their absolute best clients and copying United in one swift move?
Good lord.
Be a tough call for me. I’ve been using the reserve to top up MQM’s versus using the waiver outright to get Diamond (lots of last minute, small town work flying helps cover the MQD).
This would ultimately get me to surely cancel one card I recently acquired but my math after that is more convoluted. For the small number in my group this could be a plus with fewer diamonds to compete with. Though with FCM, if you aren’t buying up on tougher legs you still are at high risk of missing an upgrade as a Diamond. I think the level of complexity mixed with devaluations will drive people away long term ultimately, not devaluations alone.
Good morning Rene, what pleasant news to wake up to. Well this really is aweful news. I will do what you suggest, but if it doesn’t work I will cancel all Delta amex cards and will be done with loyalty. I pay for my own work travel and can find cheaper flights on other airlines and direct flights to where I work that Delta doesn’t offer.
We pass on many travel opportunities that are really cheap to keep earning on
Delta. Guess those days are numbered.
I’m a leisure flyer with well over 200K miles a year on Delta. I hold both the Am Ex Delta Reserve and Am Ex Platinum cards. I will end 2017 with 395K MQMs. Without the Am Ex DM waiver it’s game over for me. I’ll stop frequent flying, draw down my MQMs, and cancel my Delta Reserve card and probably the Plarinum as well. Next Delta will take away our rollover MQMs.
The number one thing that kept me on a Delta metal was the DM waiver. This is HORRIFIC.
$15K is not a high barrier to entry for top-tier status. There are far too many flights where there are 10, 20, 30 Diamond waiting for upgrades or crowding PREM boarding. Hoping this thins the herd.
I suspect DL would move to something more like AA’s system, and let you earn incremental MQDs by spending more on your credit card. Delta ia very unlikely to implement this the way you have said. I wonder if moving to another country will still work?
@Gene – My sources tell me the plan is just as I have stated. However, I honestly very much like the AA system. I agree that knocking 50% of the spend out for each level via some number of DL AX spend would be a smart change and a fair one. I would not gripe about that at all.
I haven’t yet pulled the trigger on my 2018 DM and PM Choice Bebefits. Too bad I can’t choose 28 RU Certificates on January 31, 2019.
@Wayne – You can wait till the last day of Jan 2019 and select RU or GU certs and they will be good for 1 year and even if you drop from DM to PM you will be able to use them and trump DMs for UGs.
A second reason to move to Canada!
I welcome this change. I am all for the highest loyalty tier to only be earned by BIS flying.
@Robert – It is not just about BIS flying it will be about BIS spending. But happy that you, or your company, spends over $15,000+ net in ticket prices each year. Yes this change will benefit you.
Now if massive co-branded AMEX credit card cancellations impacts $DAL that is another story.
Thin the herd…
You forgot Step 5. Suck it up and keep being told by Delta what the rules of the game are. They never cared about customers so it won’t change anything if we complain.
@Santastico – They care about the billions they get from Amex.
I am so far at $27k spending this year with Delta and only 77k MQM. I am probably on the wrong side here spending too much for not enought MQM to reach Diamond. 🙁
I guess that I have to agree somewhat with Robert. The 25K waiver was way too low. Being Atlanta based the upgrade lists are completely ridiculous. I actually stayed with AA here since I would rather have one stop with upgrades than barely being able to get E+ sometimes.
I actually like the AA system. I can get incremental EQD through spend.
The incremental revenue for Delta for 25K spend on a card is what? Perhaps $300-400. Not a hard choice when they have the analytics that shows them the average revenue of the 25K waiver people compared to non-waiver people..
Honestly I’d say this probably makes deltas ultra elites very happy. Because they probably just hold the reserve card for the tie breaker but spend and fly enough for the diamond status outright.
This will allow them to compete with other big spending business travelers vs churners that have been able to ‘game the system’
Sure this will alienate some but I feel that it may strengthen the loyalty of the ones delta really wants, the ones who pay and fly.
Granted I think an easier way to not ruffle feathers and keep Amex and their consumers happy is just accept more people to their 360 program, or create a new ranking system that puts how much MQD you have at the very top of the tie breaker list, then you have the big spenders winning tie breakers and people like yourself still very happy with their status above all the lower tiers but knowing that the big spenders beat them on a tie breaker.
It’s an interesting move nonetheless, and I am very intrigued to see how it plays out for them. The biggest deciding factor will be how much of a fight Amex puts up
@ Alex –
Totally agree. One of the things I love about the new AA system is the EQD ranking for upgrades. I fly a lot of BA premium economy which gives be great eqds. I am way over on eqd and still trying to catch up on eqm..
I can assure everyone this is true and a negative change being implemented. I recently participated in a focus group for Delta DMs only (in-person) and they asked about two pieces of emails that talk about this change and asked for DM feedback.
So I guess I can be René’s 4th source on this breaking news.
@DL DM – Thanks for data point. Yes, this will happen if we do not let them know we are against it!
It’s a huge bummer for me personally, but it would be disingenuous of me to say that Delta will be worse off even if I cancel my credit cards (which I will). They make so little money off me that it’s in their best interest to do this.
It is funny (and also sad) to hear many happily cheer “Thin the herd.”
The vast majority of those folks are making spend requirements on the company dime. And delta hopes others will now see the benefit (to the employee not the employer) of elites getting their employers to spend more.
The “thin the herd” crowd fails to realize that if this devaluation is successful delta ain’t done thinning and that they maybe culled in the next round. No matter how much you (your employer) spend, there is always some group that is more profitable who it would be in delta’s interest to reward instead of you. Thin the herders should yuck it up while they can. They are next.
Delta already has the largest MQM requirement for top tier, and now they’re making top tier even harder to attain. It couldn’t continue making these cuts if there was competition. But since there is an insufficient amount of competition, there is no limit on what they think they can get away with. Alaska is looking better and better. I hope it finds a way to expand its network even more.
Rene, you have proposed a good course of action. I plan to follow it. If we are unsuccessful, then bye bye to my delta Amex cards and likely all delta travel.
Great news form Delta! Thank goodness! ITS ABOUT TIME!
People getting a shortcut to status through easy credit card spend are not ‘high value flyers’ that DL wants to keep. You’re dillusional if you believe so, hence the change.
@Chase – High spending AMEX customers are of great value to AMEX who drive mega money (in the billions) to Delta. Anyone who does not understand this clearly does not listen to / read the quarterly earnings reports.
I wrote in Delta, complimenting them of this change. As a big spender and seeing MASSIVE upgrade list filled with Freebie Diamonds! YEAH! Think the heard! Spending $25K per year on a CC = average.. Flying 125,000 or more with no rollover and spending $15,000 per year or more solely with one company – deserves top status. YAY for less Diamonds!
@Rene – The money Delta will lose form people cancelling the card will be nothing compared to the money they lose by comping Diamond Benefits.
$25000 spend – they earn a whopping $300 MAX! (and thats form the sale of miles so they still have miles on their books) How stupid that they gave away Diamond status for that.
More reason to give up loyalty and take whatever fight you want. Alaska here I come!!! 2018 of course.
@rene July 17, 2017 at 10:26
I am very sure that someone has done the revenue data analysis on the +$25K spend diamonds and the extra CC revenue. This is not hard data gather. They obviously have made an internal calculation as to what “Diamond status” costs and that X>Y so therefore we will make changes. IMO, if they don’t do some type of tiered system like AA or perhaps tiering spend (Say $25K for gold waiver, $50K for plat, $75K for diamond) someone is leaving $$ on the table.
@eds1830 – The math they can not do is how many will cancel AMEX cards over this and massively reduce spending with AMEX and thus impact $AXP stock and thus in turn hurt the value relationship with Delta and co-branded cards.
@Rene Actually they can do most of the math. Worst case scenario, every person who has any AMEX co branded card that got a spend wavier on MQD that resulted in them getting diamond status. Take the spend of those people on all co-branded cards they hold and figure out revenue loss from the CC spend if they cancelled everything. Then add some factor of 3-5% for cranky people and spillover. Then look at the air travel of those people and take some % that will stop flying with Delta. Now, how it effects the AMEX relationship is another deal, but with AMEX bleeding co branded business vendors, I am quite sure that they will just take whatever beating Delta will give them.
@eds1820 – I would have you listen to this report about $DAL and pay attention to the estimated 50-60% of Delta earnings is from AMEX! https://t.co/jlpxmie2Q9
My wife and I are leisure travelers who both hold reserve personal and platinum business cards on which we spend $60000 and $50000 each to obtain the extra 50000 MQM each to maintain our diamond status. We only spend about $5000 on Delta flights so I would not make the cutoff on this new system and would certainly reduce my loyalty to Delta. The idea of a tiered system of credit card spending would seem to be a balance that would reward business flyers who don’t pay for their own tickets and spend $15000 on flights and those of us who spend our own cash both on tickets and credit card spending, The single limit of $25000 applying to all levels is from a different time and a tiered system of credit card spending is more appropriate.
I can’t say enough of what a relief this is. Hopefully this finally makes Diamond feel more exclusive.
I would hate for them to do away with the MQD waiver completely for DM. I wish they would just increase the Amex spend waiver threshold to $50k or even $75k. That is a lot easier for me to hit than $15k MQD.
Relocating my address to a foreign country would also be easier as well.
@JNS – Keep in mind that if you do move your address to avoid the MQD spend requirement, and they audit you and you did not really move, they could close down your SkyMiles account. Just know this possibility exists for anyone who thinks that will be a simple fix or workaround.
Here is a math question…
Let’s say I fly 135,000 MQMs but only spend 10K in tickets. I stay Platinum I know. But…
HOW MANY MILES ROLLOVER JANUARY 1? 10k or 60K?
@Jane – You will rollover every MQM over the lowest dual common denominator.
Am I the only Platinum who thinks I’ll get more upgrades now that there will be less Diamonds?
@Jane – Yes 😉
HA! A girl (who now — thanks to DAL — will never be Diamond) can dream can’t she?!?!?
@Jane – 100% you bet. May all your upgrades clear!
@Sally – I was thinking about that…
If this happens I’ll likely get rid of the Delta card for another co-branded Amex.
I shake my head when I see the “Yeah! Thin the herd!” comments. Not everyone “games” the system to the extend you may think. (To piggyback off @John’s comment, a big chunk of my Delta spend is from job-related reimbursements.)
1. Do you really think Delta is doing this because they’re concerned about your feelings and making you happy? Please. This will only fuel Delta’s FCM efforts. I assume you won’t be upset trudging to your C+ middle seat and past John & Jane Doe (infrequent, free agent travelers not caring what status anyone holds) who upgraded to first/biz for some low price — and took your free upgrade. Because Delta valued a few more bucks over the business they knew they knew you give them anyway. But, hey, at least the herd was thinned and you showed the “fake” Diamonds.
2. When people cancel their Amex cards over all this, Amex will use this as an excuse to raise their annual fees. That’s just business 101. The herd was thinned — someone has to make up for the herd’s lost income.
3. And then when Delta can’t get as much money from Amex as they currently do and the herd’s business went elsewhere or decreased, Delta will use this an excuse to raise prices. When your boss sees how high Delta prices have gone, are you 100% positive she or he will still let you fly DL? (Or if you’re a company owner, will you be able to afford the airfare hikes?) Or will you be hearing something like, “Y’know, I think you need to give this Spirit airline a try. Or, hey, wow! Look at all the money we can save flying Allegiant! Have you ever heard of them?”
But at least the herd was thinned, right?
@Chris C – I was gonna post a follow-up but may just re-post your comment 😉
It is rare for Delta to care what card holders might think. If they plan to do this I see nothing that will change that. The card holders will definitely be impacted and I am sure some will leave
NOOOOO!
bye bye:
GUCs
CLEAR Membership
shiny metal brag tag
After digging through the delta 10k and footnotes for the last couple year I found a couple of interesting tidbits. 2012-14 Delta sold $675M worth of skymiles to AMEX. In 2016 passenger revenue was $33.78B and revenue from loyalty programs was $1.78B. About twice as much as baggage fees and about 30% of ancillary revenue. The 50%+ earnings numbers come from extrapolating some type of numbers from the ancillary revenue earnings of ~$3B. I would venture to guess that there is a bunch cost for the skymiles program buried in operating expenses across the business. There are a lot of ways to massage those numbers. I am sure that the internal reimbursement rates for tickets is artificially low considering that according to the 10K over 7% of miles flow are through awards.
How many cardholders would have to cancel their cards for either AMEX or DL to feel the pain? I suspect only the total divorce of Delta and AMEX would make AMEX feel the pain.
The better way for any change to benefit Delta, and hurt less people would be to have the waiver changed to a tiered structure.
$45,000 for Diamonds
$35,000 for Platinums
$25,000 for Golds
Or some such equivalent. I don’t know why the “thin the herders” are so happy. It is not like they are getting that many upgrades anymore anyway. And DL certainly isn’t wide open for the GUC’s. They are getting almost impossible to confirm before the day of departure. I really don’t see how this would benefit Diamonds or their companies who spend $15,000+ on airfare. Currently Platinum AMEX card holders get into the lounge, so that won’t be thinned out. DL’s goal to basically sell out FC before day of departure is almost there. And giving any amount of choice benefits to a Diamond does not diminish another Diamond’s worth, status etc. So seriously this potential change may benefit DL, but it won’t benefit AMEX or other Diamonds.
@Sally – There is much logic to your comment. Delta has a tiered MQD spend levels – why not have some kind of tiered MQD exempt spend levels as well? Not saying your numbers are perfect but I like the idea itself.
Chris C pretty much nailed what I was going to post – thanks!
But I’ll add this – I have fallen into the WFBF category in recent travel. Forget the complimentary upgrades as we all know those have become difficult at best. Forget the buy coach and take the buy upgrade (FCM) too. I’m solely in charge of my small business travel and I can purchase and damn seat I want. I do just that most often.
GUs are pretty much useless to me as my international travel at this point are award tickets (and mostly DL but not always). RUs have been hit and miss unless I call the DM line and have them search for availability so when the cert is applied the upgrade is instant. I simply don’t have time to keep watching flights and making sure the upgrade instrument works properly.
I do value the DM line as for the most part they are really helpful. I appreciate the ability to redeposit award tickets as well. Clear is a nice perk and SkyClub Executive is also nice but I can work around that with properly placed SO or employee credit cards.
I might make 15K in spend this year (I know it’s not needed THIS year) and I am sure with the WFBF attitude I can make it next year but at this point the key to me is how much I spend on DL Amex cards. I’m on track to hit nearly $500K spend across Amex cards this year. Same last year, and even more the year before. Unlike Rene I did overspend on my Reserve cards because I have suppliers who keep the card on file and I was not on top of the cut off and switch to another card. Whatever, I am spending it no matter what and although that spend would have been better placed elsewhere I racked up a few more DL miles I could throw around like a patron at a strip club I guess (or like a silly SkyMiles member buying drinks in the SkyClub).
How happy do you think Amex will be if I pull that kind of spend and take it to another bank – like Citi or Chase or Barclay? Do you think I might not be the only small business owner who wants to see some kind of perks for this level of spend?
So go ahead and thin the herd. I will continue to fly DL (because quite frankly the other 2 domestic options suck). But I will also be sitting up front sipping my pre departure beverage as the fewer but prouder DMs walk by me to their Comfort Plus seat. Enjoy your victory but good luck getting the seat. Good news is there will be less DMs walking by me on the way to the back and therefore less cowbell metal tag clanks. Cool.
If this change goes through, I’ll cancel my 2 reserve cards and will move the spend to Chase Visa cards. I can make platinum no problem. I have enjoyed the Diamond status and used the Reserve cards to make the leap from Platinum. Spent an easy $500k over the past 3-4 years on the reserve cards to get the MQMs in addition to the waiver. Not sure how many there are like me, but if there are 5000 of us who use these cards for the same purpose, then subtract $2.5 billion in Amex spend over the next few years.
@rene, thanks. I initially had the numbers higher, but why not start out low and see how it goes. I think this would be a great compromise if Delta ends up doing this. The other problem that I foresee if something like this gets put into place, is those of us that have 2 reserve cards, putting $60,000 on each for our MQM bonuses. If DL came along and said the waiver for Diamonds was anything higher that $60,000 would AMEX let the waiver exist over multiple cards? Food for thought
@Jane, you will just have thousands more Platinums with possibly half of them keeping their Reserve cards and keeping you behind them in the upgrade standby line
I spend over 200K on my 2 delta reserve cards each year. Probably closer to 300k next year. But only hit about 13K in MQD spend per year. I have only cared about status for the last 3 years and have already 800k MQM’s. I will absolutely switch to AA and cancel Delta cards if they make this switch. I dont even live in a delta hub.
Heres the thing- I usually only fly maybe 12 times per year, most of the time in paid first from atl to HNL. I hoard the GUC and RUCs and most go unspent. so Delta isnt wasting much money on my perks. But I will absolutely switch to AA if they make this switch.
Rene:
As interesting as all 60+ comments are, Delta employs a small army of economists, econometricians, psychologists, behavioral scientists, etc. — and they have crunched the numbers on this! They are doing this because it is MORE PROFITABLE FOR DELTA ALL THINGS CONSIDERED!! They are smart people. You may not like their decisions, but they are smart enough to make decisions that are profit-maximizing to Delta. They have considered your anger, moving airlines, ripping up cards, impact on loyalty, impact on card spend, etc. in their analysis, and they are still doing it!!!! Sorry, but the math speaks for itself. They have run many scenarios, and this is the one that is profit-maximizing!!
@Mark – Time will tell. You seem to say they never make mistakes? That is amazing.
I like the proposed changes but that said smart people make poor decisions all the time. A decision is only as good as the model constructed to make it. Delta has made plenty of dumb decisions in the past.
@mark Why do you say it is more profitable? I dont see many scenarios where DAL revenue doesn’t fall. and since costs are =, its more “profitable” to keep the same.
Delta revenue would only climb if people actually spent more on delta.
but they would lose people like me, so probably net revenue fall.
I spend about 13k in MQD per year. 200K+ on reserve cards.
AND I live in an AA hub.
I really hope delta comments on this soon, because even a lack of comment will get me to apply to an AA card this week.
@Even – If you go for Citi AA cards I hope you will consider out links 😉 http://www.RenesPoints.com/cards
Executive offices of AMEXCard reached out to me after I sent them an email as you suggested. They have stated that they have not heard anything about this and were deeply appreciative of the info. More if you want to email me at the email you have on file for me
@Sally – Thanks for your efforts. I am reasonably sure Delta has not yet dumped this news on their trusted partner Amex yet. 🙁
@rene, your welcome for the efforts but the Amex person also told me there was maybe 1 or 2 tweets on the subject from people, but apparently I was the only one whose email caught their attention or even wrote an email. If that is the case then your unhappy followers are not taking your advice. I hope they do because AMEX took this seriously enough to do some research and call me. Please reiterate that we all need to call and write. We vote with our wallets and I told them that.
@Sally – It is VERY hard to motivate anyone to action even when it will deeply impact them. The post has been viewed over 10,000 times and yet just over 100 have clicked to get the addresses to contact Delta or Amex. Clearly even fewer have take the time to mail: https://i0.wp.com/renespoints.boardingarea.com/wp-content/uploads/2017/07/clicks-to-get-the-address.jpg?w=826
I am a DM and spend about $12K a year with Delta and earn about 150K MQMs, including 30K MQMs from the Delta Reserve card. Almost all my travel is ticketed through Delta. The last couple years I have shifted to buying First and Delta One at the lowest fares I can find because I do not want to risk being in economy. I only use the global and domestic upgrades when I can confirm when I buy the ticket, and I do not care much about the complimentary upgrades.
This change will give me the impetus to get off the hamster wheel. I figure all I need to do is keep Gold status for the SM redemption flexibility. I expect I can drop the Delta Reserve card, and move a certain amount of First and Business class spending to other airlines based on cost and other factors. I am really looking forward to flying more on Jet Blue Mint.
I doubt that I will even contact Amex or Delta.
Rene: They absolutely do make mistakes and at times course correct, but they have run every conceivable sensitivity analysis to make this decision, so a mistake a quite unlikely (but certainly not impossible).
Evan: I am not smart enough to do all the math to prove it is more profitable, but Delta employs dozens/hundreds of people who specialize in this exact math!!! They have massive data sets, have done focus groups, have anticipated this severe/intense social media reaction — AND THEY STILL DID IT!!! It must be profit-maximizing math, in their view!!! Do you think they are making decisions that result in lower expected profits, in their view?
@Mark and @Evan you say they still did it. NO they haven’t It hasn’t happened yet. This is still in prep stage from what Rene is saying. It is still unoffficial. Sometimes focus groups make people change their minds. I used to work in advertising (25 years) and we used focus groups to determine course of action. I’m not saying there is much of a chance in hell that they will change this since they are at the point of official research with consumers. But there is not a 100% confirmation yet. SO…do what you can to try and let Delta know that you don’t accept this! And maybe?????? We can all try to make change. Or even adjustment. I feel that tiered AMEX spend is totally the way to go. But that is me. It would be a test to see how things work before taking such aggressive action. Not that they have been so thoughtful before. :/
My two cents.
We need Alaska Airlines to start a hub on the east coast!!!
Or some new NON ULCC competition. Southwest should build up Charlotte and strengthen Raleigh, Atlanta, DCA and SAV.
My letters have been sent. I don’t know if it will help or not. But I have done my part.
I realize this is business but if it were a situation involving bullying, choosing to be a bystander NEVER helps the victim. Silence ONLY helps the bully. I am not suggesting that Delta and Am Ex are bullies but I am saying that if you are unhappy with this change your silence will only help Delta and Am Ex.
Get involved. Use the links René provided. Write.
The arrogance of some people is amazing, especially since many of their high-dollar spend is coming from their company or clients — not their own pocket.
I work as a consultant in the public and non-profit realms. I have to buy the lowest, non-stop or one-stop economy-class ticket. I can only get creative and “play the game” when I’m traveling for leisure or moonlighting.
I have legitimately flown 125,000-plus butt-in-seat miles for the last four years. I’ve only cheated on Delta a handful of times, all short domestic hops. Some years I’ve hit $15,000-plus thanks to some international travel in paid international business-class. Other years I’ve come in at between $10,000 and $13,500. I keep diamond because I generally get the MQD waiver — spending around $50,000 per year on my Delta-branded Reserve card.
I get there’s a small sub-set of Delta elites — some of whom may not actually be diamonds — who pay $7,000 for international business-class tickets upwards of a dozen times per year on top of domestic travel. While I understand their frustration that I’m somehow not worthy this is a dangerous precedent to set. If Delta really needs to reward those who spend $20,000, $35,000 or $50,000 per year on airfare then bump them into Delta 360. Diamond is diamond. If you have to, get rid of the MQMs for the Reserve card spending but keep the MQD waiver.
Am Ex will be the biggest losers if this does happen.
I have a business and personal Am Ex reserve and Platinum Am Ex cards and put $220K in between the 4 for 100K MQMs. Makes for a nice rollover every year. If they eliminate the waiver I’m going to probably cancel both plats and the business reserve and keep only the Personal reserve for Sky Club access and to get the platinum waiver. I’ll put $30K on for the 15K MQMS and to meet the PM waiver then the card will not get used for another year. Am Ex is going to be missing out in annual fees on three cards from me as well as $190,000 spend which will go to Chase or Citi where the rewards are worth a lot more than SkyPesos.
I think Am Ex is the one we should be mailing the letters to not Delta. It’s going to hit Am Ex in the pocketbook more than Delta if this occurs.
I could be missing something here, but wonder how significant the account fees are to AMEX?
If a company or person puts in big yearly spends, pays them off when due, thus no interest charged, but gains all the bonuses, how valuable would they be to AMEX?
That’s how I use my credit cards and I’ve always thought of myself as someone a credit card company wouldn’t want…?
@MW – Most people think micro of what they do. You need to think big picture. Annual fee’s, transaction fee’s, those who foolishly carry a balance and on and on all add up to HUGE money for AMEX. It is the total bucket and total picture than matters. Does this help?
Thanks Rene– Makes sense!
It’s been really amusing reading all the comments. Some thoughts:
1: I’ve now learned a new definition of chutzpah: Someone who gripes about “free riders” while flying on someone eles’s dime.
Do you pay for every single one of your flights out of your own pocket? No? Then you are the DEFINITION of a “free rider”
2: If you think corporate analysts are super-human beings who understand everything, and get everything correct, you are a nut.
3: When I made Diamond with the help of my MQD waiver, I spent $85k on my Delta Amex cards that year. Babbling about $25k, as if that’s all most of these people are spending, is stupid.
4: The stars were lining up for me to make a push for Diamond in 2018. Translation: lots of spend on Delta branded Amex cards, and some mileage runs (translation: free money for Delta, with my wife & I paying for, and filling, seats that otherwise would be empty).
5: Most of my flights are at 12 – 15 cents a mile. However, I get a bunch of MQMs from putting money on the Delta Amex credit cards. The point of the MQD waiver is to encourage people to do that spending.
6: I flew into MSP yesterday morning. Went to the Sky Club, every worthwhile seat was full. Happily, I have a real AmEx Platinum card, too, so I went to the Escape Lounge (free with the Amex Platinum & a boarding pass), and got better food in a space that wasn’t cramped or crowded.
So I won’t be ditching Amex if this change happens. But the Delta Amex cards will be a lot less valuable
@Mark: Your analysis is only as good as the underlying assumptions.
The claim that any business analyst is going to get all the assumptions correct is, frankly, ludicrous
@GregD: Well said.
I’m a little late, but has anyone suggested counting SkyMiles spent at $.01 per SkyMile as part of the MQD calculation? This wouldn’t fix the waiver issue, but might make it a little more palatable for truly loyal flyers who would only reach $15K if SkyMiles spend counted.
This will almost certainly end my loyalty to Delta. It will be the push I’ve been looking for to cancel my Delta Amex cards and just book the flight with the best time/route/price for my needs. Hell, if JetBlue had a bigger presence in CLT or ANY presence at GSP, I would already fly with them instead of Delta anyways…
@Nick: I’m in the same situation consulting for nonprofit clients. The MQMs are not the issue, but I usually come in around $12,000 a year in MQDs.
If Platinum is as high as I can get (after downgrading my Delta AmEx from Reserve to Gold), why would I keep flying Delta after 75k? I could fly the other 50-75k on another airline and have decent elite status on two airlines each year. That would at least give me more flexibility when it comes to schedules. I thought the point of an airline loyalty program was to encourage and retain loyalty to one airline. A change like this would seem to have the opposite effect — at least for some business flyers.
I e-mailed Heidi Gould, manager of customer care at Delta, using the link you provided (along with every other e-mail posted). I am a non-hub traveler that has gone “all-in” on Delta this year to earn Diamond. I may come close to the spend requirements, but I planned on earning Diamond via the the Amex MQD exemption. I purchased the reserve card & platinum card ($80k+ spend). In my e-mail I expressed concern with the news and that spend would be shifted to more lucrative cards where appropriate and I would likely take the most convenient flight when possible (directs on another carrier vs. Delta via a connecting flight). I don’t have any issue making Platinum, but I have to stretch for Diamond via mileage runs and shifting all spend to Delta Amex cards. Heidi had someone else reply on her behalf. Below this the reply. This non-response response concerns me that this news is real. Everyone keep fighting for this. To earn Diamond as-is takes a lot and we played by the rules – we have earned the Diamond Benefits. If they want to be rewarding the ultra-elite, move them to Delta 360 as someone mentioned. If they aren’t making the profit off someone that earned Diamond as designed, they structured the program wrong long ago. Unfortunately we are put in a position that we have to speak with our pocketbooks if this happens.
“Heidi Gould asked that I reply on her behalf.
Thank you for your feedback on the American Express MQD Waiver. Please know that we take it to heart and sincerely value what you and all of our customers have to say. We are constantly evaluating our program benefits and features, including those of the SkyMiles American Express credit cards, and will take your feedback into account when making future program decisions.
Thank you for your continued loyalty to Delta. We appreciate your business and look forward to seeing you on board soon.
Best,”
Since Delta is “copying” United’s MilegePlus plan – will they also reduce Diamond to 100,000 MQMs and $12,000 Spend? 125,000 MQMs is already difficult enough to achieve with or without the waiver. United Premier 1K will be much easier to achieve and you get 6 global upgrades – might be time to switch if this happens.
@Brent – No. They want less DMs not more. It seems too many loyal customers who go out of their way to fly Delta is a bad thing. They would rather have folks spending money on other airlines for some strange reason. I don’t get it.
Rene…..do you have another address for Greg O’Hara…..I keep getting a bounce back when I sent something to his e-mail address.
@Jim – I do not and those are Chris Elliotts links. You can let him know that one is bad.
I spend roughly 35k a year on Delta, so it’s kind of nice to be given a higher status for that spending vs credit card spend and low cost flying.
You can’t compare credit card revenue Delta receives to actual airline spend…
@Ryan – Actually you CAN compare and it will shock you by how much (think 50-60% of earnings – yeah THAT much): https://www.msn.com/en-au/video/news/delta-quarterly-results-largely-in-line-stifels-joseph-denardi/vp-BBEkOK6
The more I think about this, the more conflicted I get.
Yes, it would be nice to be DM again.
But the reward for spend on the Delta Amex credit cards sucks, and mileage runs aren’t free. Realistically, if Delta wants to tell me “don’t spend the money and time to rack up the extra 50,000 miles to make DM”, I don’t know that I’m really worse off.
Now, Delta’s definitely worse off in that case, because the money I spend getting to DM goes directly to their bottom line (CC spend, and buying seats on flights that aren’t full), whereas the cost to them of the DM benefits I’ll get is pretty close to $0 (if I get an upgrade, it’s to a seat they couldn’t sell. I get into the Sky Club w/ my Amex, so giving me “membership” is a no-op. DM & PM get the same baggage deals).
Yes, the DM benefits let me compete with DMs and PMs who spend more than I do. So?
Pro-tip kids: If you’re so low ranking that a mere DM is competing with you, Delta doesn’t give a damn about you.
So, my heart says “Delta, don’t do it! I want to be a DM again, and I’ll pay to get it!”
My head says “Chase gives better rewards, as does Amex Platinum, mileage runs cost more than the stories they generate are worth. By all means, Delta, please keep me from making a bad choice!”
🙁
Adding a data point here. I received a call this morning from Amex Executive Customer Care. The lovely (really, she was — couldn’t have been nicer) woman said the Elite waiver matter is a rumor, there have been no announcements made (boilerplate), and she personally hasn’t heard anything of the sort.
I asked her where she thought the rumor started. She said “the Internet,” and then listed a couple of other rumors that were, apparently, only that.
She added that Amex has received “a lot” of correspondence pertaining to the waiver matter and assured me it’s a “rumor.”
She really stressed the word “rumor.” But also a few times said “no announcements have been made.”
Delta started the rumour with focus groups! Where they told people about it. Perhaps they have yet to tell AMEX.
@Jane – Keep in mind Delta 100% blindsided Amex with the change from Flyer+2 for Sky Club access with co-branded Delta Amex Reserve card. At least we have been kind enough to alert Amex about this one! 🙁
All –
Frequent Flyer programs were put in place to make money. As many of you point out they do make money. What you miss is the costs associated with these programs. Yes there are real costs and then opportunity costs.
I don’t know where most of you are flying but I fly out of a Delta hub. I don’t remember the last time there were empty seats waiting to be filled by hoards of travelers using frequent flyer miles. This is confirmed by many people complaining they can’t use their miles. Or the bumpertunities from oversold flights that some people love. I remember the good old days when I signed up for the Republic Airline Frequent Flyer card and was awarded a free ticket when I signed up. I was in college and flew immediately. It was my only flight ever on Republic as Northwest bought them a few months later.
“Free” Upgrades are not free for Delta and why would you give them away when you can sell them? I have never seen a credit card link to a local credit union on a blogging site when you can have a link to Amex that pays you. Why wouldn’t Delta sell FC seats? I think you are missing the point that Delta exhists not to provide you frequent flyer benefits but to provide their stakeholders a return on their investment.
So what’s my point – in the early days of frequent flyer programs, the thought was if you provided great incentives then consumers would be loyal to you. I would still be flying Republic from the goodwill of their free flight back when dinosaurs were still roaming the earth. However frequent flying programs evolve and Delta is quite good at changing. I am sure someone at Delta has done the math rightly or wrongly depending upon your point of view and Delta seems to have strong financial skills. Unless Amex has the most inept attorneys ever, someone at Amex also knows (as I am sure a change of this magnitude would likely be contractual) and they have also done the math.
So the gamers who are proud to game the system will need to figure out the new rules to game the system again. I have complete confidence you will. Or if you don’t work for a company that pays for your travel to earn Diamond status then go get a new job that does.
I have changed jobs and I am traveling significantly less. I have been Diamond since it’s inception (over 2.5 MM) but only made Platinum this year and will likely only be Gold next year. I don’t have the time or energy to play the game but I am enjoying being at home with my family. Don’t worry about me, I still have plenty of Skypesos left and I have a flexible schedule where I can still get low level awards.
I will miss the UG (I went almost 2 years probably 4 years ago where my UG% was 100%) but unless you pay for UG’s most of you will as well.
Good luck with (Un)Comfort+ that will become the standard UG in the future.
Just got the email. To be clear, you can still get a waiver to Diamond, but you’ll have to spend $250k. Hahahahahaha. What are the subset of people that will fly enough on Delta to get 125k MQMs, but be short of $15k MQDs, but will be exempt because they spent $250k on their Amex???? I want to meet this person. I don’t believe one person will qualify this way.
I wish I had seen these July posts. Like everyone else, I got blindsided by Delta’s “friendly” email today notifying me of their Skymiles changes! I have the Delta Reserve, Delta Platinum and Delta Corporate Gold cards and I’m a DM. My airline travel and my AMX cards are paid for from personal funds with no “big company” reimbursement. Without taxes and fees, I rarely spend a net $15k. I always spend well into the six figures on my AMX cards, but never approach $250k. If Delta chose to incorporate a reasonable waiver adjustment, I could live with it – but an astronomical tenfold increase is outrageous and will prove to be disastrous for Delta and AMX both fiscally and from a PR perspective. As an experienced and knowledgeable traveler, I have a lot of airline and credit card choices, and if Delta and AMX don’t revise their decision, I will make a buying decision to buy first class on every airline but Delta and a financial decision to cancel all my AMX cards and move to the superior Chase Sapphire and/or Citibank credit cards.
Sometimes the pendulum has to fully swing to remind us why we got here. That may be the case, I think Delta has forgotten why they built the program the way they built it.
I travel a ton (200,000 + miles a year) and spend a ton ($40,000+ a year). So, this program change would “appear” to benefit me, thin the herd as some say…but, it most definitely does not.
Back in the “old” days, prior to rollover miles, when I hit my 75,000 miles on Delta, I would jump ship and start flying other airlines to keep up my status on those. There was a year I was Platinum on Delta and American and 1k on United. When created rollover miles and MQD waivers, I quit jumping ship and mostly fly Delta (I am Gold on United). Why? – at some point my travel will drop, but, if I bank up enough MQMs and can just keep spending on my Amex, I will keep the status. Right now, I am sitting on over 750,000 rollover MQMs.
When I reach a point when I am only flying 50,000 miles a year, should I be thinned from DM back to PM? Absolutely not. Why, because the money I spent accruing those MQMs is way more than a vast majority of the current year DMs who “earned” it.
So, I will quit trying to accrue the MQMs and start mixing in other airlines more. My spend on Amex will drop, I don’t need any more Skymiles and I get the Skyclub for free – my benefits on the Chase Marriott and IHG cards are ton better.
Short term, this might benefit me, the crowd will be thinned, long term….well there isn’t one now. For Delta, as far as I am concerned, it will hurt them. I will cut my flights with them in half and probably drop the co-branded Amex. I may be an outlier that their actuaries already accounted for, but, this move will hurt them, even if just a little.
Today I purchased a nonstop first-class ticket on United. Before the devaluation, I would have taken a Delta flight with a stop, but I can easily make Platinum next year so I can shift some of my spending away from Delta, and I do not need the Reserve card anymore. My Reserve card renewal month is December, so that works out well.
Because of FCM, I had shifted to mostly buying first-class tickets on Delta anyway. I have had pretty good luck buying the cheapest first-class ticket on the day I want to travel and then doing a same day confirm, especially if I call as soon as I can.
The thing I will miss the most about being a Diamond are the global upgrade certificates.
Interesting enough, at least for me, I was looking at posts on various sites about a year ago where FF’ers were posting their MQMs and MQDs vs their AMEX spends. I’m personally a Dave Ramsey fan (for those who know what that means). Getting the spend waiver for an AMEX really tapped me though. I travel for my own company and thus my own dime and need quantity over spend which I know Delta isn’t a fan of. So although I have 180k MQMs easily each year; it’s tough as nails to get to $15k, so I settle with Platinum or even Gold for a year. But with this; I can only imagine what all of those flyers are thinking who posted “$35k AMEX spend, 140k MQM, 5k MQD..but haha I’m DM”. To me and this; it sounds like being DM is really going to go to those who truly truly fly and thus the corporate business traveler.
My thing is though; Delta really has a quality product in terms of their service. Every now and then I hop on American or United for a good deal but they stinnnnk. Premium economy is a ripoff compared to DL, extra leg room and ….crickets.. No extra snacks, or premium drinks, etc. Many cross country flights lack Video on demand systems..just a really sad trip with them.