Delta Air Lines CEO Ed Bastian acknowledged this week that the airline’s massive changes to its Medallion earnings structure and Sky Club visit policies were a little much — and rolled out too quickly.
“We probably went too far,” Mr. Bastian told the Rotary Club of Atlanta, adding, “We moved too fast.”
“There will be modifications that we will make,” he said, noting Delta flyers “will hear about (them) sometime during the next few weeks.”
I don’t expect Delta to backtrack on the changes completely. SkyMiles 2025 is Delta’s ultimate plan. They want status to be earned solely on revenue.
As Mr. Bastian said, his “team wanted to kind of rip the Band-Aid off and didn’t want to have to go through this every year.”
Will “Loyalty” Be Rewarded?
This take is based on:
- scuttlebutt with various trusted sources
- conversations with Delta flyers
- emails I received
- blog comments
- social media posts
- message board posts
Some of those communications need to be taken with a grain of salt. People react emotionally or threaten actions they ultimately won’t take.
Delta’s biggest customer isn’t revenue from flying passengers — it’s from selling SkyMiles and card memberships to Amex.
Let’s play with Mr. Bastian’s analogy about “(ripping) the Band-Aids off.” I think the Delta-American Express relationship is hemorrhaging and needs a tourniquet STAT.
Plenty of American Express cardholders are upset about the Delta changes. The Delta Amexes aren’t anything special in terms of bonus categories. We’re much better off spending on credit cards with flexible points. When Delta slashed Sky Club access and announced the sunsetting of MQM, thus eliminating the MQD Waiver, that gave people even more incentive to cancel Delta Amex cards with annual fees anywhere between $250 and $550.
Delta pretty much showed its hand. Frankly, (I’m surprised they didn’t hire Kim Kardashian over Tom Brady.) So, now that everyone knows what Delta wants, how do we proceed?
People already apparently started canceling Amex cards — and gave in to their wandering eyes for other airlines and credit cards. American and JetBlue were only too happy to offer status matches.
That’s my long way of saying that I think these “modifications” are a way to stop the Delta-Amex bleeding. Delta isn’t necessarily sorry your feelings are hurt or that you’re taking your 60 segments to another airline. Unless you hold a Delta Amex and/or always purchase First Class seats.
So, what changes might we reasonably expect?
Unlimited Sky Club Visits for Delta Reserve Cardholders
That’s the way it’s been since I can remember.
But starting February 1, 2025, Reserve cardholders will be entitled to ten (10) visits per Medallion year. Cardholders who spend $75,000 during a calendar year unlock unlimited visits for the rest of that Medallion year and all of the following. This was implemented to reduce lounge overcrowding. (Amex Platinum cardholders — personal/consumer and business — will be limited to six visits per Medallion year.)
I read somewhere that Delta explained this all away by saying 75% of their cardholders visit Sky Clubs only ten times a year anyway.
But for those of us who fly Delta enough that we can burn through 10 visits in a few weeks (or sometimes sooner), this is a good enough reason to cancel our cards. (I think a bunch of people did that.) Maybe we should finally explore other airlines — yes, explore other airlines! — while we’re at it. American Airlines doesn’t limit their top-tier cardholders’ club lounge visits. Neither does United.
It’s a terrible look for Delta to cap Sky Club access on Reserve cards — given that the Reserves are Delta’s signature, ultimate premium cobranded Amexes.
I think the visit cap will stand or be increased for Amex Platinum card members. I don’t expect them to receive unlimited Sky Club visits.
Better MQD Earnings Rates on Qualifying Delta Amex Cards
Starting January 1, 2024, Delta flyers no longer earn MQM — just MQD.
Delta Reserve Amex cardholders will earn $1 MQD for each $10 they spend on their card. Delta Platinum Amex cardholders will earn $1 MQD for each $20 spent.
All of American Airlines’ cobranded credit cards earn 1 Loyalty Point for each $1 spent.
Granted, their top tier requires 200,000 Loyalty Points vs. Delta’s $35,000 MQD. But credit card-spending wise, that’s $200,000 vs. $350,000.
Remember, the $350,000 is for Reserve cards. That’s not competitive.
I can see Delta lowering the ratios to something like $1 for every $6 or $7 spent on a Reserve card. Plus, Delta can act all charitable and say something like, “And we reduced spending requirements by nearly half! That’s how much we care! Because our customers are the best part of Delta!” Mmmhmm.
They should do the same thing for Delta Platinum cards — but I doubt they will. Maybe they’ll drop those to something closer to $10-$15?
It does you no good to hold a Delta Gold Amex or Delta SkyMiles® Blue American Express Card if you care about status. Spending on those cards will not earn you MQD — even if you hold a Reserve or Platinum.
There’s still no way I’m spending that much on Delta Amex cards. My wife and I were fine hitting the $25,000 MQD waiver and $30,000 for bonus MQM on our respective Reserve cards.
But we’re done spending money on our Delta Amexes unless Delta drops the earnings rates to something like $1 MQD:$3 spent.
I won’t hold my breath.
Delta has made it clear they only want people who spend massive amounts of money on their cobranded Amex cards and/or plane tickets.
Will Delta Lower MQD Levels?
The new MQD requirements are:
- Silver: $6,000 MQD
- Gold: $12,000 MQD
- Platinum: $18,000 MQD
- Diamond: $35,000 MQD
Diamond required $15,000 MQD a couple of years ago. Delta raised it to $20,000 for this year. You’ll need $35,000 for 2025 status.
That’s an absurd leap.
Platinum went from $9,000 to $12,000 to $18,000 during that span. (Many folks earned their Platinum, Gold, and Silver status through the soon-to-be-defunct MQD waiver. MQD were sort of a non-factor.)
I wouldn’t be surprised if Delta slightly lowers MQD requirements for 2025 — but I certainly don’t expect it. Even if they do, we know thresholds will climb back to at least $6k, $12k, $18k, and $35k within a year or two.
Delta CEO Ed Bastian said the airline will make modifications to the significant changes the airline announced a few weeks ago.
I think Reserve cards will continue to feature unlimited visits. The ten-visits-a-year thing will go away — at least for a while.
It’s not unreasonable to expect Delta to improve the god-awful MQD returns on their Amex cards. Aside from the 20% in statement credit for onboard purchases, I have no reason to put another penny on my Delta Amex card.
However, I doubt Delta will lower the MQD requirements for 2025. If they do, the rates probably won’t be substantial.
What do you think?
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