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.”
Please note that Delta Air Lines SkyMiles no longer awards Medallion Qualification Miles (MQM) or Medallion Qualification Segments (MQS). Some of the offers in this post may be expired. This post remains published for reference and historical purposes. (Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.)
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.
(©iStock.comCaiaimage/Robert Daly)
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
Right now, Delta Reserve Amex cardholders (both personal/consumer and business) can access Delta Sky Clubs when flying a same-day Delta-marketed or -operated flight.
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.
Gross.
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.
Final Approach
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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I think Delta has to bring some kind of MQM metric back into the equation. Make diamond 130,000 or 150,000 MQM with credit card MQM bonuses not counting and also require $20,000 or $25,000 in MQD. 125,000 MQM, especially with bonus MQMs, has been too low of threshold.
I still want to know how Delta is going to handle Delta One lounges. By the end of 2024 or early 2025, there should be Delta One lounges open in Detroit, Boston, New York and Los Angeles. That should help with Sky Club overcrowding as probably 40-80 people in the Sky Club at any given time are flying Delta One or business-class on another Sky Team airline.
I hope not. I prefer the new system. I just don’t like the new levels. I like Chris’s suggestion that they might give a better return on spending on the Reserve card. You can get to be executive platinum with 200K of spending (caveat – that only gives you two systemwide upgrades – you really need to spend 250K to get the equivalent of Diamond with 4 upgrades). If they are going to bring back MQM then they should retire MQD.
I would like to see them give more frequent upgrade offers in the app, with special deals that get better as your Medallion level increases. Too often I see 2 or 3 first class seats left and I have no way to upgrade to them. There ought always to be a way to pay to upgrade when there are seats left.
Also your suggestion would make it even harder to qualify for Diamond than it would be with the currently planned new rules.
I also think Delta has to announce some sort of token elevation of service in domestic first or Delta One if it wants people to buy paid airfares in the forward cabin. Delta still hasn’t brought back pillows or blankets domestically. Right now, the Delta product of 2023 isn’t premium. JetBlue and United Polaris are by far the best U.S. business-class products.
Yes. Also bring back hot towels and proper glassware. No more plastic.
You say “has to” but so far they don’t have to elevate service. People are buying them up even with the lower service levels, and that’s a problem for the loyalty program because there isn’t much inventory left for “free” upgrades. Unless they really see a drop in flight revenue or co-branded card revenue, they have no reason to make frequent fliers happy. That said, there are lots of people cancelling cards, boycotting, or at least temporarily pausing use of cards, and booking flights on other airlines. And clearly that has been visible to Delta, or they would not be rethinking the rollout of their status purge.
The bigger seat and ability to order a kosher meal in advance (on a flight with meal service) is good enough for me. I just wish that they would continue to offer these upgrades until all the seats are gone.
At this point, I don’t know that Delta can undo what it has already done. They have shown their hand. There is zero reason for me to remain loyal to Delta after next year. Making a program all about spend rather than actual miles flown gives me zero reason to stay with them. Amex should have the lounges at ATL and DCA by the time the changes take effect. With all their other lounges and Priority Pass I’ll be just fine flying other airlines.
The more I’ve thought about it I know think they may improved the MQM “conversion rates” as some of the biggest spenders are sitting on an absurd number of these thinking they would qualify for Plat/Diamond for years to come and now that all goes away in a single year. I’m also thinking they may introduce some sort of MQD rollover starting next year as it meets their goal of keeping folks spending on their cc’s once they’ve hit a tier and have no hopes of hitting the next.
Agreed. Good observation. Once I hit my tier, I will spend on my other cards.
“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.”
Assuming this actually happens…this will solve the overcrowding issue at the SC’s. No, it is not scientific…but roughly 70% of the folks I talk to in a SC are in there on the Amex Plat or as an AU on the Amex Plat.
The problem is those who use their Amex Plat as their method of entry aren’t loyal to Delta. They most likely book whatever airline has the cheapest fare and/or most convenient time. So they might fly AA a couple times a year, UA a few times, maybe AS, and then DL a few times. Which translates to only needing to use the SkyClub about 6 times (or less). So I don’t really see the 6 visits cap as a deterrent.
Not true at all. I fly DL as much as possible and I use my Amex Plat to enter the club. And pay the first class freight, too. You don’t get in unless you are on DL.
Perhaps what Aaron meant is that six visits are enough are people who aren’t loyal to Delta?
Not really. If I continue to fly Delta 80 segments a year (I doubt it with the AA and AS status matches I’ve done) then I would just get a Reserve in addition to my Amex Platinum. I think you’d be surprised how many Diamonds use the Amex Platinum for access not the Reserve. And the twice a year leisure travelers will still get in with their six visits. It won’t change anything.
Delta’s basic problem is too many Diamonds (and an insane number of MQD waiver Platinums they are losing money on) and too many people with SkyClub access. I think they want the 75K spend for unlimited club access badly. It doesn’t matter which card it’s on.
@Nathan,
Please tell me HOW Delta is “Losing” money on Platinum Medallions? I haven’t been upgraded to “Business” class in over 7 years, I rarely get Comfort+ at booking because I frequently book last minute. Sometimes I’m offered the “dreaded” middle seats for which I will not sit. Please help me understand how the Platinum Medallions are more of a problem than Diamond Medallion, many of which fly on “other peoples money”.
RUCs, Comfort+ and upgrades may well cost Delta more than the margins on 5K in tickets. Covid MQM rollover killed the MQD waiver. That was inevitable.
Respectfully, again I must ask, HOW many “Platinum Medallions” are being upgraded, or cleared with their RUC’s? Can’t be too many as after 71 segments out of ATL, I always around in the 50th% percentile. If Delta is getting $700+ for a Comfort+ upset from Main Cabin, then I can yield to your point, however, ANY person that would pay on upward of several hundred dollars must be “committed”.
Lastly, the “slow” boil versus “ripping” the band aid off SHOULD yield MORE opportunities for First Class(Business Class) monetization for ALL members, not just Diamond Medallions if we’re concerned about the “margins”.
I’m a PM and have good luck using RUCs. Generally, I use RUCs when taking personal trips and only select options that clear right away. My days and times can be flexible because my employer allows us to work from anywhere. I almost always get the Comfort+ upgrade just after booking. I value RUCs around $300 each.
In June, I took a business trip from SJC to ATL and applied RUCs. I was cleared to ATL quickly, but not cleared back to SJC. No Comfort+ upgrade either. However, my status did allow me to select one of those exit row seats with no seat in front of me, and the middle seat stayed open, so it was a very comfortable flight and a good opportunity to burn a couple drink vouchers.
I live the SF Bay Area, and there are a lot of options here. I’ve often wondered if people that live in competitive markets have a hidden upgrade priority (probably not). Since I do not plan to seek status next year, I have been doing a few searches using Google Flights, and see some great first class options on Alaska, American, and United to the upper Midwest that are significantly less expensive than Delta, and I am looking forward to trying them.
I wonder how AMEX is doing with these changes? I plan to drop my Reserve card in December, but I recently got great welcome offers from AMEX for the business and personal Platinum cards and took AMEX up on the offers. I have to think that this is a net positive for AMEX, but not Delta.
For people that decide they are not going to chase status anymore (like me), dropping the Reserve and going with a non-Delta Platinum is a no-brainier for 2024 since I will still have unlimited Sky Club access next year. I expect that if Delta does restore unlimited Sky Club access now for the Reserve card, it will still not stop the short-term bleeding because the MQM bonus was a big reason to have that card. Changing the Reserve to $1 for every $6 or $7 spent would not be enough for me. However, it is possible that I will get a Reserve card again next year if I really want unlimited Sky Club access. Throwing in a couple RUCs might be enough to sweeten the deal for me. Perhaps Reserve card holders could be given an option to select companion certificates, RUCs, or guest passes.
I may be happy using the the Sky Clubs less and getting only either 6 or 12 visits Sky Club visits (depending on what I do with my Platinum cards). I find myself using the The Escape lounge at MSP and the two “The Club” lounges at SJC pretty often and maybe I will be OK with using the Sky Clubs less.
I don’t think Amex is very happy with people canceling cards.
It would be interesting to find out the rate of drop with the Amex/Delta cards in the next 6 months. I am dropping my Delta Amex Platinum card in Feb when it is due for renewal. As far as the lounge visits I only used them when I flew to Asia from Minneapolis (premium Economy and platinum got in for free last time I went) and I will miss that the most. I think I should be included in the Premium Select since it is supposed to be. a”premium experience”.
Ed, Allison and Dwight are crying crocodile tears and stalling to stop the bleeding (stock price, departures through status match, and closing/downgrading of AMEX cards). They have shown their true colors…be loyal to us but we don’t need to be loyal to you. My guess is very minor if any changes, but the foundation of the new High Net Worth Skydollars program will not change, you will buy your way to medallion status. The “road warrior” business traveler that earned their status by flying will still be shown the door. The answer to Skyclub overcrowding is simple, no access for Delta Platinum AMEX, and unlimited access for AMEX Platinum/Reserve and limit the number of guest passes based on medallion level. EVERY guest requires a pass, no ability to pay for guests to enter the Skyclubs, once your passes are gone you can no longer bring in guests. Delta also needs to drop the idea of being a OTA as hotel status benefits are more important to many business/leisure travelers. I spend on average 3-5 nights in hotels on every trip I make each year (35+) and 3-4 hours on a plane. Going through Delta/Expedia as a third party eliminates my hotel/car benefits. Dont even get me started on MQD qualification levels, MQD exchage rate and the disregard for people that actually fly 2-3 times a month on their airline.
Zero chance of losing access with the Amex Platinum. Amex won’t allow it. And even if they did, frequent fliers would just switch cards.
I agree — but my guess is that Amex Platinum cardholders won’t continue to enjoy unlimited Sky Club access.
I spent YEARS building up about 500k miles. 60% credit card spend and 40% actual mileage. When I started out, it was to take a nice biz class trip “some day”. What a joke! I’m burning DL miles on domestic trips. ONLY keeping the Gold Card for bag checking. Adios to DL and AX when they’re gone. My last trip on DL was 1 hour 53 minutes delayed on the tarmac due to weather and the (clearly) new hire flight attendants stayed in the galley the entire time. I’m not joking! Comparing them to UA and AA- THERE IS NO DELTA DIFFERENCE ANYMORE. They don’t care but it’s all good- either do I!!!!!!
VERY loyal to Delta for damn near 3 million miles and now retired so almost impossible to qualify for anything with their new plan.
Delta needs to remember those who were very loyal for a good portion of their lives….
John Sousa
Flying Col
2.9 million miler
Multi year Diamond member
The mqd has to become reasonable, most folks have company cards they are required to use thus making the card spend minimal. $20k was already a big jump and I buy business to Europe
Chris,
At this time I hold a regular amex Plat business , delta Reserve busines and Delta Plat personal cards.
I have an additional reserve card for my GF so she can go into the skyclub with me or when traveling on her own. Since I no longer travel for work, 10 visits to the sky club is a deal breaker for the AF I pay for the two cards. As traveling for personall with a connection (2 sky club visits each way) that’s 2.5 trips before being locked out. If they made it 10 day passes per card held per year that would be acceptable for me.
As far as my annual spend. It currently is about 50k a year an the DL cards and would consider some MR in the future to maintain status.
I do have a AA citi Mastercard that I have had since the 80s and do minimum spend on that to prevent my aa miles from expiring.
I am considering dropping my Amex reserve for the capital one venture x(I think that’s what it is)
But u can tell you that if delta doesn’t roll back a bunch I will be flight shopping by price first and airline second. I find that delta is consistently more expensive, but always paid the difference….
Now that may not be the case, especially if I know I can take carryon for free.
Like many have said, Delta cannot undo what it has done. It’s all damage control at this point. But Delta has shown its hand, and now it’s like that old saying: Fool me once, shame on you. Fool me twice, shame on me.
Nobody is going to position themselves to be fooled a second time. Regardless of backtracking, I still plan to downgrade my Delta Reserve Amex to a Blue or maayyybe gold. I’ll keep the credit-score-affecting benefits of the huge credit limit, but without the annual fee.
But the question I have is this: were the decision-makers really so smug that they thought they could pull it off without massive blowback?
Did they not run focus groups to understand likely customer sentiment? Did they not consider that most people are not at all interested in a zero-benefit OTA?
This seems like a pretty big blunder, and “oops, sorry” isn’t going to fix it. Interesting times ahead!
They could also block middle seats in Delta Comfort until the last minute for Diamond members and bring back meal service in coach (or at least Delta Comfort) on domestic flights that are longer than 4 hours.