Delta

Delta Confirms Revenue Requirements for Elite Status Next Year



In the past, regardless of how much Delta passengers pay for their plane tickets, all would receive the same amount of Medallion Qualifying Miles (MQM). One mile equals one point. Delta, however, has just released a new rewards system that goes into effect in March 2014 that included four tiers–Diamond, Platinum, Silver and Gold.

With the new system, passengers will no longer be able to earn elite status only through miles accrued. Delta is putting into place a sort of “paying members only club” fare class that will be based on MQMs and the amount actually spent on a plane ticket or by the Medallion Segment Qualification (MSQ.)

An alternative to meeting the new guidelines is to spend a minimum of $25,000 in the calendar year on the Delta American Express credit card. This new exclusivity program was created so that loyal passengers that spend over a certain amount are being rewarded and placed into a tier that passengers who are only flying Delta with and receiving upgrades through frequent mile programs will have a difficult time doing.

To qualify for the different tiers, new spending minimums have been put into place. The new minimum amount spent on Delta flights is 2,500 to qualify for the MQD and MQM must be at least 25,000. Like mentioned earlier, the qualifications could be bypassed by spending 25k on the co-branded AMEX credit card.

Even more changes, Delta’s fare bonuses will change starting March 1, as follows:
-First and Business class will double from 50% to 100%
-Economy class which earned 50%, will no longer earn bonuses

The changes in bonuses include flights with Aeromexico, Air France, Alaska, Alitalia and Virgin Australia.

The motive for the changes seem to be to honor Delta’s loyal customers that do invest a good deal of money on full-priced tickets and to encourage more spending using their American Express card. The ranking system sets apart the passengers who earn miles and to fly and label them as “cheap elites.”

By enforcing a strategy that includes a high spending limit on a co-branded credit card seems like a good way to lose a customer base by forcing them to stick to one airline. Other credit card companies, Chase for instance, let customers redeem their accrued points with various non-partner airlines and hotels like United or American Airlines.

Most likely Delta SkyTeam international flights won’t even qualify towards the medallion tiers, meaning that only Delta specific flights may be eligible towards MQMs or MQDs. For such an expensive and exclusive membership, there doesn’t seem to be an incentive for travelers that may want to take non-Delta medallion trips.

For those that do spend over $12,000 or even $25,000 on their Delta AmEx cards, they will appreciate less competition for upgrades if Delta loses a portion of it’s current frequent flyer clientele.

Bottomline:
Delta’s elite customers are being rewarded for their loyalty. Putting a focus on their most loyal customers that are a minority, keeps the airline afloat and the medallion holders happy so as long as they could afford to maintain or advance in their tiers. Frequent flyers will now have even a MORE difficult time reserving a seat when these effects go into motion.

What do you think about these changes? Let us know, comment below!

-The Well Traveled Mile