Delta announced requirements for its SkyMiles loyalty program elite levels would increase by 50-100% but after backlash reduced those adjustments to 25-67% increases. That’s not going to be good enough.
If you are considering booking travel or signing up for a new credit card please click here. Both support LiveAndLetsFly.com.
If you haven’t followed us on Facebook or Instagram, add us today.
Delta Announces Big Changes In September, Reduces A Month Later
Ed Bastian and co. in Atlanta have a very high opinion of Medallion Status and the SkyMiles program more broadly. Too high, like 50-100% too high.
That requires some qualification.
Delta (and the other network carriers) have more or less captured the available elites they can. With few exceptions, traveling executives (those most likely to hit meaningful elite status levels) from Houston or Dallas are unlikely to trade non-stops for one-stop service in Atlanta, or Minneapolis, or anywhere.
There are some hubs where Delta might be able to steal some elites, notably New York, Seattle, and Los Angeles, but that’s about it. Two areas of growth remain: infrequent flyers and new flyers. American Airlines highlighted that it has seen great growth from infrequent flyers. All carriers stand to gain from new flyers, especially in markets where a connection is required anyway.
Delta is looking to grow by increasing incremental spend. Are there trips its customers take that are not on Delta? Most likely yes. The carrot of achieving status could cause some of those customers to move even more trips to Delta. The threat (it’s always carrot or stick, right?) of losing that status might encourage a customer to open a credit card and earn more miles to retain that status.
For those who haven’t been closely following the changes, Delta initially doubled entry-level Silver Medallion status requirements, increased Gold & Delta SkyMiles Platinum by 50%, and Delta Diamond requirements by 75% from 2023 levels. Due to uproar from customers and the media, those changes came down to a 67% increase for Silver, 25% for Gold & Platinum, and a 40% increase for Diamond. Matthew wrote earlier this week about how the program still wasn’t worth engaging in, but to be fair, it wasn’t before the changes were announced so any increase made SkyMiles even less attractive to outsiders.
Why It Won’t Work For Customers
Many SkyMiles customers were, respectfully, asleep at the wheel. Many of my travel agency clients weren’t aware of just how little SkyMiles are worth and how they compare to others. I have one client who’s been putting every flight and all of his business spend on a Delta SkyMiles Reserve American Express card. Had he placed his $250,000+/year spend on an American Airlines credit card, not only would he hold a similar status to Delta Diamond, but he would have earned enough points for an annual business class trip to Asia for he and his wife – every year. Earlier this year, he explored a similar redemption on Delta that would have cost him 4+ years of spending to redeem.
That woke him up. Many other Delta loyalists are so entrenched in the program that they haven’t looked around. Or at least, they hadn’t until September.
Another example came from the owner of a travel consortium, someone who is incredibly plugged into the travel world and flying is part of their job. This person was struggling with the requirement of $20,000 in Delta purchases – they use a corporate card for business expenses that is not a Delta product. At $35,000 it was completely out of the question and they were re-examining their relationship with Delta already. But at $28,000, it remains out of reach and the customer might be lost.
For those at the lower end of the market, $3,000/year excluding taxes and fees for Silver was attainable for many SkyMiles members. At $6,000, this is good enough for an entirely higher tier on other carriers, dropping that requirement to $5,000 in spend or a 67% increase over 2023 levels will not be attainable.
Too many customers have become wise to the new requirements and how hard it will be to obtain/retain their status level. If they are really smart, they will look at redemptions too and see just how little they get in return for their loyalty.
Why It Won’t Work For Delta
Many customers voiced their concerns.
“I have read hundreds of your emails, and what’s been most clear to me is how much you love Delta and the disappointment many of you felt by the significance of the changes,” Bastian wrote. – Associated Press
Something tells me that’s not what got his attention.
Granted, this is just a theory, but I think that an awful lot of customers decided to materially terminate their relationship with Delta by starting with American Express. Its co-brand relationship is worth billions to Delta annually and accounts for the majority of the carrier’s net profit.
Part of the aim might have been to thin the herd and make status more valuable, after all, being a Delta Diamond doesn’t mean much if your upgrades don’t clear and there’s an hour wait to get into the Sky Club.
But at least part of this was to get that incremental spend outlined above and this is a step too far. Much like boiling the frog, the secret is in heating up the water slowly lest the frog doesn’t leap out of the pot. Even the adjusted changes are just too much too quickly. Not only does Delta not get the incremental spending gain it hoped for, but risks losing customers altogether as they move carriers.
Atlanta flyers might not do this, but with spending requirements out of reach and diminished benefits of holding premium Delta credit cards, they may move the more important of the two relationships – credit card spend – elsewhere. That doesn’t help Delta either, even at the revised lower requirements.
The latest bout of unabashed hubris will actually cost Delta more than it gains. Don’t be confused by the latest earnings report, it’s the next four to watch.
Conclusion
Delta made huge increases to its SkyMiles elite requirements. It walked them back slightly, but not in a meaningful way. It will wake some sleeping giants to how Delta values their relationship and how little they get for their loyalty. Their revised requirements still exceed reasonable levels when compared to other carriers and it’s my belief that Delta will lose net customers and earn less in the next four quarters.
What do you think? Will Delta lose customers?
You’re not factoring the Delta Amex automatic MQD boosts.
In the the silver example you provide…
Yes it’s now $6,000 MQDs vs $3,000 prior. But holding just one Plat or Reserve SkyMiles card gets you $2,500 MQDs. So it’s more like $3,500 MQDs, or $3,500 MQDs plus the Plat annual fee.
Or just hold two cards for like $1,000 out of pocket and you get $5,000 MQDs. And you only need to spend $1,000 more on Delta flights for Silver, so $2,000 in total out of pocket spend vs $3,000 prior.
For the Diamond corporate card example. She already had to earn $20k MQDs to hit Diamond. So theiy’re asking $8k more. Holding 2 cards will get $5k no spend required, so it’s a net $3k more, which can be made up with a third card or some extra spending on a Plat or Reserve.
For someone who made it charging $250,000 a year, they can now hold 4 of the Delta Amex to get $10k MQD. That’s $2k out of pocket in annual fees. Then spend $180k on a card to get $18k MQD to earn Diamond assuming no flying. So less card spend required and no more $250k minimum.
@ Kyle — You and Matthew are both way off on this topic. One cannot view the MQD thresholds in a vacuum, as both of you have chosen to do. Delta decided to un-fire their long-term, loyal customers with the MM changes and MQM conversion, while setting a higher bar for new customers. This is not different from AA and UA, who both make re-qualifying easier than qualifying from scratch. Yes, DL miles are not as valuable as AA miles, but an annual international business class trip on either carrier is hardly an aspirational award.
If you are going to do an analysis of the revisions , then you must include the revisions to the Million Miler program . The adjustments to the MM program are significant improvements. I suspect at least some defectors will return simply because the MM program is now more rewarding . Additionally, I can see folks , like me , who have surpassed the 2MM mark at AA and are maxed out at LT Platinum and close to DL MM , diverting business from AA to DL.
Why did you include a picture of (one of) America’s worst gov?
With the exception of diamond, DL is more or less in the ballpark of AA’s qualification levels now. For AA, to renew status by flying only requires the following amounts in flight spend:
Gold- $5,714
Plat- $9,375
Plat Pro- $13,888
EP- $18,181
@Gene is right. They have decided to keep the ex-loyal flyers around for now
I think Delta has learned that people buy lottery tickets for the hope.
e.g., Diamond – “Hoping” for an upgrade when there are 1-2 seats and 69 on the list
Thought process over time is as follows – telling people not to buy lottery tickets never works
September 2023 Delta – No one is getting upgraded anyway, let us shrink the upgrade lists and empty the lounges
October 2023 Delta – Everyone is an Elite now – Plase don’t leave us – we are very happy to add you to the upgrade list! (it may not clear as it is 70 deep, but we tried) and Of course you can get into the lounge, but there is a wait as it is so good.
I gave up on upgrades with Delta. I flew 4 segments this week. The closest I got to being upgraded was #9. Now, #9 for Delta Comfort, I was never above #30 for first class. No need to say I got zero upgrades. Zero!!! I have 3 Delta Amex cards, have been Diamond for 15 years in a row so not sure what else I can do to improve my odds of being considered for an upgrade.
@Greg is right. Actually Delta is the easiest to bumpup status
They caved in to the social media and went too far the other way now.
UA flyes have bad credit card boosts due to Chase and UA not realizing value
You are looking at it as a UA flyer
Cost of Silver on DL come Jan 1 – 2 x 250$ Delta Platinum cards That is it!
Cost of Gold on DL come Jan 1 – 1 x 250$ Delta Platinum cards + 1 Delta Reserve Card along with + 5k (by flying) or upto 50k spend on Reserve (if you spend 4k ticket you need only 10k spend on Reserve)
etc
Their problem was full lounges and they tried to be haughty and empty it – now they have caved and the lounges are going to be as full as ever. Sep Delta – take it or leave it. October Delta – please stay!
Was at the newest and nicest Delta lounge at MSP this week and two disgusting ladies took an entire couch and laid themselves without shoes and were simply sleeping with blankets almost covering their faces like they were at their home. They looked like what a homeless person does on the streets with their bags and shoes all over the floor. I cannot wait for the new Delta rules start so people that do not belong into their lounges find another place to sleep.
This.
Delta absolutely needs to thin the herd. They were going to do it quickly, now they will do it in a step-wise fashion.
The ones that whine the most on this website do not even pay for their tickets but expect FF status for simply showing up to work that includes air travel.
Likewise, I doubt Delta/Amex will miss much of the crowd that had the card for the perks but did not spend on it and now gave it back.
I don’t see how the new rules would stop this. Those ladies would still be allotted their 10 or 15 SkyClub visits under the new rules, and as such, they could still lay out on the couch until their heart’s content.
For year I use to fly exclusively with United and then during covid I started flying with Delta. I’m not a top tier customer on either airline but now days I do fly both United and Delta and I can tell you this from a customer service perspective United has gotten somewhat better but their customer service agents and their flight attendants are now where near as nice or friendly as Delta’s. I live in Chicago so yes Delta may loose some customers but United and American still have one problem they have to address and it is their flight attendants and customer service agents. The reason Delta revenue and profits are what they are ins’t because there is some huge difference in their hard product. Delta, United and American all basically have the same hard product onboard their aircraft. What sets Delta apart is their customer service and I don’t know if its because they are nonunion making it easier for Delta to get rid of bad CS agents and bad flight attendants than it is for union airlines like United and American but I don’t think Delta will loose as many customers as your trying to make it out to be. I think come this time next year Delta’s customer count will be slightly under or right in line with where they are this year.
@proschwit: Bingo!!!! Delta’s customer service s light years ahead of AA and UA. There are bad apples at Delta for sure but the majority of their employees are just happy to work there. They seem happy to be working while on UA and AA it looks like they do not want to be there. That alone is enough for me to fly them.
As long as there’s no requirement for MQM, it’s not a locality program. It’s a spending program with incentives. Over the next couple of years, if Delta doesn’t improve its products significantly, they are going to lose sizable segment of the market. They are too expensive, limited international network, poorly planned and executed joint ventures and the list goes on.
This was truly a wake up call. Just flew back on Airfrance and connected through Atlanta where it was chaotic at best… understaffed, gate agents arguing amongst each others and ignore pax… folks look for other options, vote with you wallet!
I defected from SkyMiles in 2016 because I began to see it as abusive. Now I fly on Delta on average of once a year or slightly less. However, with the changes that million milers will get lifetime gold status, I was thinking of a push to get it. On second thought, I’ve decided not too but the decision was close.
There is a lot of bashing Delta for the high miles required for international Business Class redemptions. But, UAL and AAL are catching up. I just spent 1.5 million miles for two roundtrip AAL tickets MIA/ EZE/ MIA for days I needed. AAL is frequently more expensive than DAL.
Anyone who spends that amount of miles on a MIA-EZE r/t is a fool. Sorry. And you are part of the problem. You just encourage the gouging.
Seriously, given the value, you could have easily paid for J on a number of carriers. Or, like the rest of us, game it back and wait last minute when plenty of seats will open for far less.
1.5 million miles for an EZE r/t for two? Are you kidding me?
Stuart and I don’t often agree, but on this one we are on the same page. There will always be exceptions, and in the case of American, that exception might be absurdly high, Delta level prices. But at Delta, the exception is the occasional rational price for a redemption. That’s the difference to me.
We don’t disagree that often. We just don’t like each other, lol. For whatever reason.
My suggestion, cancel them and probably find a Copa r/T with a short connection for $2000 r/t each. A MUCH better value in the end and it starts to send a message. Or, if you are gutsy like the rest of us, wait until a week out and I bet, unless an anomaly, that seats will open up on AA for exponentially less.
I personally suspect that primary goal of this was:
(a) To reduce SkyClub over-crowding, and
(b) To increase American Express cobranded revenue.
The SkyClub access wasn’t really walked back, they just made it a little more generous.
As for the second point, I sort of suspect that their model didn’t take in account many Delta elites no longer seeing a value in holding multiple cards, hence the MQD head start.
Reducing the number of elites was perhaps a goal but really a secondary or tertiary one.
Stuart & Kyle, Flying COPA in a B737 with minimal recline, marginal service, and middle- of -the night Panama City connections is not a competitive Business Class experience. Regarding suggestions to wait and see whether AAL reduces high redemption rates is also not practical. If you require certain travel dates because of fixed cruise dates, tours, family vacations etc., you don’t have the luxury of waiting around for better redemption rates. All this summer AAL mostly priced BC one way U.S. to Rome at 350,000 miles one way. That is comparable to what Delta frequently charges.
Think about what you are saying. You are spending 1.5 Million miles to travel to EZE from MIA for two! I could milk out over time 20 one way business class tickets to Europe with that bank. There are countless opportunities on UA and AA at lower redemptions close in that would translate to how much? I dunno, I am terrible at these calculations, but I bet the equivalent of around $50K after fees.
So, instead of “suffering” though Copa and a connection in a non lie flat seat to EZE from MIA (which is hardly a schlep) you will spend what is essentially $45,000 to have crap service on AA all because your seat goes flat for 9 hours and it’s non-stop? Dude, seriously, this is not aspirational, it’s not even close. You are completely off the wall with your plans. Heck, buy AA for $7K r/T if you want…even that is more practical.
But I guess, if you have nothing else to spend your miles on and don’t care…have at it. Who am I to tell you how to burn em.
I’ve been a diamond for ~7 years and just short of 1 mm…
As you say: deeply entrenched perfectly described it. Reflexively filtering google flights to ‘SkyTeam’ every time and happily paying the DL premium.
I fly mostly in the front part of the plane… so the niceties that come status is included anyway. Now they’ve blown up the value prop for me with the changes — I’m now a free agent. The only thing I’m really losing are the GUCs, diamond line, and the 11 miles per dollar.
RE: MillionMiler changes – they’re are great for people in the 50s & 60s that have been flying DL for decades. But they’re on their way out as customers. I’ll shortly be silver for life…. but with the changes and my now wandering eye, vanishingly unlikely I will fly Delta enough going fwd to hit 2mm. They’ve lost my frequency and my willingness to pay their premium…. it doesn’t take too many customers like me and they’ve got a material problem.
Just last week – booked my first star alliance flight half a decade! Actually kind of exciting. !SAS
You’ll shortly be Gold for life with the MM changes.
You are missing the point. With a Delta Amex you can pay with miles so the more you charge, the more you can lower the ticket price with miles. This means you can buy the seat you want at a reduced price regardless of Medallion status.
But at a horrible rate, especially when compared to using alternate cards (like a 2% cash back card).
This is that exact trap I was talking about.
1) It starts with a requirement to have the credit card.
2) It remains an incredibly bad value – especially when earned at a 1:1 rate with American Express.
To demonstrate, I picked a historically dead week, December 6th-13th – too late for Thanksgiving, too early for Christmas. Planes are always empty this week, PIT-CDG in business class. That’s also a softball due to the amount of lift Delta has on its own metal to Paris as well as through JV partner, Air France.
Delta offered the roundtrip for 480,000 + $151. That happened to be the cheapest rate on a 5×7 day period (35 date combinations) which ranged up to 670,000!
For comparison, American Airlines offers one-stop service, same as Delta, from 115,000 + about $1,100 in fuel surcharges and taxes. Obviously, that’s not a great fuel surcharge but still cheaper objectively than SkyMiles even with a co-pay $850 higher. I continued looking.
Alaska offered the same flights for 115,000 + $167 in taxes.
Qantas was 150,000 + $1,000
Iberia was 150,000 + $400
Aeroplan was 234,000 + 255
United was 208,000 + $160
I didn’t even give the other airlines the benefit of a wider schedule search, I solely picked the dates cheapest on Delta. Please explain to me, using facts and math how 480,000 SkyMiles + $151 is better than $115,000 + 67 on Alaska, or 150,000 + $400 on Iberia, or even 208,000 + $160 on United. This is also without invoking any of the transfer or buy promotions or Avianca which starts at about 110-130,000 + $300-400 before bonuses.
Ed Bastian is counting on customers staying because they can use their miles and cash without looking at the prices outside of Delta. It reminds me of that famous line from Spinal Tap, “But this one goes to 11.”