Update 10am: Delta Air Lines officially confirmed these rumors and released a press release detailing the changes that will come in January 2014.
The prospect of a legacy carrier switching to a revenue-based program has been looming over us for quite some time, and many have looked towards Delta to make the first move. Yesterday, Flyertalk user DLroads found a page on the Delta website that suggests these changes will occur next year.
The page on the Delta website has since been taken down, but DLroad‘s post has a summary. There are some immediate changes, such as the decrease in earnings for M fares bought after March 1 from 150% to 100% MQMs (which is the minimum fare class needed to upgrade internationally on Delta) as well as an increase for full-fare First and Business class fares from 150% to 200%.
But perhaps the biggest change is likely to come in January 2014, with the introduction of “Medallion Qualification Dollars (MQDs).” In addition to qualifying on miles or segments, elites will have to qualify based on the amount of money they spend on Delta and its partners. The skeletal structure of the MQD requirements seems to follow a “10 cents per mile” guideline, where Silver status (awarded at 25,000 MQMs) requires $2500 of spending; Gold at 50,000 requires $5000 spending, and so on, up to $12500 spending for the 125,000-MQM Diamond level.
At first glance, I was pretty devastated about a Delta revenue-based program. While mileage runs hover in the 4-6 cents per mile range, even my necessary trips rarely surpass 10 cents per mile. There would be no way for me to keep my Delta elite status, and this would signal my exit from the Skymiles program (since I see Delta’s program as better for elites than for just having miles in).
Then I saw the last sentence in DLroad‘s post …
Alternatively, Delta SkyMiles Credit Cardmembers can be waived from the new Medallion Qualification Dollars (MQDs) requirement if they make at least $25,000 in Eligible Purchases within the calendar year.
Well, then … looks like I’m good to go, since I already utilize American Express cards to earn additional MQMs. If anything, this shows how much credit card companies really make for the airline in terms of loyalty and revenue.
The page has been pulled down from the Delta website, and there is reason to believe that these changes may not be implemented. Last year, there were rumors that United was moving to stricter spending requirements for the new elite program for the new post-merger airline, and that met lots of resistance. The only requirement from those rumors that lives on today is the requirement for 4 segments on United or Copa metal, hardly a tough feat for someone chasing United status.
What other changes are possible in a revenue-based program?
Let’s be clear, though – revenue-based program changes, particularly for lucrative elite tiers, will occur. If airlines were initiating programs today, we wouldn’t have the usual “mile” system that we have now — we’d have programs like the ones Virgin America, jetBlue, and the new Southwest have, which are largely revenue-based programs on the elite status, earning, and redemption sides. The Delta page yesterday only spoke for elite status and didn’t discuss the redemption side of the program, which affects more people.
However, I’m optimistic that these redemption-side changes won’t happen. My argument against a change towards a revenue-based redemption chart is two-fold. One, Delta already has a revenue-based chart called “Pay With Miles.” For example, those who hold Delta-branded American Express cards can choose to use 10,000 miles for the equivalent of $100 off of airfare on any ticket, though the ticket won’t earn any new miles. It’s the reason why I’ve argued that while Skymiles are Skypesos, they have a minimum floor of 1¢ in their value for award tickets.
The second part of my argument is that the current miles system attracts me to stay with the legacy airlines rather than fly with Virgin America and their newer planes … I’m attracted to the fact that I can fly 60,000 miles as a mid-tier elite on Delta and earn 120,000 miles, that I can then use for a business class trip to Asia. Same thing with earning United miles – I want those aspirational experiences of being able to fly to another hemisphere in a premium cabin seat that wasn’t going to be sold anyway. The ability to redeem for aspirational awards is a competitive advantage to the legacies, and taking that away will reduce my loyalty to them.
For myself, I’m actually breathing a little sigh of relief seeing this. If Delta “accidentally” published this, this seems like the furthest they will go, at least on the elite status front. While the MQD requirement may not jive with everyone, it doesn’t affect my elite standing since I argued that spending for elite status through credit cards is a great way for Delta flyers to rack up MQMs, and doing so would be waived in the possibly future program. Who knows, it might even thin out elite herds.