Delta Introduces Medallion Qualifying Dollar Hurdle for Elite Qualification

In case you missed it between the 787 grounding and American’s new livery, Delta made a subtle but important change to its elite qualifying structure beginning in 2014. How much you spend will now be taken into account. While some won’t like this change, those are the people Delta wants to stop rewarding anyway. I like the idea, but there are some issues with how it’s being implemented.

The current method for qualifying will remain in place. You need to either earn a certain threshold of Medallion Qualifying Miles (MQMs) or take a certain number of Medallion Qualifying Segments (MQSs). There will now just be an additional threshold of Medallion Qualifying Dollars (MQDs) that has to be met. Here is how it breaks down for 2014.

Delta Medallion Qualifying Dollars MQDs

The key here is in the calculation. What qualifies as an MQD and what doesn’t? That’s where we see some problems.

  1. Only fares and airline surcharges count toward qualification. Government-imposed taxes don’t count.
  2. Any flight sold under the Delta code counts. This includes Delta, Delta Connection, and any codeshare sold under Delta’s name.
  3. Any flight on a ticket sold by Delta counts regardless of the airline. That means you can buy from Delta or the ticket can be issued by a travel agent under the 006 ticket designator. (You can’t just issue anything, like a United roundtrip, on 006 ticket stock – there has to be a valid Delta segment in there.)
  4. Some consolidator and bulk tickets won’t earn any MQDs. Ancillary purchases (bag fees, change fees, etc) don’t count either.
  5. You can forget about all this if you have the Delta Amex card and spend $25,000 in the year. Then the MQD requirement is waived.

That’s the basic structure, but it does leave some questions. What if you buy a ticket on another airline that includes a Delta segment but it’s a single fare? How will it be pro-rated? That may be a minor concern considering how many people do that, but there is a much greater concern.

The Joint Venture Problem
Delta has a lot of joint venture partners. That includes Air France/KLM and Alitalia in the Atlantic. Of course Virgin Atlantic will have one as well soon. And there’s Virgin Australia in the Pacific. I think there might be some others as well. A joint venture here means that Delta isn’t supposed to care which airplane you fly, the money will be the same either way for Delta. Yet if you buy a ticket from Paris to the US on Air France, that won’t count toward MQDs and that’s a bad, bad thing.

I’m going to assume that this is simply because they don’t have the revenue tracking systems to implement this properly, but this could present some real issues for travelers.

Time for Math
Let’s forget about that for a second and do a little math. The ratio here is that you must spend at least 10 cents a mile for the minimum number of miles required for each level. In other words, if you fly 25,000 miles, you better spend $2,500. But if you fly 45,000 miles, then you still only have to spend $2,500 to qualify for Silver. But since 50,000 miles qualifies for Gold, then you have to spend $5,000.

For most elite members, this shouldn’t be hard. I mean, if you’re silver, one roundtrip in business class internationally will qualify you straight away. Heck, it might qualify you for gold too depending upon how much it is. Let’s say you don’t fly like the big ballers, and you do a monthly roundtrip between New York and LA in coach. That’s about 60,000 miles assuming no bonuses and that qualifies you for gold. Now you need to spend about $415 per roundtrip plus taxes and fees to qualify, so let’s round up and call it $500 even though that’s probably too high. That’s not out of the ordinary by any stretch in today’s pricing environment.

Or let’s say that you fly weekly from LA to Vegas. Assuming you get the 500 mile minimum earning, then you’ll also be gold. And you’ll need to spend under $100 per roundtrip to qualify.

The Losers
Who gets left out here? It’s those people who are trying to game the system to get maximum value. Those crazy mileage runs that net a ton of miles for cheap? Those aren’t going to cut it anymore. People who are always on the lookout for some super cheap fare to earn a few extra miles during the year might find themselves out of luck. And that seems completely fair to me.

It also leaves people out in the cold who fly other airlines, even joint venture partners. That doesn’t seem to fair to me at all, and it should go beyond just joint venture partners. If you can earn MQMs on SkyTeam airlines, you should be able to earn MQDs as well.

Excluding the partner issue, will there be some corner cases who find themselves in trouble despite doing everything right? I’m imagine so. Hopefully Delta can look at those on a case by case basis. This goes into effect for the first time in 2014, so Delta will want to watch closely to see if there are any unintended consequences. But I don’t expect there to be many.

[If you have more questions, Delta has set up an FAQ with some answers.]

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