This is not a points and miles blog, and I do not personally care one bit about airline status. With that background, I understand that my point of view on this subject comes from a very different perspective than most of the noise that’s out there. It may not come as a surprise to you that I really don’t mind the new, dramatic changes that Delta has rolled out to its SkyMiles Medallion elite status program as well as its lounge access rules. Could Delta have rolled this out differently? Sure. And will I still like it in a year? That depends.
Though I don’t want to get too much into the weeds, we do need a summary before we can really get into this. So… Delta has decided to make the following changes to elite qualifying starting in 2024 for earning 2025 status:
- Medallion Qualifying Miles (MQM) and Segments (MQS) will be eliminated, and qualification will now only be earned through Dollars (MQD)
- MQDs can now be earned not just by flying and credit card spending but also by booking hotels and rental cars through delta.com and booking Delta Vacations
- The MQD waiver that credit cardholders had is gone
- Annual MQDs required to earn status are increasing dramatically:
Further, when it comes to lounge access:
- SkyMiles Reserve Amex cardholders will be limited to only 10 lounge visits per year
- Amex Platinum (not SkyMiles, just normal Platinum) cardholders will be limited to only 6 lounge visits per year
- These limits are waived if you spend more than $75,000 per year on the card
- SkyMiles Platinum Amex cardholders will no longer have lounge access included
- Cardholders with lounge access will not be allowed in the lounge if they are traveling in basic economy
I left out a few smaller changes, but you get the point. As you can see, this is universally bad news for a whole lot of customers, which is surprising. Usually airlines like to try to have some kind of good news threaded in with all the bad so they can lean on it. This time, what Delta touts as good news is the fact that it is a simpler program now that there’s only one metric. Simplification is generally a nice thing, but that’s not going to make anyone happy who is about to drop levels because of the huge increase in qualifying.
I wish Delta would just use different messaging instead of trying to sugarcoat it with this silly “simplified” pitch. Delta should just have gone with reality. I know it sounds crazy, but Delta is trying to solve problems here, and it’s going to do it effectively. That’s the headline. Rip the band-aid off.
First, Delta loves to say how if everyone is elite, then nobody is. Presumably Delta is trying to manage its program to a certain number for each level of status. I would imagine that ideal number has probably changed over the years, because the benefits have been diluted. The number one benefit, for example, is an upgrade, right? But Delta was busy crowing last week that it sold 74 percent of First Class seats in August. There are fewer upgrades to be had, so the number of top tier elites has to drop if the benefit is going to be valuable.
This time around, Delta decided to really lean into the amount of money that travelers spend instead of how much they fly. That means they had to make some guesses about exactly where the numbers will land, but clearly the numbers were too high before for Delta’s comfort level considering the current state of affairs.
Now here’s what we get to the “evil genius” part of this plan. The big shift to revenue combined with the much higher qualification threshold now makes having a Delta credit card essential if someone really wants to reach a higher level of status. Amex loves its Delta credit card program because it’s the biggest in its portfolio. (It became even more important when Costco flipped to Visa.) Delta loves its credit card program since it brings in billions of dollars a year, but it has made premium experiences like lounges worse due to so many people now having access. Because of this, Delta has created a monster where it loves and hates its financial overlord. (Delta is not alone in this, by the way.)
With this new elite qualifying plan, Delta adds value to the Amex cards by making them essential for climbing the status ladder, and by doing that, the airline is able to cut back elsewhere. This is what enables the lounge-access change. Everyone who has walked by a SkyClub is well aware that there is an overcrowding problem. Credit card signups have worked too well, and the lounges can have lines to get in. Delta has tried to lighten the load in a few ways, but it couldn’t make a meaningful dent unless it tackled the Amex problem.
This MQM shift provided cover for Delta to put restrictions on lounge access for Amex cardholders, hopefully lightening the load enough that lines will disappear and travelers may actually be able to find a place to sit. (As with elite status, I do not personally care about lounge access at all, so I again have a very different perspective.)
Customers love to complain about SkyClub overcrowding, but they also complain about any devaluation of their benefits. Andrew wrote a joke in last week’s Cranky Weekly Review that was actually the most correct statement I’ve seen so it’s worth repeating.
The idea that there are too many Delta elites and too many people in SkyClubs is generally accepted by most customers. Most want the herds culled exactly up to the point at which they qualify for Medallion status and club access — anything less is too generous and anything more is ruining the program.
But what are they going to do? If they are in a Delta hub away from the coasts, they aren’t going anywhere. Even if they’re in New York or Boston, are they really going to start flying the chronically-unreliable JetBlue or if in New York, trek across the Hudson to fly United? (Yes, some wll do the latter, but the risk is lower when it requires an airport change.)
The real risk is on the west coast. Alaska is undoubtedly waiting with open arms in Seattle while LA is anyone’s game to play. But Delta, unlike American, still has a very strong sales team so you can be sure that in places like Seattle and LA, there will be ways to sway the corporates by granting higher level of status. I think the risk is relatively minor.
Perhaps the bigger risk is in the spokes, and especially Austin, Charlotte, Chicago, Dallas/Fort Worth, Denver, Fort Lauderdale, Houston, Indianapolis, Jacksonville, Kansas City, Las Vegas, Miami, Milwaukee, Nashville, New Orleans, Orlando, Philadelphia, Phoenix, Portland, Raleigh/Durham, San Diego, San Francisco, Tampa, Washington (Dulles and National), and West Palm Beach. Those are all cities that have lounges today, but most travelers in those cities can’t fly nonstop to their destination on Delta.
Think about why this matters. If someone is flying from Atlanta, they are probably flying nonstop. That means if they want lounge access, they only want it before their flight. But someone is starting in one of those spokes, they are most likely connecting. That means they’d want lounge access in their hometown as well as in the connecting hub. In other words, the 10 lounge visits for those Reserve cardholders get used up twice as fast for someone in those spokes.
So, yes, there is some risk, but it all feels pretty minor in the scheme of things. This change allows Delta to control its elite numbers more directly by having only one metric. It also helps Delta to simultaneously increase the value of having a credit card while making a dent in the lounge over-crowding problem. That’s no small feat.
Why, then, do I say that next year I may feel different? Think of it this way. Let’s say you fly roundtrip from Atlanta to DC every week. Fares are high at this point in the demand cycle, so maybe you’ll be paying $500 roundtrip. But what happens when the economy turns down and fares drop? If you’re still traveling the same but only paying $250 roundtrip, then you’re earning half as many MQDs.
If Delta is truly managing to a number, then the qualifying thresholds should actually decrease when we’re not at the demand peak and fares decline. If that happens, then I think Delta is doing this right. But if, as most people have to assume based on the program’s track record, the number never goes down, then it’s just all a song and dance to justify the jacking up of the threshold. We’ll find out eventually which way it goes, but I still think this move makes sense right now.
