My Blog

Tag: skymiles

  • Fast Eddie to Delta Investors: SkyMiles Rollbacks Likely Temporary

    Fast Eddie to Delta Investors: SkyMiles Rollbacks Likely Temporary

    Delta Air Lines, led by CEO Ed Bastian, is in the midst of a turbulent shakeup, with its loyalty program, SkyMiles, at the center of the controversy. The recent series of changes and rollbacks have left loyal SkyMiles members and investors perplexed and frustrated. Bastian, now often affectionately referred to as “Fast Eddie,” seems to be telling two different stories to two very different audiences, leaving many to wonder about the future of Delta’s loyalty program.

    The September Shakeup

    In September, Delta announced sweeping changes to its SkyMiles program, sending shockwaves through the frequent flyer community. The key alterations included a shift to revenue-based elite status qualification with staggeringly high spending thresholds, and a significant reduction in SkyClub access for Delta Reserve and AmEx Platinum cardholders. These changes left many loyal SkyMiles members reeling and questioning their loyalty to the airline; many have already left Delta for competitors, with United reporting record interest in status matches.

    Partial Rollbacks

    Delta announced some partial rollbacks to the changes earlier this month. However, it was, for many, too little, too late. My predictions turned out to be fairly accurate; the elite status thresholds were lowered by 16-20%, and while AmEx SkyClub visits will still be capped, caps were increased by 50-67%. While these rollbacks offered some immediate relief, the underlying issues and concerns persisted. Once trust is broken, it’s tough to repair, and Bastian’s comments to investors aren’t exactly helping the situation.

    Fast Eddie’s Mixed Messages

    Now, Fast Eddie is back in the spotlight, but this time, he is addressing investors. He stated, “There were some things that we did that I thought were maybe too aggressive in trying to get to that equilibrium quickly. We pulled back and said we’ve got to go at this at a much more measured pace.” In essence, Bastian seems to suggest that the originally announced changes are still on the horizon; his only regret is that they were implemented too hastily.

    This mixed messaging leaves SkyMiles members and investors in a state of uncertainty. If I were a SkyMiles elite member, even with the rollbacks announced this month, I’d still be wondering whether it’s time to explore greener pastures with other loyalty programs like American Airlines’ AAdvantage or United’s MileagePlus. Bastian’s statements are effectively saying, “We still intend to pull the rug out from under you; we’re just pulling it more slowly.”

    The Delta Perspective

    Bastian’s comments on Delta’s need for balance, especially in light of increasing demand for premium services, are not completely without merit. The airline must strive to provide a premium experience while maintaining its stability. However, the execution of these changes and the communication with loyal customers have been nothing short of awful, alienating their elites to placate investors.

    Bastian’s remarks about the economic landscape and the importance to Delta of the top 40% of consumers with household earnings of $100,000 or greater provide insight into Delta’s strategic thinking. The overarching message here is that unless you are wealthy and dropping nearly $30k a year on airfare, Delta doesn’t care about you.

    Bottom Line

    Delta’s SkyMiles program is in a state of flux, with changes and rollbacks creating a sense of unease among its members and investors. Bastian’s mixed messages about the future of SkyMiles have only added to the uncertainty. While there may be a tiny bit of merit behind the changes, the execution and communication could have been handled much more transparently and thoughtfully. SkyMiles members must now weigh their loyalty against their desire for a stable and rewarding loyalty program, while investors closely monitor how Delta’s strategy will impact the airline’s financial performance in the long run. Only time will tell whether Delta’s “Fast Eddie” can navigate these challenges successfully.

    h/t View From the Wing

  • Delta SkyMiles Rollbacks: A Step in the Right Direction, but Is It Enough?

    Delta SkyMiles Rollbacks: A Step in the Right Direction, but Is It Enough?

    Last month, Delta Airlines made some significant changes to its SkyMiles program that left many frequent flyers less than pleased. The alterations included a shift to fully revenue-based status, imposing steep thresholds for Medallion status, and severe restrictions on SkyClub access. Unsurprisingly, the blowback from Delta’s loyal customer base was swift and severe, with many elites defecting to rival airlines; American reported record cobranded card signups on their earnings call, while requests for United status matches have gone up “dramatically,” presumably driven by disgruntled Delta elites abandoning ship.

    CEO Ed Bastian’s Acknowledgment

    In the midst of this intense backlash, Delta CEO Ed Bastian, now often not-so-affectionately referred to as “Fast Eddie,” admitted that the airline might have gone too far. He hinted at potential rollbacks to the contentious changes. While these changes didn’t come to light during Delta’s recent investor call, it turns out that my predictions about some adjustments were quite accurate.

    Adjustments to Elite Status Requirements

    One of the most significant SkyMiles changes was the switch to a fully revenue-based system, with Medallion Qualifying Dollars (MQDs) as the sole qualifying metric. However, Delta has now reduced the initially announced steep thresholds for the 2024 membership year, though they’re still a far cry from what customers were used to:

    • Silver Medallion: Reduced from $6,000 to $5,000 (compared to $3,000 in 2023).
    • Diamond Medallion: Reduced from $35,000 to $28,000 (compared to $20,000 in 2023).

    SkyMiles Credit Cardholders Catch a Break

    While the MQD earn ratio on co-branded AmEx cards remains unchanged, SkyMiles Platinum and Reserve cardholders (both personal and business variants) will benefit from a $2,500 MQD boost per card. Holding two of these cards is now an efficient way to attain Silver Medallion status immediately, and holding all four would grant Gold Medallion (though the opportunity cost would be significant, taking most of your “slots” with AmEx). Those signing up for new Delta AmEx products should be aware of new “waterfall” restrictions and plan application strategies accordingly.

    SkyClub Reprieve for AmEx Cardmembers

    SkyClub access for AmEx cardholders will still transition from unlimited access to a capped system, but the caps on visits have been raised slightly:

    • Delta Reserve cardmembers now get 15 visits per year, up from 10.
    • AmEx Platinum members now enjoy 10 visits annually, up from 6.
    • After reaching the visit limit, travelers can purchase additional visits for $50 per day. Previously, this was not an option.
    • A subtle yet significant change is that a subsequent same-day entry to a club no longer uses up a “visit.” Instead, each visit allows unlimited entries for 24 hours after the initial entry, a boon for those on connecting itineraries through multiple airports.

    Enhancements to Lifetime Status

    To retain lifetime status members, Delta is improving lifetime status-earn and making it a more significant upgrade tie-breaker. The new thresholds for lifetime status now align more closely with United:

    • 1 Million Miles: Lifetime Silver (matching United).
    • 2 Million Miles: Lifetime Gold (matching United).
    • 3 Million Miles: Lifetime Diamond (matching United).
    • 5 Million Miles: Lifetime 360 Status (United offers Global Services at 4 million).
    • Million miler levels will be calculated using flight miles going forward, but they’ll honor existing totals earned via qualifying miles.

    Looking Ahead to 2025

    For 2025, Delta has announced new Choice benefits, including the ability for Diamonds to pick $2,000 MQDs and for Platinums to choose $1,000 MQDs. This should make earning status a little easier in the absence of other benefits. Additionally, Diamonds can again select Sky Club membership for two choice selections.

    Assessing my Predictions

    Many of my predictions about the SkyMiles rollbacks were quite close, with MQD thresholds dropping between 16.67% and 20% (I predicted between 20-30%) and visit allowances increasing by 50% and 66.67% (my prediction was 40-60%). As predicted, the $75,000 spend threshold for unlimited visits remains intact. While I partially got it wrong about the MQD earn ratio on cobranded AmEx cards being upped, cardholders of select cobranded products are getting a flat boost of 2,500 MQDs annually.

    Delta’s Uphill Battle

    Despite these rollbacks, Delta still faces an uphill battle to win back the trust of its elite customers. CEO Ed Bastian even hinted when the initial changes were announced that more could be on the horizon. Many have already jumped ship to competitors American and United. As the future remains uncertain, loyalists to the airline will continue to closely watch the evolving landscape of Delta’s SkyMiles program.

  • Delta SkyMiles Changes: Could a Partial Rollback be Announced Tomorrow?

    Delta SkyMiles Changes: Could a Partial Rollback be Announced Tomorrow?

    Last month, Delta Airlines made some significant changes to their popular SkyMiles loyalty program, and the response was far from positive. The sweeping alterations sent shockwaves through the airline’s loyal customer base, with many longtime Delta aficionados expressing their frustration and disappointment. The changes were anything but customer-friendly, and the backlash was swift and fierce.

    Disclaimer: I do not earn any stock in Delta, nor do I have any inside knowledge. This is all educated speculation.

    Here’s a quick recap of the alterations that left many Delta customers reeling:

    1. All About the Benjamins:
      Delta went all-in on a revenue-based status system, effectively making Medallion Qualifying Dollars (MQDs) the only metric for determining your elite status. The problem? The new thresholds were incredibly steep. To attain even the lowly Silver Medallion status, you’d need to spend a substantial $6,000. And for those aiming for the coveted Diamond Medallion status, prepare to shell out a whopping $35,000.
    2. SkyClub Access:
      Delta also scaled back access to its SkyClub network. Effective from February 1, 2025, Delta SkyMiles Reserve and Reserve Business American Express Card Members, who previously enjoyed unlimited visits, would be capped at just 10 visits per Medallion year. The Platinum Card and Business Platinum Card from American Express saw a reduction from unlimited to just 6 visits per year. There was a carve-out, however, for those who spent over $75,000 a year on their card, allowing them to retain unlimited visits. Also announced was the discontinuation of the $50-per-visit SkyClub access for Delta SkyMiles Platinum and Platinum Business American Express Cardholders starting from January 1, 2024; on the same date, the current carve-out allowing Basic Economy passengers to access the SkyClub when using an eligible AmEx card for access would be removed.
    3. Fast Eddie and His Regrets:
      Delta’s CEO Ed Bastian, now affectionately nicknamed “Fast Eddie” by some, acknowledged that the airline may have gone too far with these changes. He made this admission during a speech at an Atlanta Rotary Club event, where he promised that Delta would address the concerns and make modifications to the changes they’d announced. This was late September, and he promised an announcement “in the coming weeks…” Well, it’s been a few weeks, and Delta’s Q call is tomorrow.

    So, here’s the big question: what can we expect tomorrow when Delta Airlines announces these potential rollbacks? Let’s take a look at a few likely scenarios:

    1. Revenue-Based System Stays:
      It’s almost certain that Delta won’t reverse its course on the revenue-based status system – that’s been a long time coming, and follows competitors United and American. However, they might reconsider the steep thresholds that have drawn so much criticism. I expect an adjustment between 20-30%.
    2. MQD Earn Rate Adjustment:
      We might see a slightly improved MQD earn rate on Delta Platinum and Reserve American Express cards. This could be a step in the right direction to appease their loyal customers. Again, look for a change in the ballpark of about 20-30%
    3. SkyClub Access Tweaks:
      While we shouldn’t expect a return to unlimited access, Delta could make some changes regarding SkyClub access. This could come in the form of either an increased visit allowance (my guess is 40-60% more than the previously announced caps) for American Express cardholders or a lower spending threshold to “earn back” unlimited visits (currently set at $75,000 per year). I think it’s more likely we’ll see a higher number of complimentary visits than a lower spend threshold, as $75k happens to also be the magic number to unlock complimentary guest access to the Centurion Lounge.

    But the big question is, will these modifications be enough to rebuild the trust that has been broken with loyal Delta flyers? Many have already jumped ship to American or United, with American Airlines, in particular, having a great year under their new CEO, Robert Isom. Isom’s quiet success in fixing operational issues and improving service quality has not gone unnoticed. Meanwhile, Delta seems to be moving in the opposite direction, with increasing delays, cancellations, and declining service quality.

    As we eagerly await Delta’s Q call tomorrow, one thing is clear: the airline will need to make significant changes to win back the loyalty of their once-loyal customer base. Whether they can successfully navigate these challenges remains to be seen, but it’s clear that the ball is now in Delta’s court.

  • Delta’s SkyMiles Program Takes a Hard Turn, Leaving Flyers Fuming

    Delta’s SkyMiles Program Takes a Hard Turn, Leaving Flyers Fuming

    Well, folks, it’s official. Delta has finally pulled the trigger on changes to its SkyMiles loyalty program that many of us had dreaded for a while. The rumor mill has been churning, and it turns out the whispers were right on the money. Brace yourselves, because this isn’t a story with a happy ending.

    The Unfriendly Shift: Going All-In on Revenue-Based

    Let’s cut straight to the chase. Delta is ditching its old loyalty program and going full steam ahead with the revenue-based model. Forget about those MQMs you’ve been hoarding; it’s all about the cold, hard cash you’re willing to part with now. Your Medallion Qualification Dollars (MQDs) are the new golden ticket, and it’s leaving a sour taste in the mouths of loyal Delta customers.

    If the shift to revenue-based alone doesn’t alienate travelers, the new MQD thresholds might. Obtaining lowly Silver Medallion status will now require $6,000 in MQDs, with Diamond now requiring a whopping $35,000 in MQDs. For comparison, $50k is widely considered the threshold to be considered for American’s secretive, invite-only ConciergeKey status. Sure, they’re calling it “simplification,” but to many, it feels more like a cash grab.

    SkyClub Access Limited Even Further

    On a busy news day like today, this merits a whole separate post, but we’d be remiss not to mention the new restrictions on SkyClub access with select AmEx cards.

    The Devil’s in the MQD Details

    Earning that elusive Medallion Status for 2025 (not 2024, mind you) now means you’ll need to focus solely on accumulating MQDs. In other words, if you’re not spending big bucks with Delta, you can kiss your Medallion Status goodbye. Flights, spend from select Amex Cards, car rentals, and Delta Vacations experiences are your only lifelines now. Miles flown? That’s so last season.

    But hey, if you’re clinging to your stash of Rollover MQMs from 2023, there’s a lifeline of sorts. In early 2024, Delta will generously allow you to convert them into redeemable miles, MQDs, or a mix of both. How generous of them!

    Million Milers Get a Boost

    For those who’ve put in the blood, sweat, and tears (and countless hours on Delta flights) to reach the million-mile milestone, here’s your reward: you move up a notch in Complimentary Upgrade priority, landing in third place.

    RIP MQD Waiver and Status Boost

    Delta SkyMiles American Express Cardholders, you’re in for a rough landing. The beloved MQD Waiver and Status Boost benefits are getting axed come December 31, 2023. Instead, members of the Delta SkyMiles® Reserve American Express Card and the Delta SkyMiles® Reserve Business American Express Card accumulate 1 MQD for each $10 they spend, while those with the Delta SkyMiles® Platinum American Express Card and the Delta SkyMiles® Platinum Business American Express Card earn 1 MQD for each $20 in purchases. Currently, there is no limit to the number of MQDs that may be obtained via this method, but it’s certainly not a 1:1 accumulation like AA’s Loyalty Points scheme.

    International SkyMiles Members: Welcome to the Pain

    For our international SkyMiles comrades, there’s no escaping the harsh reality either. Until now, you were earning your Status using MQMs or MQSs, but starting January 1, 2024, you’ll join the MQD club. Your foreign currencies will be mercilessly converted to USD at standard exchange rates and then turned into MQDs at a 1-to-1 ratio. No more gaming the system, folks.

    So, here we are, at the crossroads of disappointment and disillusionment. Delta’s gamble with these drastic changes may well send a wave of disgruntled flyers to rival airlines like United and American – which while both these programs are also revenue-based, they don’t sting quite as much as the new Delta program. And while American’s switch to Loyalty Points in 2022 angered many at first, their innovative approach to revenue-based status is interesting and (dare I say) has actually put the fun back into earning status.

    As the rumor mill predicted, the future for SkyMiles members is looking a lot less friendly. Keep your seatbelts fastened, folks; it’s going to be a turbulent ride ahead.