Delta has moved the goalpost for more than 100 million members of the SkyMiles program. What does it mean? Delta does not want your loyalty anymore but rather your spending.
Life was simple in 1979 when the first loyalty program of an American airline was launched. How much you flew was the number of “miles” you earned, a currency for a free seat with the airline you were being “loyal” to.
Since then, loyalty programs have increasingly moved from encouraging flying to encouraging spending. And they’ve become pseudo-banks, issuing their own currency (miles) and determining the value of what they can buy daily.
In 2020, United valued its MileagePlus program at $21.9 billion, according to a filing with the SEC. American Airlines said AAdvantage could be valued at up to $31.5 billion. In doing so, the programs became valuable assets that could be used as collateral for loans.
That brings us to Delta’s latest change to its Skymiles program.
Delta has informed members that, effective January 1, 2024, the sole metric that the airline would use to measure members’ loyalty would be Medallion Qualifying Dollars (MQDs). To earn them, one can fly with Delta and other partner airlines, spend on eligible Delta co-branded American Express Credit Cards and book car rentals, hotel stays and vacation packages.
Till the end of 2023, the airline will allow customers to use a combination of miles flown (MQM) or segments flown (MQS) and MQD to achieve status.
Not just that, SkyMiles has vastly raised the amount that would be required to qualify based on Medallion Qualifying Dollars, effective next year.
The implication of this move is that Delta would like customers to spend money on everything that helps Delta’s topline. Delta wants to push more customers to the premium cards by taking away the option to qualify via solely flying altogether. Every time you swipe your card, Amex pays money to Delta to issue you SkyMiles.
Show me the Money, says Delta
The partnership between American Express and Delta is the stuff of legend. They came together to launch co-branded cards in 1996.
In June 2023, at Delta Investor Day, executives proudly put up a slide claiming that spending on Delta co-branded credit cards issued by Amex is approaching 1% of U.S. GDP, hinting that over $250 billion was spent.
Between 2019 and now, the airline has added 25% more cobrand accounts compared to the number of cards in force.
Delta expects to be remunerated $6.5 billion by Amex this year for miles issued to cardmembers, with a long-term goal of pushing the revenue up to $10 billion by 2028.
Those are big bucks at stake, and this new way to qualify for Delta Medallion status is meant to keep steering people in that direction.
Until the end of this year, if you spend $ 25,000 on the Amex co-brand cards, you would be eligible to waive the MQD requirements for the year (and could only qualify based on distance flown or segments flown).
If you spend $250,000 in a year, you could get Diamond status without ever flying the airline.
Next year, those with the Delta Amex Reserve Card will earn one MQD for every $10 spent, while those with the Delta Amex Platinum Card will earn one MQD for every $20 spent.
This is clearly in line with what Delta stated during its recent Investor Day – that there was room to grow the co-brand partnership portfolio by “Premiumization.”
With the changes announced for 2024, Delta is signaling that you need to grant them more of your wallet share to prove you are a loyal customer.
The U-turn on Million Miler status
Regarding Million Miler status, Delta is taking a completely opposite approach compared to annual status qualification. While Delta would like you to spend on non-flying activities that benefit the airline to qualify for annual status, the airline is taking away the credit card spends that used to count towards million miler status come 2024.
As of next year, only the actual number of miles flown with the airline will count towards the million-miler status.
Delta cuts back on lounge access
Delta got some crazy negative publicity this year for all the queues outside Delta SkyClubs. Now it’s trying to turn that to its advantage. As of February 1, 2025, Delta Amex Reserve Cardmembers will be limited to 10 Sky Club visits annually (from unlimited now).
If you spend $75,000 during the year, though, you could unlock unlimited access for the current year and the following year.
Similarly, Amex Platinum members will also be limited to six Sky Club visits per Medallion year, and they will need to spend $75,000 on their Amex to receive unlimited access to the clubs. The message is the same: spend more money on our cards to receive perks.
More Money, less travel
The common understanding for American carriers outside of the U.S. is that they are mileage banks that happen to fly planes. Non-airline sources already contribute more than half of miles earned in major American mileage programs, per HBR.
In this move, SkyMiles took a leaf from American Airlines’ book, which moved to track a new metric called Loyalty Points in 2023 and restricted what would count for status even further.
The reaction on the internet is that people are saying, enough is enough and that Delta went a step too far in its chase for dollars. It may be more than a year from now before we know whether Delta’s plan worked. As I tell my friends in the industry, “Loyalty is a two-way street.” This might just be the move where Delta cuts loose a lot of its member base telling them they are dead wood, or the customers do the same to Delta.
Photo credit: A Delta Boeing 737-800 BriYYZ / Flickr