Delta Plays A Game Of Flip-Flop With Their Elites

As you might have seen in the last couple of days, Delta has published their elite qualification requirements that will kick in for status for the 2016 member year. While much of it was left unchanged, they did raise the somewhat recent revenue requirement for status. Check out the changes here and a (rare) commentary on my part as I let it out on a Saturday. 🙂

The Change

To recap, Delta announced back in 2013 that 2014 would see revenue requirements for their elite flyers. What that meant was that Delta set fixed amounts that the different elite levels had to hit in spend on Delta tickets (not taxes/fees) in order to reach elite status. This is in edition to the mileage/segment requirements. The levels were set to look like this:

• Silver Medallion: $2,500 in spend and 25,000 MQMs or 30 segments
• Gold Medallion: $5,000 in spend and 50,000 MQMs or 60 segments
• Platinum Medallion: $7,500 in spend and 75,000 MQMs or 100 segments
• Diamond Medallion: $12,500 in spend and 125,000 MQMs or 140 segments

Under the new changes for the 2016 member year, they will increase the spend requirements by 20% t0 $3,000 (Silver), $6,000 (Gold), $9,000 (Platinum), and $15,000 (Diamond).

Of course, they will continue to allow you to buy your way out of the revenue requirement if you spend $25,000 on a Delta-branded American Express card in a year.

The Commentary (or the Flip-Flop part)

For the record, I have been a Delta elite flyer for a number of years and always appreciate the flying experience with them. I think they are a great airline and I always appreciate the upgrades that I have received. I actually was one of their Charter Diamond Medallion members so I was able to appreciate the experience as one of their top-tier elites for a couple of years.

When I write about airline program changes or frequent flyer changes, I do not normally provide much in the way of commentary. Sometimes, though, I feel I just can’t help myself. 🙂 Plus, it is a Saturday, so I will let this fly.

Let me say – I personally do not have a problem with the raising of the revenue requirement. If I was going to retain status with Delta, I would simply bypass the revenue requirement by putting $25,000 on one of my Delta Amex cards, so the hiking of the requirement does not bother me as an individual passenger.

My problem lies in how they are presenting this new change to their passengers and elite members. They have stated “When everyone’s an elite flyer, no one is” as their premise for the increase in revenue requirements. They say that it is a More Exclusive program for 2016. Ok, this is where the flip-flop part comes in. Delta has been minting elite status like dollar bills for years. If everyone is an elite flyer, it is because Delta made it that way. To all of a sudden take a tone that they are the ones creating a more exclusive program, than they should take a step back and realize a few things about the program they have already created.

You Can Have Elite Status Without Ever Stepping on a Plane

Delta has two consumer credit cards and two business credit cards that both allow you to earn MQMs (Medallion Qualifying Miles) by spending. With the Delta Platinum Amex card (consumer and business), you need to spend $25,000 to earn 10,000 MQMs and you can do that twice per card per year. So, with one consumer and one small business Delta Platinum card, you can earn a total of 40,000 MQMs – just 10,000 shy of Gold Medallion.

Then, with the Delta Reserve card (consumer and business), you earn 15,000 MQMs after spending $30,000 and that can be done twice per card per year. So, with one consumer and one small business Delta Reserve card, you can earn a total of 60,000 MQMs. Combine that with the the MQMs earned with the Delta Platinum cards and that gives you Delta Platinum status (second highest tier) with a 25,000 MQM cushion to roll into next year…

And you have never stepped foot on an airplane. 

How is that an exclusive flyer’s program? Sure, it requires heavy spend – $220,000 across the cards and $1,280 in annual fees – but that is nothing compared to what the average Delta Platinum is spending to get his/her status.

Speaking of Credit Card Spend – You Can Buy Your Way Out of the Revenue Requirement

Oh, those nice Delta American Express cards (which I have) that can get you status by spend? They also can grant you a waiver in meeting the new revenue requirements for status – if you spend $25,000 in a year on one. Again, how is this creating an exclusive program when they are granting a huge waiver to anyone who can spend $2,084 on a credit card in a month?

Monster MQM Promotions

Remember my statement that they created the glut of elite flyers in their program? A few years ago, they had a MQM promotion going on that allowed people to fly out of four separate cities and earn double MQMs anywhere they flew to on Delta. That meant, instead of earning 21,000 MQMs by flying a sub-$1,000 ticket to Singapore, you could have earned 42,000 MQMs! That makes you almost Gold by flying on a ticket that is 1/3 of the revenue requirement for Silver status! Remember the waiver granted to Delta credit cardholders who spend $25,000 in a year? If that spend is on a Delta Platinum card, that gave you another 10,000 MQMs – there you are as a Gold flyer with only one flight. Of course, the revenue requirements were not there back then, but they have some more targeted double MQM promos since then. But, with that one period, there were a ton of bonus MQMs handed out which caused the elite ranks to swell. Again, that was a while ago, but if Delta is so concerned about creating an exclusive program, it is only because they opened the floodgates a few years ago.

MQM Transfer Bonuses

Around that same time, they were granting MQMs as part of a transfer bonus from American Express and their Membership Reward points (which they will be restricting the transfer of next year). If you transferred 100,000 Membership Reward points to Delta, you would receive a 50% bonus plus 25,000 MQMs! That made hundreds (if not thousands) of people an easy Silver – even if they never flew on a Delta flight. Of course, most of the people taking advantage of that promo were using those MQMs to boost their status another level. In other words, the higher-tier elites were swelling in number again because of Delta doling out MQMs.

Rollover MQMs

So, you might think that those big bonus days were in the past so who cares now, right? Wrong! Many people rolled over a ton of MQMs from those (and other) bonuses, thanks to the rollover program by Delta. Remember that spender that maxed out the bonus MQMs by spending on the four Delta Amex cards? That would give him/her 100,000 MQMs in their first year. They would receive Platinum status and rollover 25,000 MQMs towards next year. Do that spending again and they have Delta Diamond status – without ever having to step on a Delta plane. Obviously, what use is the status if you are not going to use it, but I am simply illustrating that one can be a top tier without having to fly, thanks to the credit cards.

They Do Not Really Want To Make An Exclusive Program

If they really wanted to make the Delta elite program more exclusive, they would have done what United did – not allow flyers to use credit card spending to earn MQMs towards Diamond status. That would have certainly made the Diamond numbers fall off as each Diamond would have to spend over $15,000 on Delta tickets!

Another thing they would have done if they truly wanted to make it exclusive would be to have limited the number of MQMs that could be earned by spending. Or, they would have ended rollover MQMs. Or, they would have tied MQMs to revenue like they are for Skymiles next year.

While I am sure those were all things discussed, they have not been implemented. That is not to say they won’t be at some point, but they have not yet. My point is – unless they are willing to implement them now, hold off on the exclusive program part of things until then.

Summary

I will say this – if they did enact those policies, I would never by a Delta elite flyer again! I do not spend enough with them to meet MQM requirements if tied to revenue. So, I am not saying this simply to express disgust at having to share with others – I have, in fact, been the benefactor of many of those promos and spending opportunities. Don’t get me wrong, for me, I am happy that those exceptions exist so that it is easier for me to have status with Delta. That doesn’t make it that exclusive. 🙂

My point is simply this – instead of creating an exclusive program for flyers, they are really separating it into two groups. It is the group that really does spend a lot with Delta and earn status by spending with them and flying with them. And their is the group (that I would have fit into) that will be buying their way out of the revenue requirement with the Delta American Express cards. This is really a play to get more people to use their credit cards more, especially since they are limiting the transfer of other points into their mile program. So, don’t get all excited about the language they have chose to introduce this new program because it is really about the spending, not the flying.

What is your view on this new change with Delta? Am I way off base here?