After six years and millions of hours of labor, Delta Air Lines has officially completed the last phase of its $2.3 billion overhaul effort at Los Angeles International Airport.
15.09.2023 - 21:49 / skift.com / Delta Skymiles
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.
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
After six years and millions of hours of labor, Delta Air Lines has officially completed the last phase of its $2.3 billion overhaul effort at Los Angeles International Airport.
As the summer travel season comes to a close, one airline is giving travelers a reason to start planning next summer's vacation. Delta Air Lines announced it will be operating its largest trans-Atlantic flight schedule ever, debuting just in time for summer 2024. The airline will be adding new destinations including Naples and bringing back service to Shannon, Ireland. According to Delta, next summer it will operate 260 weekly flights to 18 countries in Europe, Africa, and the Middle East from New York’s John F. Kennedy International Airport (JFK). This includes a new flight from JFK to Munich three times a week that will start on April 9, 2024, and a daily nonstop flight to Shannon, Ireland that will begin on May 23, 2024. The carrier will expand its existing service to Italy — it already flies to Milan, Venice, and Rome — with a new daily service to Naples. It will also resume service between Atlanta and Zurich, Switzerland, four times a week, which had originally been cut in 2019.
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I typically refrain from commenting on ebbs and flows of loyalty and frequent flyer programs. Why? It’s somewhat uninteresting. My perspective is there will be a never-ending shift towards optimization, goosing revenue, and a focus on quarterly results by travel companies.
Two years ago, I took a daytrip from Boston to Los Angeles to hit AAdvantage Platinum Pro frequent flyer status on American Airlines. The status I earned on that trip went along with two other airline elite status levels I also held at the time: Delta Air Lines Platinum Medallion and United Airlines Premier Gold (I hit the higher Premier Platinum tier the following year).
The way passengers earn status for Delta Air Lines is about to change.