Delta Air Lines Risks Killing American Express Deal Golden Goose With SkyMiles Changes

Delta has announced limits on access to Sky Clubs using American Express cards, to annual limits on entry with their premium reserve card to a ban on entry by passengers traveling on basic economy fares. They’ve also announced that qualifying dollars is the only metric going forward for elite status, but that card spend earns qualifying dollars – albeit slowly.

  • Silver: $6,000
  • Gold: $12,000
  • Platinum: $18,000
  • Diamond: $35,000

The Delta Reserve card earns 1 qualifying dollar per $10 spend; Delta Platinum 1 qualifying dollar per $20 spent; and other co-brands do not earn qualifying dollars. But booking car rentals and hotels through the Delta portal earns qualifying dollars (you’ll give up hotel points, credit towards hotel elite status, and elite benefits on your stays) and so does booking Delta vacation packages.

Earning status from credit cards alone means spending on the SkyMiles Reserve Amex:

  • $60,000 for Silver
  • $120,000 for Gold
  • $180,000 for Platinum
  • $350,000 for Diamond

Using a Platinum co-brands you’d have to spend:

  • $120,000 for Silver
  • $240,000 for Gold
  • $360,000 for Platinum
  • $700,000 for Diamond

Compare to American Airlines where $200,000 in spend earns top tier Executive Platinum, where doing that on their no annual fee card is sufficient, and where their Citi and Barclays premium cards actually earn bonuses so you could even earn top tier status with $165,000 in card spend.

For most people that travel (income skews higher) they might be able to focus on a single card and stretch to $25,000 in annual spend. Putting that all on the $250 annual fee Platinum SkyMiles Amex would net just 1,250 qualifying dollars. A Platinum cardmember who did this would no longer be allowed to buy a Sky Club day pass. And if they aren’t already Silver they aren’t allowed to buy a Sky Club membership.

If they do get a hobbled $550 annual fee Delta Reserve they’d earn 2,500 qualifying dollars. When they finally earn enough miles for a free ticket, Delta books the cheapest awards into basic economy, and they’d now be turned away at the club.

  • Delta and American Express want more cardmember spend. You don’t get unlimited lounge access from your card anymore without $75,000 spend. You don’t get status without big spend on a premium card.

  • Just having the cards is worth less. They cut benefits to having the premium Reserve card.

  • We will see some increased spend and a lot of cancels.

  • We will see fewer top elites and fewer people in Sky Clubs.

  • They are doubling down on big spenders when managed business travel is stagnant.

  • The rate of qualifying dollars earned from Reserve card spend is semi-reasonable. Requiring having a neutered Reserve card to get decent qualifying dollars for your spend is absurd.

  • Delta owns Atlanta and the Upper Midwest. Those customers have little choice but to fly Delta but they don’t have to stay on the devalued SkyMiles hamster wheel. So far all of the program guttings haven’t cost Delta. At some point they will.

  • Delta is a slightly more reliable airline than competitors. Their flight attendants are a little friendlier. Their Sky Clubs offer more food. But in competitive markets they demand too much and give too little.

  • At the end of the day you need to commit hard to Delta Amex spend for status, status is worth less (eg no more confirmed business class upgrades when you buy international coach), and in the end you have… a whole lot of SkyMiles that are worth less than what you would have earned on other cards.

  • And many people don’t have the spend to do it. $25,000 spend on a Delta Platinum Amex only nets 1250 qualifying dollars! And that is pretty normal spending.

  • So customers either can’t or shouldn’t play along. I would have thought that gutting the value of their points for free travel would have killed their golden goose but it didn’t. Will this push their loyalists too far?

Delta says that nearly 1% of GDP is currently being charged to their Amex cards, why would they risk this? A lot of Delta cards are going to be cancelled since they no longer have unlimited or any access to Sky Clubs, and since the thresholds for earning status are so high.

There will be some people who double down on their Delta Amex cards, but at the end of the status chase if they can put hundreds of thousands of dollars of spend on those cards, they will have… Delta SkyMiles instead of more valuable rewards currencies they could have earned. The opportunity cost is high!

The airline committed to bond investors not to devalue the program as part of mortgaging SkyMiles for $9 billion in 2020. In this context, that means making material changes that would reduce revenue largely from American Express. The bet here is that they’ll drive more card spend, not less. We’ll see if they’re correct that customers continue to stick with them.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. @Alan – agree the changes are tough on many but understand this was a joint DL/Amex agreement. Given the long term (through 2029 as I recall) contract w Amex there is no way DL does this alone. You may only see the lounge access hurting Amex cardholders but DL’s decision to discount award travel only for Amex cardholders (15%) and also go to a spend based elite program both help Amex

  2. ziggy,
    whether you see the data or not, Delta’s share in the corporate travel rich major northeast markets – esp. NYC and Boston – is growing both because of DL’s own efforts and because of actions by other airlines, including AA, B6 and UA.
    DL, on a system basis, is raking in new Skymiles members and has a very good track record of putting Amex cards in their hands. A percentage of those do end up as high revenue passengers and card holders.

    and, yes, DL and AXP both worked on this because they both have the same problem; they both passed out millions of cards w/ lucrative benefits and it worked for both during the pandemic. Now, they get to pick out the most valuable card members and passengers they acquired.
    Some will leave, yes.
    Others will stay and grow their contribution to Delta and Amex.
    That is reality even though there will be people that will argue that it cannot happen because it negatively impacts them

  3. And you put all that spend to hit Diamond only to realize there’s no seats available for upgrades because Delta sold them all for $50 extra. WTF is the point of chasing Diamond anymore? GUC that require premium economy to get up to Biz? GTFO. The perks are nowhere near the opportunity cost now. Bye Delta!

  4. It will be interesting to see if customers are smart enough to see that there is inadequate value to put spend on DL’s Amex cards and that chasing elite status is no longer valuable. Want First Buy First, and put spend on more valuable cards.

    Or are DL’s customers such sheep that they will continue to enrich DL & Amex while not getting an adequate return? DL is betting that their customers are uninformed sheep. The Skymiles program head once told me that: they aren’t interested in customers who understand the program, there are enough who don’t act in their own self-interest.

  5. Frequent Flyer programs are inherently break even if not money losing as Air Canada found out with Aeroplan’s spin-off, which failed and was repurchases for brand value.

    1% of GDP with huge costs and, especially for Delta, a brand-destroying problem with its own paying customers being.crowded out from Delta lounges by Amex’s, is definitely best restructured.

  6. @ Tim Dunn — Regardless of what we decide to do regarding our DL DM statuses, I can guarantee two things — 1) it won’t involve spending one dime on DLs POS credit cards or 2) spending any new money on DL flights other than when using Companion certificates. We may very well retain our DM statuses, but we will take pride in hopefully being DLs least valuable DMs.

  7. This ends my loyalty to Delta to be honest, even though I am based out of Atlanta. Over time their miles got really devalued, that locking those with Delta is a waste of money, and the 15% discount if you have Delta Amex is BS because current redemption is the highest its ever been that 15% does not do much. Delta One to Europe from Atlanta with the 15% is 500k miles, which is INSANE. But if you go to their partner airline and get that same flight, you can score it for anywhere from 130-250k and with transfer bonuses from credit cards, this lowers it even more.

    Ed showed what really matters to him and that is MONEY and shareholders.
    I consider myself upper middle class, make good money, but also don’t like to waste money. Delta Amex was never a great card, and I only used it till I hit the 25k spend to waive my MQDs. From there I moved onto cards that are much better. I have been constantly loyal to Delta and their partners to maintain Platinum status with them, never cared to chase Diamond to be honest. That meant paying more for flights domestically and especially internationally.
    With the new program tiers, while I have secured my Platinum 2 months ago for 2024 already, if this was already in force, I would have barely been Silver. There is no way I would spend $18k with Delta, let alone anything on their Amex card to try to get to Platinum anymore, and Silver and Gold are not worth it.
    My main domestic travel has plenty of options on United and AA (though I do not care for them), that I will just proceed with buying the class I want to sit in, dropping my Delta Amex and not being loyal anymore. If Delta happens to be a better deal for my route, I will buy Delta, but if not I will buy whomever is better (except low budget airlines).
    On average delta has always been $100-200 higher domestically for my destinations (80% of the time) and internationally easily $500+. Especially premium economy or business.
    So goodbye Delta and Amex Delta, I am sure my savings from overpaying for tickets for years to maintain status will pay for themselves by getting myself the best deal and no longer stressing on changing a status for an airline that just DOES NOT CARE.

  8. Get rid of the little people!
    The poor pedestrian peons spending less than 75k a year
    They are mere clutter in our delta clubs and planes!

  9. @Tim Dunn

    “Whether you see the data or not”

    You haven’t got any data! The changes to SkyMiles were announced late (ish) on Wednesday and less than 24 hours later you were claiming that there were “more than enough people” happy to continue chasing SkyMiles status despite the changes.

    You have absolutely no evidence to support that statement because (and this is the important bit) not enough time has passed since the changes were announced. In fact, the changes haven’t even kicked in yet so there’s no knowing how people will react.

    Just because you *think* something is true doesn’t make it a fact.

    Let me put it another way: If Garry had written “something along the lines of “following these changes, there will not be enough people chasing SkyMiles status to keep the program healthy”, how long would it have taken you to leap to your keyboard to ask for evidence to back up that claim? And what would you have said if no evidence was forthcoming?

  10. ziggy,
    there is ample data and I have presented it. Whether you or anyone else likes the data doesn’t make it any less so.

    Even other people accurately note that Delta often prices its product above its competitors, they are less likely to give upgrades or offer deep discounted premium cabin awards.

    People pay MORE for Delta services which is what any company does. For those that moan about how Delta is run just for the stockholders, I simply have to ask if they truly just figured that out and who they think American, United, Southwest or any other large jet airline is operated for.

    And Delta’s network strength – the biggest factor in determining how well any company access top tier passengers – is stronger than ever in NYC and Los Angeles, two of the 3 largest corporate travel markets, leaving United as the largest just in Chicago. AA is first place in precisely ZERO of the top 3 markets.
    Delta has grown Boston and is now handedly the top revenue carrier in that top corporate travel market.
    Delta still has higher market share and revenue in its four interior US hubs than American or United have in their interior US hubs.

    American and Delta used to be very comparable in size in many medium sized markets and yet, among the non-hub cities, Delta is larger than American in many, many more now.

    AA execs are right that their schedule is their product – or at least the largest part of it – and yet AA has lost considerable share in multiple markets while Delta has grown.
    UA is simply too small in many medium sized markets to get corporate contracts that involve medium and small cities.

    Airlines have always known that size and network breadth matters; that is why there have been so many mergers.

    Yes, people can cut off their nose to spite their face and not fly Delta from cities where they are clearly the largest but few people will do that for long.

    There are a whole lot of people that do not generate the level of business to be considered elite for Delta any more and Delta promises a better premium travel experience which is notable considering they already earn a revenue premium to the industry.

    Delta is using the quality of its service and the breadth of its network – which continues to successfully grow in regions of the country where other carriers were ONCE strong – to gain access to more and more premium passengers.

    Delta and Amex both offered way too many elite benefits to too many passengers during covid and are bringing it back to reality for many people but retaining a higher quality product to a smaller set of elite passengers.

    Notions that Delta is making some grand mistake are just wishful thinking from people that can’t admit that they don’t make the cut.

    Delta’s position as THE global airline for premium travel revenue is growing. Their strategies are working. There are more and more people coming into Delta’s ecosystem as premium passengers than are leaving. there is ample data to show that for those that want to see it.

  11. I’m done with it. This is a very costly game with and amusement park prize at the end. Not worth the investment. It’s for people who just want to say the have it. Makes little sense.

  12. Here’s a thought. Why doesn’t Delta simply sell Diamond Medallion status for $5000 cash? Here’s the reasoning: The Amex Interchange fee is 3%, and I would be surprised if DL gets more than 50% of this or 1.5%. 1.5% of $350,000 (the amount needed from spend alone on your Reserve Card to get Diamond) is $5,200 – which would be how much Delta would get from Amex to grant Diamond status to that Amex Reserve customer. Or another way to calculate the cost for Diamond status is that DL’s profit per “passenger seat mile” is approximately 11%. So if it takes $35,000 MQD to earn Diamond, DL’s profit from that $35,000 spend on tickets is 0.11 X $35,000 = $3850. That is, on average, DL gets $3850 profit from those $35,000 worth of ticket sales. So you think? Are my calculations ball park correct Ed?

  13. @ Don — You nailed it on the head. All Delta cares is that you contribute $4,000 – $5,000 to their profit, and you are good enough to be Diamond.

    @ Tim — Of course people who live in hubs will fly Delta because it is convenient. Few people will argue with that. That doesn’t mean that those same people are stupid enough (or able) to spend hundreds of thousand of dollars on a Delta credit card to earn low-value SkyMiles and to gain fairly useless status. Mark my word, Delta will LOSE credit card volume (adjusted for inflation) if they do not modify this new system. They have made a major mistake by not leaving a gaming component in the MQD system. That said, I expect Delta will end up offering lots of promotions once they see their mistake. Finally, then they will of course just give away Platinum and Diamond status to new customers in order to hit their desired elite targets.

  14. @Tim Dunn

    You’re doing a politician-level job of ignoring the facts and ploughing ahead with what you believe (or want others to believe) regardless of how factually correct it is.

    You have presented absolutely nothing to support your statement because you keep regurgitating data that was sourced before SkyMiles changed quite dramatically. That data is now obsolete. It proves and means nothing.

    You said (as a statement of fact) that following the changes to SkyMiles program, there are still “more than enough people” happy to continue chasing SkyMiles status, but you have no numbers to back that up.

    All you keep falling back on is old data (pre Wednesday’s announcement) and any data on people’s feelings towards SkyMiles and the value of SkyMiles elite status (the data that you keep regurgitating) is utterly irrelevant because it was data taken at a time when SkyMiles and its associated co-branded credit cards looked very different to how they look now.

    People may keep flying with Delta when it suits them (I’m not suggesting the whole of the country will no longer fly the airline just because of this devaluation), but being happy to fly with Delta and being happy to chase status with Delta is not the same thing. You appear to think that it is.

    The fact is that you have absolutely no idea how many people are now happy to chase SkyMiles status because the data for that simply does not exist in the public domain (I’m not even sure that Delta has those figures yet), so please stop claiming otherwise.

    Better yet, stop living in a world where Delta (a corporation who really couldn’t care less if you live or die) can do no wrong. That’s deeply, deeply unhealthy.

  15. ziggy,
    there clearly is no data that cites consumer behavior over the past 24 hours and even if there was, it wouldn’t predict any long term impact to Delta.
    Every company knows there is a certain amount of noise early in any strategic move.

    You want to believe that Delta will kill itself over this month – and Gary even suggested that in the article.

    The simple fact is that Amex and Delta both carefully studied tons of data and knows exactly the impact and to whom.

    Further, they have done stuff like this before and not just survived but become stronger despite these moves.

    Your comments will look foolish in a couple years but, by all means, keep making them if it makes you feel better.

  16. @ Tim Dunn — Like any predictions, Delta and AMEX’s expecttaions are based on assumptions, not facts. Past performance is not a guarantee of future performance. Under their misguided plan, they will LOSE DL Amex spend. That said, they will adjust course as needed to solve this problem. You act like the management at Deta and AMEX have never made any mistakes. They have made plenty, I am sure.

  17. @Tim Dunn

    With respect, the only thing foolish here are the statements that you put forward as fact when you haven’t got an iota of evidence to back them up.

  18. Tim “Delta’s position as THE global airline for premium travel revenue is growing.” Keep telling yourself that. We choose several other carriers that make Delta look like a threadbare Trailways bus when we want real premium service.

  19. In the past couple of years the annual fee on my Amex Platinum has gone from $550 to $695, and my Authorized users fees have gone from $175 (for two AU) to $195 x 2 ($390 annually). So my annual total up-front cost of keeping this card in my wallet has rapidly increased from $725 to $1,085, a whopping 50% increase (49.65% if we’re being exact). And in reward for these eye-watering fee increases, Amex is allowing Delta to significantly de-value one of the most important benefits of the Amex card – the right to access the Delta lounges whenever we fly on Delta. I’m not mad at Delta, I’m mad at Amex for allowing Delta to do this to Amex cardholders. To be clear, six visits to Delta lounges can be three round trips per year, which is not even one trip per quarter. My wife and I regularly fly LAX-BOS round-trip to visit our daughter. We will typically hit the Delta lounge on day of departure at each end of that trip, and the Delta lounges in L.A. and Boston are both really high quality experiences. And that’s assuming we fly non-stop and don’t make a connection along the way. If you book flights with a connection, you can easily burn 4 visits in a single round trip. We’ll burn through our six visits pretty fast. And while one would expect Amex Centurion Lounges to fill the void, the fact is that the Centurion Lounges network is woefully inadequate. The lounge at LAX is essentially useless for domestic travel, tucked out of the way and hard to access in the International terminal. And there are no Centurion lounges in Boston or in Chicago (or anywhere in the entire Midwest of the country). But I guess I’ll just have to be happy with my completely useless $300 Equinox credit.

    I have valued my Amex card, but for me it may be time to really evaluate the Citi AAdvantage Executive Card and the United Club Infinite Card, which offers lounge access to AA and United flyers.

  20. Delta Platinum since 2005 with a few years of Diamond. Million Miler with Silver for life. I called and cancelled my American Express Delta Platinum card. There is no reason to keep it now. I will never get the spend to make Gold or Platinum. I still have upgrade certificates and will use them.

    I will be able to get AA status with my citi Bank card. AA here I come!

  21. I feel like Delta does just what’s necessary to keep planes full: Delta’s 767-400 “Trailways bus” [AlohaDaveKennedy] to get a nonstop flight from CVG-CDG, their 15% miles redemption discount for (PLEASE) keeping their credit card, their tired iron for a lot of short nonstops.

    Don’t underestimate Lisa’s comment above: costly game with an amusement park prize at the end. It took a while for the extent of Delta’s redemption price rises to soak in. This announcement will take a little longer. People have to be turned away from lounges they used to visit regularly. They have to get the renewal bill for their credit card and try to figure out what it’s good for. Check back next summer.

  22. Let’s not forget the damage Costco did when it ended it’s relationship with Amex. While DL and Amex will remain a force, it’ll be interesting to see what losses Amex suffers as a result of the new program requirements of DL.

  23. @Charles Bass – Amex leaving Costco didn’t hurt Amex so not sure what you mean. It was a business decision when the Costco/Amex deal was up and Costco bid it out. The terms they wanted from Amex weren’t acceptable (and Amex had all the demographic and spend info on that set of cardholders so they could make an informed decision). Visa bought the business. Not sure it is profitable for them or not. Costco is a hard negotiator and ended up with an extremely favorable arrangement

  24. I’ve thought for several years now that Skymiles status with Delta is not relevant for me, even though my air travel is all Delta. My clients pay for coach and I typically purchase an upgrade to 1st class. It wouldn’t matter what airline I used since I buy the upgrade, Delta is just most convenient coming out of MN.

    I went to an Amex Platinum (not branded) several years ago when Delta quit letting me bring colleagues on non DL tickets into the Sky Club with my (business? professional?) Sky Club membership. It was cheaper to pay the annual non-branded Amex Platinum fee for my personal access.

    I’m definitely dropping my co-branded Delta Amex Gold, which I’ve only been using for Lyft. I will also have to consider dropping the non-branded Amex Platinum; a six visit limit to the Sky Club really limits the value of the card. I’m in the Sky Club 30+ times per year for business travel.

    I guess Delta will drive my business to other airlines on a case-by-case basis since the loyalty benefits are no longer enough for my loyalty.

  25. I have been a loyal Amex platinum card member for more than 20 years. I was once a loyal Continental flyer but after they were purchased by UA, I switched to Delta solely due to the Amex lounge benefit and have been Gold Skymiles most years. I love my Amex card and as the annual fee has risen dramatically, I have tried to justify it with the benefit of the unlimited lounge access. I travel several times per month and sometimes stop in the lounge for only 15-20 min.

    However, these new delta changes are making me reevaluate everything. I have decided to switch to AA and am going to get a Citi AA card as well. I have a lot of travel coming up and am hoping AA will put out some status match challenges to win over delta customers. That way I can make it happen quickly and leave delta behind with no second thoughts.

  26. Wife and I are not renewing our DL AMEX Reserve cards. Just got an AA Mastercard with a nice welcome bonus. Using this now and switching recurring bills like AT&T to the Mastercard. Not worth getting back to Diamond on DL. Only reason we did this was to get the free Global Upgrades. Just booked our next international flight on Emirates in their Business class (not first unfortunately). Figured we would check them out. Previously we would not have strayed from DL or Skyteam.
    Seems that Ed is forgetting who got DL through some tough times. I recall riding on some pretty worn MD-88s to get my first Million miles. Missed the suitcase deal – that went away. SkyMiles are devalued – although seems only our kids use them. Now they have set the bar too high for too little in return – I’m just throwing in the towel.

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