There has been much talk of ‘revenue-based programs’ — rewarding greater mileage earning for higher spending, pricing awards based on the cost of a paid ticket on the redemption side.
Some programs have considered the former, others the latter, and still others both.
Today Delta briefly published on their website new revenue-based elite qualifying rules but quickly pulled back the information. The text was quickly archived here.
Earning Medallion Qualification Miles (MQMs)
Beginning March 1, 2013, the MQMs SkyMiles members earn on select fare classes will change:
For Delta-marketed flights, the MQM bonus for First/Business F and J fare classes will double from 50% to 100%, and Economy M fare class will no longer earn a 50% MQM bonus. This change will apply to tickets purchased on or after March 1, 2013.
The above changes also will apply to F-, J- and M-equivalent fare-class tickets on Aeromexico-, Air France-KLM-, Alaska-, Alitalia-, and Virgin Australia-marketed flights. This change will apply to travel flown on or after March 1, 2013.
The MQMs you earn on certain other partner-marketed flights will adjust for travel flown on or after March 1, 2013. Visit delta.com/partnerairlines for details by carrier.
Please note that the way you currently earn redeemable miles is not changing.
Learn more about earning MQMs on Delta- and partner-marketed flights.
Medallion Qualification Dollars (MQDs) – Coming Next Year
Beginning January 1, 2014, SkyMiles members residing in the United States (excluding Guam, Puerto Rico and the U.S. Virgin Islands) will qualify for Medallion status based on an additional threshold – the member’s annual spending with Delta, which will be measured by Medallion Qualification Dollars (MQDs). Members must also meet the existing Medallion Qualification Miles (MQMs) or Medallion Qualification Segments (MQSs) qualification criteria.
The threshold ranges from $2,500-$12,500 MQDs depending on Medallion level.
Alternatively, Delta SkyMiles Credit Cardmembers can be waived from the new Medallion Qualification Dollars (MQDs) requirement if they make at least $25,000 in Eligible Purchases within the calendar year.
- Bigger elite qualifying bonuses (50% -> 100%) on paid premium class tickets, and no more qualifying bonus for ‘M’ fares, the nearly full fare coach that Delta requires in order to be able to upgrade internationally.
- Minimum spending levels on top of minimum mileage flown in order to earn elite status, which members can also meet through $25,000 in annual spending on a Delta co-branded credit card. This apparently wouldn’t start until 2014, and would only apply to U.S. residents (time to change your account address to Canada?)
United considered minimum spend requirements for elite qualification starting with the 2012 program year but ultimately rejected the idea.
And I don’t see this as an especially big deal, they haven’t chucked the mileage concept entirely.
And they aren’t even saying you have to spend $12,500 with Delta in order to achieve top tier Diamond status. They’re calling it ‘Medallion Qualifying Dollars’ which gives them room to offer ‘double Medallion Qualifying Dollar’ promotions, to offer less than 100% qualifying dollars on some partners, etc.
Really they’re replacing one ‘funny money’ concept (miles) with another (
DisneyDelta Dollars). Only the new one will be tied more closely to spend than the old one.
I like that they provide alternate means of determining profitability, that there’s minimum spend or engagement with their co-branded credit card. Ultimately that recognizes the important role that partner mileage sales has to the program, and it does it in a way which reinforces rather than undermines the existing business model of selling miles to the banks.
It may just be a temporary measure, they can always up the minimum credit card spend requirement or get rid of it entirely. But it’s a smart way to do it.
Of course, none of this is ‘official’ and it may have been pulled because this was a ‘draft’ of what they have planned rather than the final version. But it’s no longer just speculation that they’re moving towards an emphasis on revenue.
What we don’t yet know is what changes will come to redeemable mileage earning (as opposed to status) or to mileage redemption.
So definitely under the category of developing, but developing along the timeline I’ve been predicting which is that we know what’s up come June or July 2013 for the 2014 program year.