We’ve been expected major changes to be introduced to Delta SkyMiles, and to Delta Sky Club access, with an announcement date of September 14th. The changes leaked early because Delta posted them briefly online. The internal non-disclosure agreements that kept “Project Orion” under wraps mostly worked, until they fumbled the communications ball at the five yard line. They’ve now had to release the full details.
Delta is changing how elite status is earned, eliminating the use of three metrics (dollars, qualifying miles, and segments) to focus on only a single metric (dollars) while allowing some activities other than flying to count towards those dollars. And they’re restricting credit card access to their Sky Clubs – limiting the number of cardmember visits, and not allowing visits when traveling on a basic economy fare.
Next Year’s Elite Status Will Be Dollars Only
Delta is ‘simplifying’ how elite status is earned to focus on how much you spend, and not how much you fly. For many years it’s been a combination of the two. Starting January 1, 2024 they just want to know how much you’ve given them out of your wallet. Qualifying miles and qualifying segments will no longer be part of the equation. And there’s no more ‘spend waiver’ for earning status.
Members with rollover qualifying miles will have a choice next year to transfer those to qualifying dollars, redeemable miles, or a portion of each.
Qualifying dollars will also be able to be earned via spend on co-brand American Express cards, rental car and hotel bookings through their portal, and with Delta Vacations.
- Flying earns a qualifying dollar per dollar spent, while partner airline travel (that isn’t a Delta codeshare) earns qualifying dollars at the same rate as today.
- Credit cards earn based on the product, with Reserve earning 1 qualifying dollar per $10 spent; Platinum earning 1 qualifying dollar per $20 spent; and lower category cards not earning qualifying dollars.
- Car rentals and hotels: one qualifying dollar per dollar spent through Delta channels.
- Delta Vacations: earns a qualifying dollar per dollar spent in addition to what you earn for the flight component of the package.
Here are the new status tiers, earn in 2024 for 2025 benefits:
- Silver: $6,000
- Gold: $12,000
- Platinum: $18,000
- Diamond: $35,000
It seems almost impossible for many people to earn status in this program without leaning heavily into a premium American Express card. However spending even $250,000 on a Reserve card, which used to ‘waive’ the qualifying dollars component of Diamond status, will only net $25,000 qualifying dollars – or just over 70% of the way to Diamond. Indeed, spending $25,000 on an Amex card will only earn $1,250 or $2,500 qualifying dollars – not a lot!
Earlier this year hotel and rental car bookings made through the Delta portal counted towards status. That must have been a test or dry run. And it’s edges them closer to American AAdvantage, where most partner activity counts.
These changes clearly put Delta in the role of follower, of United with spend-based status and American, recognizing that it isn’t just flying that matters to the business’s bottom line.
Overall this makes Delta status that matters unattainable for many. They are expecting high ticket spend business travelers, putting a lot of reimbursable spend on premium Delta co-brands, precisely as we’re seeing managed business travel stagnate.
New Delta Sky Club Entry Restrictions
I wrote recently that Delta would be introducing new entry restriction for its Sky Clubs, this time targeting access via credit card.
In the face of overcrowding of Delta’s Sky Club lounges, last year the airline limited lounge access to within 3 hours of departure. Then they made several more changes.
- raised the price of club memberships, and restricted purchase of memberships to SkyMiles elite members
- eliminated access to clubs by members traveling on basic economy fares.
- eliminated access for mid-tier elites and above flying internationally in coach
- took away access from employees with purchased memberships or premium credit cards (which they pitched to employees for lounge access just the year before, not to mention asking employees to volunteer cleaning the clubs).
These measures weren’t enough and clubs are still crowded. Delta lounges are modestly better than United Clubs and American Airlines Admirals Clubs, especially their food offerings. And more people gain access via credit card to Delta lounges, since it’s not just their own cardmembers getting access, but also American Express Platinum and Centurion cardholders flying Delta.
As expected,
- Starting February 1, 2025, Delta reserve cards will no longer receive unlimited Sky Club access unless the cardholder spends $75,000 per calendar year on the card (in which case they receive unlimited visits for the rest of that year and the full next year). Instead the Reserve card will come with 10 visits per elite member year. (2025 unlimited access will be based on 2024 card spend.)
- Starting January 1, 2024, credit card access will no longer be permitted when traveling on basic economy fares. (Paid memberships are already no longer valid on these fares.)
- Starting January 1, 2024, the Delta Platinum Amex cards will no longer allow paid day access.
Changes to the American Express Platinum cards will align, and starting February 1, 2025, those cards will offer only 6 club visits per year unless the cardmember spends at least $75,000 per calendar year on their card.
This should both (1) provide some crowding relief in the lounges, and (2) incentivize card spend, both of which benefit Delta. At the same time, the value of holding the cards for very frequent Delta flyers falls somewhat which isn’t what they’re after. And to be clear, this is a benefit reduction to cardmembers.
The basic economy restriction especially stings, since Delta even publishes their cheapest award travel with basic economy restrictions. Members who save enough miles to ‘fly free’ will be treated as second class citizens when they do, which is the opposite of a ‘loyalty program’ meant to make customers feel valued.
No Changes To Earning And Redeeming Miles
The changes being announced are specifically regarding how elite status is earned, and how Sky Clubs can be accessed, and do not entail changes to how miles are earned or redeemed for awards. Delta has already made plenty of those changes, devaluing their points currency significantly. I see no reason to focus on SkyMiles over other currencies. The only reason to engage the SkyMiles program over other programs is if you fly Delta regularly and use it to earn higher levels of status
@ Gary — After sleeping on these changes last night, I’ve realized that Delta’s big miscalculation in all of this is that customers would rather all be told they are Diamond (i.e., important) and be #40 on the non-upgrade list and wait in line to access the SkyClub than be told their financial contribution isn’t good enough for Delta. Insulted customers = former customers. United will likely make the same mistake, but I am betting that AA doesn’t change much for next year’s qualification after seeing all of the vitriol spewed at DL and UA.
DAL just released its investor guidance and affirms its margin guidance for the rest of the year and for the 3rd quarter.
The impact of higher fuel on DAL’s margins will be less than for other carriers, showing the refinery is delivering benefits, while its revenue production is as good as or better than other carriers.
DAL is making these changes from a position of strength and simply will not see the impact that many think
Gene.
AA execs repeatedly talk about their network being their product and yet you somehow think that doesn’t apply to DL.
It does and DL is gaining business because of strategic missteps and DL’s growth in key corporate travel rich markets.
Some people will lose elite status on DL but there are more people coming in the door at DL that can replace and exceed the elite status production than will leave.
That is simply reality and the financial data will continue to show it.
@Patti:
“Anyone want to recommend a decent cash back card?”
Sure, the Bank of America Premium Rewards card.
Earns 2 points on travel and 1.5 points on everything else. Enroll in BofA’s Preferred Rewards program and earn a bonus on credit card spend ranging from 25% to 75%. For the Platinum Honors tier, which requires at least $100K in eligible accounts with BofA or Merrill Lynch, a $1 spend on travel is worth 3.5 (%) points and a $1 spend on everything else is worth 2.625 (%) points.
At BofA things like an IRA account counts toward the Preferred Rewards tier minimum balances, which is not the case at other banks of which I’m aware such as JP Morgan Chase that offer a similar product, so it’s not hard to reach the Platinum Honors tier; the lower tiers such as Gold and Platinum have bonus amounts of 25% and 50% respectively with lower minimum balances.
An IRA or other retirement or brokerage account can be moved to MerrillEdge “in kind”, i.e., without exiting one’s investment positions which means one doesn’t have to realize a loss (or gain) and deal with the resulting tax issues in order to take advantage of Preferred Rewards.
Even though the Premium Rewards card is billed as a travel rewards card, points earned can be redeemed as a statement credit against ANY charges made on the card – they do not have to be travel charges nor does BofA force the credit to only be applied against specific charges as do some other banks.
And because it’s a travel card, the card has some excellent travel protections, especially for a low-tier travel card, so it’s good for casual travelers who want cash back but also can use basic travel protections from time-to-time.
@Gene — Agreed. I can easily see those pax who “primarily fly Delta” moving away from DL and onto other carriers IF they are not on the verge of achieving some lifetime level of status.
Now let me quickly add that I rarely fly DL as a) I didn’t grow up in the South, and b) they aren’t as convenient nor are they price competitive compared to the other “majors” (most of the time). In the last 20 years, I’ve flown Delta exactly 9 times. But they certainly aren’t making me *want* to switch carriers and start flying more on DL either…
@ Tim Dunn — Where are all these supposed replacement customers coming from? From AA and UA? Fat chance. It is a zero-sum game and DL cannot gain customers out of thin air. Delta’s forward guidance is coming from the same idiots who made these changes. Of course they are going to say that things are only looking up. That was the easiest prediction in history.
I would rather fly Spirit BFS with Gold status+Saver$ Club for 60% less money for the same thing as DL First Class, except the seat recline (and free booze and seat back TV, both of which I never use). On the route I have flown DL and NK the most, I actually get MORE service from NK. DL always tells their FAs to be seated for their safety, so there is usually ZERO FC service on Delta. Why bother flying Delta? For some more kicks in the teeth and $550 annual credit card annual fees? The BofA Spirit card annual fee is $0 year in year one and then $79. I can take the $942 saved on credit card annual fees every 2 years and effectively cover the $1,000 opportunity cost of earning Spirit Gold status by charging $50,00 on my Spirit BofA card on Jan 1 every other year.
Also slept on this overnight…since the SC changes kick in for 2025 and the MQM’s earned this year still apply to 2024’s travel year. I will keep the Reserve Card for one more year…use all…and I DO mean ALL of my remaining Sky Miles for travel in 2024 and then happily say bye-bye to Delta.
I have not ben on another airline since 2012…but that will change in 2025!
@ Gary — Correction to “Flying earns a qualifying dollar per dollar spent, while partner airline travel (that isn’t a Delta codeshare) earns qualifying dollars at the same rate as today.” This was devalued today as well. MQDs for AM/AF/KL’s most common business class fares (CDIZ) were lowered from 40% to 30% of distance. Full fare J remains at 40% and deep discounted O remains at 20%. I’ve booked lots of these over the years, and never been ticketed in J or O, so I view this generally as a cut from 40% to 30%. This till remains the best workaround left. You can fly 116,667 miles in paid business on these three airlines for about $10,000, which isnt that much more than the opportunity cost (abot $7,550 incuding the annual fee) of charging $350,000 on a Reserve card.
This policy is clearly chasing money and not loyalty. I’ve had medallion status for years going between diamond, platinum, and gold depending on my job. My status was solely on my travel on Delta. None was from a credit card. It is frustrating that I will be penalized over a cardholder that takes 1 vacation flight a year for upgrades and other benefits.
@TravelWarr – ditto for me too. I’m gonna take next year to see which airline offers the best bang for the buck and go from there. If I end up with AA I’d fly through CLT and DWF a lot so I may keep my Amex Plat card. I wonder if the Plat annual fee will go down in 2025 since the value of having the card decreases if you fly Delta? I’d use the booking for car rentals and hotels if the program enabled double bookings – ie, credit for both Delta spend and hotel and car rental points and status.
@Gene – I should have said “in the same manner as today”
@ Berk —> “I wonder if the Plat annual fee will go down in 2025 …”
Surely you jest!
@gary should look into project Orion and whether they were diversity hires. From what I’ve heard Delta is more focused on politics and meeting diversity goals rather than running an air line. The huge loss of medallions paying a premium to keep status doesn’t seem like a smart business decision