What’s Behind Higher Spending Requirements for Elite Status and Special Treats Coming to Centurion Lounges

News and notes from around the interweb:

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 InsideFlyer.com, 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. @ Gary — The increased requirements will eventually have me just buying the cheapest domestic F/J and not caring which airline. DL still has enough loopholes to work for me, so I will continue reaching DM for now.

  2. The elite article is interesting and makes complete sense. They spend very little time talking about Delta perhaps because it doesn’t fit their theory as well.

    Moving an MQD requirement $3k definitely aligns with that thesis. Taking a credit card waiver from $25k for top tier to $250k… that feels a little like an outlier, no? Maybe it forces me to spend more money directly with Delta? Or maybe I go from having two Delta cards to 3; or focus my spend on the credit card if my spending can even stretch that far – my guess for most people, without true manufactured spend, this is fairly unlikely given average incomes (unless washing reimbursable expenses or business expenses thru the cards).

    But this doesn’t really sound like a layup with regards to this thesis. I’m curious what you think Gary? For delta at least, this does feel like a thinning of the diamond herd to discriminate credit card achievers from butt in seat achievers; with some marginal byproduct of getting some elites to spend more.

  3. The elite article was interesting. However, gaming the flyer’s pocketbook seems two clever by far. I think if you were to do a simulation (like the old game RollerCoaster Tycoon), you would have to have the airline gaming the elites, which simultaneously, the elites gaming the airlines.

  4. Darn, “too clever” not “two clever”. My song, Dumb Dee Dumb Dumb. Need to put on my glasses before typing my comments.

  5. Problem with United’s 1K status requirement changes is that now we get only 150% qualifying miles for the actual miles flown instead of 200% MQM towards 1K status. That’s a problem for us as we end up being short 23,300 miles for the 100,000 miles requirement on the route we have been flying for the past 15 years. Not happy about this change and trying to figure a way around it. Any suggestions?

  6. @Justin B

    The reason DL isn’t primarily featured in the article – is because it was UA and AA that recently made the changes to $15k and has been garnering recent press.

    However – your thinking is right on. The DL move from $25k credit card spend to $250k to achieve a Diamond Waiver wasn’t ‘really’ about getting people to spend incrementally on the card. They could have just as easily removed the opportunity for a spend waiver for Diamond.

    Delta’s strategy was two-fold:

    1/ Getting ‘marginal’ Diamonds to spend up on core airfare spend. The reality is that to earn 125,000 MQMs, you are probably pretty close to the spend requirement anyway – or at least “within reach” to stretch. It’s this stretch that they are after (same as United/American).

    2/ Delta are on the record as saying that they are happy to recognize high-spending cardholders in the same way as high-flying pax. So that likely explains why they didn’t just completely remove the opportunity for credit card MQD waiver.

    The only area I would take an alternative view to yours – is that even with Delta, I would suggest the primary goal is incremental spend, and that marginal thinning of the herd is a by-product, but not the strategic goal.

  7. The elite status changes are interesting, indeed. It’s definitely about reshaping the heard. If you were getting elite status from longhaul flying, the whole shift to revenue-based has been about thinning the ranks. The airline isn’t interested in giving you elite perks if you qualify by flying transpac business class. Consequently, AA and UA are falling all over themselves to “invest heavily” in the longhaul, premium cabin experience since the loyalty program is no longer able to generate loyalty. The shorthaul experience is awful for everyone, so this is where elite benefits can really impact spend. Let’s face it, if you were qualifying for exp on shorthaul flying you almost certainly meet the new spending requirements.

  8. I listened to the podcast about the new TWA hotel.
    It is a really cool podcast, I encourage everyone to take a listen.

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