Does adding more ways to earn elite status make for a “simplified” program? Delta Air Lines and its SkyMiles members are about to find out. The carrier announced significant changes for its loyalty program this week, touching on the incredibly lucrative co-brand partnerships, and possibly skewing the loyalty landscape a bit beyond that.
In many ways Delta’s adjustments follow the template laid out by American Airlines and its Loyalty Points conversion. Spend now dominates the relationship more than ever, which is of little surprise. But the company will also remove a key lounge access benefit from one of its co-brand American Express cards, putting that multi-billion dollar relationship to the test.
SkyMiles Medallion qualification changes for 2025
Ultimately, money talks with the new SkyMiles Medallion qualification rules. Medallion Qualifying Dollars (MQDs) are the only metric considered, and the number required is going up.
Moreover, the ability to skip the MQD minimums with Delta by spending more on a co-branded American Express card are shifting massively. Previously a $25,000 annual spend level was sufficient for Silver, Gold, or Platinum Medallion tiers. Now the program shifts to AmEx spend counting at $10 or $20 to 1 MQD, depending on which card is used. In the examples it shares Delta believes that the consumer spending $3,000 per month on a SkyMiles Credit Card (plus 8 r/t tickets priced at $500 and three hotel stays at $650 each) now probably belongs at the Silver Medallion level. Previously that level of credit card activity would qualify for the MQD exemption, allowing a passenger to qualify for Platinum Medallion, assuming 75,000 miles of flying through the year as well.
Loyalty on the “Travel Ribbon”
Delta will add MQD credit for hotels and rental cars booked through its portal, powered by Expedia. And the company plays up how much easier it will be to earn status with all that “other” travel spend now counting. After all, a couple hundred dollars per night here and there on hotel stays adds up in a hurry. And airlines have been talking for at least five years about capturing more of the “travel ribbon” beyond the flights. But after trying partnerships in various ways for many years this iteration appears more of a stick than a carrot.
Booking through a third party portal means foregoing (most of) the loyalty benefits that hotel and rental car programs offer. Will the business traveler who also now qualifies for hotel elite status be willing to give that up, shifting their booking to Delta/Expedia rather than a direct relationship with the hotel, often at a slightly discounted rate for loyalty program members?
Put another way, will consumers shift their loyalty to focus primarily on the airline, and pay more for that privilege?
SkyClub Access: Now with Elite Status, too
Tying elite status to spend can easily be construed as the continuation of a longstanding trend in the airline industry. Extending that to the SkyClub benefits of cobranded credit cards, however, is a very different sort of play.
Starting in 2025 the Delta Platinum AmEx cards (currently ~$250 annual fee) will no longer have any access to SkyClubs as a membership perk. And for Delta Reserve (~$550/year) cardholders access will be capped to 10 visits per year. To remove that cap a member must spend $75,000 on the card in a year. The non-Delta branded AmEx Platinum cards will also see visits capped at six per year, also with the option to uncap access via spending on the card.
Passengers on basic economy tickets will lose SkyClub access via the American Express card partnership as of 1 January 2024.
These changes will undoubtedly impact the co-brand portfolio. Some travelers are likely to cancel or downgrade their Delta Platinum AmEx cards now that lounge access in no longer included. Others may upgrade to the Reserve card. Still others may shift more spend to the Reserve card to make sure they can still access the lounges.
The Delta/AmEx partnership generated $5.5 billion for the airline in 2022. That’s a massive money train to put at risk. It seems the pair have agreed paring down access to premium services and actually delivering the benefits more consistently to a smaller set of consumers will ultimately deliver better returns. Or at least that they have to give that a try.
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