A BusinessWeek article caught my eye this morning as the topic was about Delta’s “Bare-Bones” E Fares. There has been quite a bit of chatter about E-Fares across the internet over the last few weeks as Delta is removing the ability for elite Medallion members to upgrade if they are traveling on one of these fares on February 1, 2015. According to the article,
“After a hiatus of several months, Delta is resurrecting its lowest economy class ticket as it seeks to keep bargain carrier Spirit Airlines Inc. from luring away leisure travelers. The bare-bones “e-class” ticket will not allow passengers to get seat upgrades or make same-day flight changes and they will board last.”
I had missed the fact that E fares had disappeared for a period of time….probably because I don’t routinely travel in markets where Delta offers them. While I suppose one could see the removal of upgrade availability as a real benefit reduction, I have to wonder how many Medallion flyers were actually buying E fares. I haven’t….and now I know I won’t be.
I don’t want to discuss Delta’s pricing habits, but the marketing aspects of this are interesting to me. With Spirit, I can (at least) buy up to a Big Front Seat™. I suppose Delta could argue that if a Medallion wants an upgrade, they can buy any other fare other than E class and rock on. They’d be correct. I’ll wait and see, but I’m betting the dollar-difference in fares between E fares and others isn’t nearly enough to justify losing just about every Medallion benefit there is for that specific flight. The market for most E fare sales is likely to be a passenger who could care less about Medallion benefits or miles in general. E fares and the changes in Medallion benefits for those who buy them aren’t going to cause this Medallion to think twice. What about you?
-MJ, October 20, 2014
Hat Tip – FlyerTalk
Some threads on a message board are more likely to catch my eye than others. Here’s one of the more interesting I’ve seen in a while courtesy of the Delta Air Lines forum – “Rumor: DL removing complimentary upgrades”. You can imagine the discussion that has ensued. The gist of which seems to revolve around this.
- The original poster is a troll
- The rumor is not true
- Someone is confused because Delta is removing comp upgrades for Medallions who buy E class fares
- A trial balloon is being floated by Delta
- There is less competition so Delta is coming to get us
Any of the reasons I listed could be true. This could be someone having fun on the internet….or more. In truth, I don’t know….but…. I think it is not beyond the realm of possibility that Delta could eliminate “complimentary” upgrades for elite Medallion members. Back in “the day” the airlines credited you with upgrade “certificates” for every 10,000 or so miles flown with each one being good for 500 miles worth of premium cabin travel. This is a system that American Airlines still offers its elite AAdvantage members with top tier Executive Platinum members receiving complimentary upgrades that have to be requested. It’s also the best way to manage elite upgrades in my ever so humble opinion.
I didn’t major in economics but I did pretty well in the courses I took. It’s been a minute since college so I’ll ask forgiveness if I don’t get the terminology just right. Here’s the deal. When you offer a limited amount of product for “free” you create a lot of demand with a limited supply. I know I’ve blogged about it before, but I much prefer the AA way of doing things when it comes to upgrades for elites. With a system that requires “payment” for a service, you’ll find that lower level elites have a better opportunity to upgrade because all elites focus on requesting upgrades they really want. The 50 person and longer upgrade lists at Delta have gotten a little ridiculous. It’s almost a joke among elites at the gate.
My conclusion – this might absolutely be a false rumor, but it’s also entirely possible that Delta is finally wising up to the folly (yes, I said folly) of “complimentary” upgrades for all elites, and looking at a return to the way things used to be. I really doubt that they are considering removing upgrade opportunities all together. If they are, I’d have to write a very interesting blog post.
-MJ, October 20, 2014
I posted this morning that some news might be coming today on a change to Delta’s 2016 Medallion program. The Points Guy posted yesterday about this, but nothing was official from Delta. Now we have it in writing.
Delta’s email announcement trumpets this as the “more exclusive 2016 SkyMiles Medallion Program.” Perhaps that’s true. This mirrors what TPG posted yesterday. Notably, the Amex spend waiver remains unchanged at $25K. In the end, this will impact some people. Will it change who you fly next year?
UPDATE: This change is now official.
The Points Guy scooped the world yesterday on news that Delta is raising its Medallion Qualification Dollar (MQD) requirements for 2016. According to TPG you’ll need to meet the following spend requirements in 2015 for the 2016 status year.
- Silver Medallion MQDs increasing to $3,000 (Currently $2,500)
- Gold Medallion MQDs increasing to $6,000 (Currently $5,000)
- Platinum Medallion MQDs increasing to $9,000 (Currently $7,500)
- Diamond Medallion MQDs increasing to $15,000 (Currently $12,500)
You’ll still be able to waive the MQD requirement by spending $25,000 on your SkyMiles Amex cards.
We’ll have to wait and see if this actually happens because there is no official word from Delta as I type this post. I never expected MQD requirements to be static over time, but I will say that I had not been looking for a 20 percent increase the year after first implementing the requirement. Either the initial amounts were too low or Delta thinks they can get away with this. They can. Notably, the $25,000 MQD waiver remains in place. I’d pontificated that I might blow off card spending requirements next year and just take what I can get in the elite status world. This news may or may not impact my decision on that.
I’m going to make Platinum Medallion again this year, and I’m certainly going to spend $7,500 and hit $25K on my Amex. Hitting $9K in spend on Delta airfare is not something that I’m going to be able to do consistently, some years yes…some no. My ultimate decision likely depends on how much I love my second year as a Platinum Medallion. For sure, this is one more indication that Delta sees itself as something different. Whether they should feel that way or not is a question that will only be answered in time. Maybe we’ll hear something today from Delta on the MQD change. Monitor the discussion Milepoint here, and FlyerTalk here.
MJ, October 10, 2014
A slightly eclectic and tongue in cheek look at SkyMiles’ latest enhancement – I’m not an accountant, but I work with a lot of them. They’re kind of like lawyers in that they are difficult to love until you need one, but I digress. One thing about accountants is that they love to count things. Most of the accountants I know are really good people, but sometimes struggle with “the big picture” or seeing beyond “the audit trail.” You could be forgiven for asking what my pontification on accountants has to do with Delta SkyMiles eliminating around-the-world mileage redemptions come January 1, 2015?
Well, Delta, like all airlines nowadays, is run by finance people and
bean counters accountants, and that’s not necessarily bad news…with some exceptions. They’ve been doing a little counting, and I’d bet you a dollar to a donut that the number of redemptions for RTW itineraries is in the hundreds (not even thousands) out of ever how many million SkyMiles members there are….or how many hundreds of thousands of awards are redeemed every year.
I have no idea what problem SkyMiles was trying to solve by eliminating RTW award on January 1, 2015. Apparently the cost of a SkyMiles RTW redemption compared favorably to others. It seems you’d solve that by raising the cost in miles, but I’m just a guy who writes things on the internet. My guess is that these redemptions had a real dollar cost that needed to be controlled, and the accountants saw this as an easy hit. I don’t really care, as the likelihood I’d ever book a RTW award is about the same as MrsMJ joining me on a cruise to Alaska. There’s a bit of griping online about the change, but not that much which may be telling. On the other hand, a RTW redemption could be seen as an aspirational redemption….something someone does everything they can to show some semblance of loyalty to amass the miles needed for that one award they really want. The trouble with aspiring for a redemption and a “semblance of loyalty” is that both are hard to quantify. In other words, the accountants counted the numbers and they did what comes natural. YMMV.
-MJ, October 7, 2014
Even though SkyMiles 2015 doesn’t start until January 1, Delta flyers know that dollars spent already matter when it comes to your elite status next year. Now, in addition to miles flown, dollars spent are figured into your elite Medallion status qualification for next year.
Delta flyers are also aware that if you spend at least $25,000 on your SkyMiles Amex, you get a waiver of the MQD requirement. While I haven’t hit that number on my Delta Amex yet, I will. So if the MQD waiver is there, why should anyone care about MQDs? A matter of principle. Delta makes the rules here, and the least they can do is ensure MQDs get credited when earned. I was going through my flights for the year recently and found this.
I did not receive MQDs from a fairly expensive short-haul flight on the second leg of a roundtrip flight. I wrote Delta and pointed out the missing MQDs. To Delta’s credit, I received a response the same day.
“We are aware that MQDs are not posting correctly for some tickets issued
in our system. Often these MQDs are associated with flights which
experienced some sort of delay or cancellation. Please understand, our
SkyMiles Leadership team has been working diligently with our IT team to
repair the problem. We have forwarded the ticket information for these
flights and ask that you allow 8 to 10 weeks for the requested flights
to be corrected. We regret any frustration or inconvenience this has
caused and thank you for your patience.
Thank you for your support as a Platinum Medallion member and for
trusting your business to us. Be assured, we will make every attempt to
serve you well; we are focused on the future and look forward to our
continued business relationship.”
So, Delta is aware of the problem, and they are working to fix it. That’s good. The email points out that the SkyMiles leadership team is working with IT to fix it, and they’ve identified an issue when flights experience some sort of delay or cancellation. That did not happen on this particular flight, but I did same day confirm onto a later flight than I originally booked. Could be a useful data point in watching your MQD balance.
In the end, this isn’t the biggest deal in the world, but if you are a Medallion elite that does not carry any of Delta’s Amex products (and I know there are some), it matters. Mind your MQDs, especially if there is a delay, cancellation, or other change to your original booking.
-MJ, September 5, 2014
#InsideDelta – A Look Behind the Scenes at Delta Air Lines (Part 1)
#InsideDelta – A Look Behind the Scenes at Delta Air Lines (Part 2)
#InsideDelta – Two Questions I Wish I’d Asked Delta CEO Richard Anderson (Part 3)
In my final piece on the #InsideDelta event I attended last week, I’m going to share some details of our chat with Delta’s CEO Richard Anderson. Our meeting with Richard was the last thing prior to dinner. We were slightly behind schedule, but he spent quite a bit of time with us. Frankly, he seemed to enjoy talking with us. He greeted each of us individually, then sat down to chat. We went through our day’s events, and I immediately caught on to something – he knew the names of the individuals we’d met with from the tower manager to the engine shop supervisor. What I write below is taken from my notes of the conversation. I may paraphrase a bit based on my handwriting, but these are the highlights as I recall them.
- Delta’s desire in Seattle is to build a hub.
- Seattle has a bigger local traffic base than Minneapolis, and Minneapolis has great local traffic.
On SkyMiles 2015
- Miles are no longer an effective measure.
- Bank cards pioneered what they are doing.
- SkyMiles is incredibly valuable to Delta and American Express.
- Delta’s culture is remarkable. “I hope you can feel it when you walk around here.”
- Really about making this a place where people want to be.
- He was personally involved in plans for the Delta Flight Museum.
On Operations in Atlanta
- 80 percent improvement in baggage numbers since 2007.
- Replaced bag system.
On Time Management
- I’m pretty efficient. There are only 12 emails in my inbox right now.
- Stay on top of homework.
- Never touch paper twice. (MJ notes – I may have heard angels sing after that remark. Wish more managers lived that way)
- Sometimes you have to say no to calendar events.
Advice for Our Youngest Group Member Looking for an Airline Career
- Complete your studies with a focus on finance.
- Take every internship opportunity you can get.
He was already late for an appointment, and probably stayed longer than intended, but I’m not exaggerating when I say he seemed to enjoy talking with us. That said, if I had the time back, I would have found a way to ask two more questions.
- What long-term structural business problem was Delta attempting to solve with a switch to a revenue-based SkyMiles program?
- If you had to pick the single most important aspect from legacy NWA and legacy DAL to preserve in a merged airline, what would they be?
Who knows? Maybe I’ll get an answer after the fact. What question would you have asked?
Parting Thoughts on #InsideDelta
I think Delta was pretty brave to host a bunch of aviation-enthusiasts with smart phones and Twitter accounts. On the other hand, even some of their staunchest critics would agree that Delta is running the best big U.S. airline from an operational and product perspective. This event showcased what it takes to deliver that kind of product to its customers. You know what? It takes a heck of a lot of work, and a lot of moving parts have to work together to make it happen. My thanks to Delta for letting me tag along.
-MJ, June 28, 2014
Travel Company Disclosures Updated June 28, 2014
It occurs to me that if you don’t read what I have to say regularly, you might conclude that I’m a little giddy over the idea of “revenue based” mileage programs. The truth is that I’m mostly indifferent to the idea, but happen to think that the way airlines market and price flights now make spend a better way to measure customer value than distance flown. That’s about it. My friend DeltaPoints and I were going “round and round” about this via Google Chat last night, and about halfway through the conversation it occurred to me that he thinks that I believe that no one is going to leave Delta because of SkyMiles 2015. In fact, nothing could be further from the truth. I expect that Delta has already lost some customers, and they’ll probably lose some more next year. However, when some customers walk, usually, a few more line up behind them.
I don’t know what I thought United would ultimately do, but I suppose it isn’t that surprising that they basically rolled with Delta’s idea of a revenue based MileagePlus. Honestly, I feel a little sorry for United sometimes. From this ex-airline guy’s perspective, with some pruning and hedging, they should have the finest route network in the industry, and should be the most profitable. Instead, they are what they are. In the end, they copied Delta, and now we have two of the big three with basically the same loyalty structure come next year.
The outlier in this is, of course, American AAdvantage. I’ve posted on this enough for most to know that I think AAdvantage could follow a different path towards better rewarding spend, but just because they could, does not mean they will. My sense is that US Airways had a revenue based program ready to go, and then they were presented with an opportunity in the Chapter 11 filing of American Airlines. Having bigger fish to fry, like putting together two large airlines, could prove to be a feather in American’s cap when it comes to rewarding loyalty. In other words, they have time to see what happens with Delta and United. While I think change is coming to AAdvantage, it could be different than a carbon copy of the Delta and United programs. Focusing on other things while monitoring what happens in 2015 might allow them them opportunity to do something better. Or it may prove that Delta was right all along.
But the what ifs taunt me a little. What if AAdvantage doesn’t change much at all. Perhaps a revenue requirement for elite status here, an award chart adjustment there. In a system with 85 percent load factors, meaning your most popular flights are actually close to full, is there room for that much market share shift anymore? Just pondering things on a Friday night.
-MJ, June 20, 2014
I’m frequently accused of a lot of things when it comes to Delta Air Lines. Words like apologist, misguided, and Kool Aid consumer are used. I suppose if a mileage program were the only reason I traveled, those words and perhaps a few others might be on target. A look at the top 3 reasons I fly Delta are in order.
# 1 – A reliable airline matters.
# 2 – I continue to be pleased with the level of care I receive as a SkyMiles Medallion.
# 3 – I’ve never walked off a Delta flight and said “wow, I can’t wait to fly someone else.”
There’s a bit of unrest surrounding SkyMiles 2015. For sure, it will be different and some customers will leave if they haven’t already. I’ve said this before, but it’s worth saying again. If you fly Delta, you need to have a backup frequent flier currency. Ultimate Rewards work nicely, and I enjoy a rather healthy balance of AA/US miles too. On the other hand, if a frequency program is the only reason someone is flying a particular airline, that needs a second look.
Airlines are for profit companies in the business of transporting people and cargo between points on a map. Yes, they sell miles too, and we are right to expect something in return for those miles we accrue. Will SkyMiles 2015 correct some of what has been wrong with SkyMiles? I hope so. Will it matter in the end, I don’t think so. In reality, most people pick an airline based on convenience and price, not on the quality of the frequent flier plan. Based on recent financial performance, I’d say that Delta has invested in providing a product that people are willing to pay for. As long as they keep doing that, SkyMiles 2015 will arrive and not that many people will notice. And I’ll keep drinking the Delta Kool Aid because they get me where I want to go comfortably and reliably.
-MJ, May 30, 2014
About a year ago, I wrote Santa and asked for just three things from SkyMiles. It wasn’t that I did not desire more, I just thought it best to pick three improvements that Delta could make to the program and hope for the best. For posterity’s sake lets review my wishes.
- One-way Awards
- A Working Award Calendar
- Improved Systemwide Upgrades
In late 2013, Delta actually announced improved SWUs (Regional for Platinums, Global or Regional for Diamonds). Of course, they took away complimentary upgrade eligibility on their Business Elite transcons which really hurt some fliers. In announcing the 2015 SkyMiles program, Delta committed to one-way awards and an improved award calendar. Further there is at least some evidence that their award availability has already improved a bit. Would love to hear your thoughts on that.
While I’m disappointed that we have to wait until 2015 to get one-ways and an award calendar that works, there is a tiny bit of promise in SkyMiles 2015. Admittedly, I haven’t talked about redeemable earning yet. I am one who will be slightly better off under the new rules for earning so on the whole, assuming Delta executes, SkyMiles will be a better program for me. Delta seems to have the market cornered within the airline industry on executing things well. Am I wrong to be a tiny bit hopeful about the future?
-MJ, May 19, 2014