Delta SkyMiles Program Changes: A Survival Guide

Delta has announced a major overhaul of its SkyMiles program that will go into effect Jan. 1, 2015.

In short, you’ll earn miles per dollar spent rather than per mile flown. That makes Delta the first legacy carrier to adopt this rewards model (it was pioneered by Southwest, Virgin America and Jet Blue).

June 2014 update: United announced that it would follow Delta’s example and switch its miles-earning structure to one based on spending (rather than miles flown) in 2015. American, for the time being, still doles out rewards based on miles flown. Delta plane

Here’s what you need to know about the changes – and whether having one of Delta’s AmEx SkyMiles cards could help you under the new system.

What’s changing?

In the past, Delta rewarded fliers based on the number of miles flown. For example, flying from Dallas to Chicago would give you more miles than flying from Chicago to St. Louis, because the former is a longer route. For travel beginning Jan. 1, 2015, however, the following points-earning structure will go into effect:

2015 Delta SkyMiles Program Earnings
SkyMiles statusMiles earned per dollar spent on fare
General5
Silver Medallion7
Gold Medallion8
Platinum Medallion9
Diamond Medallion11

SkyMiles are tied to the number of dollars you spend and to your status. To get more miles, you either must buy a more expensive ticket or increase your status with the airline.

Along with these changes, Delta will be expanding its miles + cash options for rewards booking, allowing customers who don’t have quite enough miles for a reward ticket to pay with a combination of cash and miles. This type of perk, which is virtually non-existant in the frequent flier realm, is more common in the hotel rewards realm (the Starwood Preferred Guest card and IHG Rewards Club card both have cash + points options). Delta currently allows only SkyMiles credit card holders to use miles to get discounts off ticket prices.

It also will be expanding its reward options for one-way travel, reducing the number of miles needed for a one-way ticket to half the number needed for a round trip.

What’s not changing?

The number of SkyMiles you can earn with your Delta SkyMiles card from American Express (a CreditCardForum advertising partner) will not change. You’ll still earn 2 miles per dollar spent with Delta. So, if you’re a general SkyMiles member and pay using a Delta SkyMiles AmEx, you’ll earn a total of 7 points per dollar spent with Delta (5 points per dollar spent on fare, plus the 2 miles you get for paying with your credit card).

Who will win – and lose?

Two groups will win under this new system: Those who pay more (likely business travelers) and those who have status with the airline.

One group will likely find the changes to be less than rewarding: Budget travelers.

Here’s why: Say you’re flying from Chicago to Orlando. If you’re a budget traveler, you might track ticket prices and then pounce when they drop low enough. Perhaps you’ll even adjust your ideal travel dates to bring the price down. Under the current system, you’ll still get the same number of miles you would have gotten if you’d booked a more expensive fare. That’s because, while prices might fluctuate, the distance from Chicago to Orlando will not change.

However, under the new system, cheaper seats mean fewer miles.  Although you’ll pay less out of pocket, your rewards earnings will take a hit. Meanwhile, a person who buys a more expensive ticket or who has Medallion status would be rewarded.

Let’s look at this visually …

1. Say you’re a budget traveler …

The itinerary you want originally costs $400, but you snag a $250 ticket ticket by waiting a couple more weeks and booking an early-morning flight.

According to Delta’s comparison calculator, you will earn 760 fewer miles on the trip.

$250 Delta flight

2. Say you can afford to spend a bit more …

You’re a business traveler and need to book last-minute flight (as business travelers often do). Since the company is paying, it’s no problem that the ticket price is $500. Plus, you’ll bank 490 extra miles:

$500 delta flight

3. Let’s say you have status with Delta…

If you’ve got Diamond Medallion status, the highest tier, you’ll really start raking in the points. In the first scenario (the $250 flight), you’ll earn 2,750 points under the new system. In the second (the $500 flight), you’ll earn 5,500 points (more than twice what you’d earn without any status!).

The bottom line: Budget travelers who don’t fly frequently enough to have Medallion status may lose under the new system.

There’s a catch when it comes to Medallion status …

While status will get you a ton of extra points under the new system, higher Medallion-level status will actually be worth slightly LESS than it was under the old system.

Wait … what?

Let’s break it down: Even under the current system, Medallion fliers get mileage bonuses for flights:

Delta medallion bonus

Based on the new system’s earnings rates (see the chart above), here’s what’s going to happen in 2015:

Medallion status% bonus earned under old system (compared to those with no status)% bonus earned under new system (compared to those with no status)
Diamond125%120%
Platinum100%80%
Gold100%60%
Silver25%40%

In other words, the upper-echelon Medallion members who are used to earning significantly more than the average bear will find that gap closing slightly next year. Gold Medallion Members will see the biggest drop in the worth of their status. Silver members, meanwhile, will find their status worth slightly more next year.

What it means for cardholders

If you want to stick with Delta through the changes, having one of the Delta SkyMiles cards offered by American Express could help you maximize your rewards under the new rules. For one thing, getting extra miles just by paying with a credit card is an easy way to minimize some of the losses for budget travelers. The Gold Delta SkyMiles, for example, can get you just as many points per flight as a Silver Medallion member without a card would get.

Plus, under the new system (as with the old one), climbing up the Medallion ladder and not falling off is the name of the game, considering that a higher status is basically a way to farm miles. Look at it this way: Come 2015, you’ll get just as many points buying a $250 ticket with Gold status as you would buying a $400 with no status.

To achieve and keep Medallion status, you need Medallion Qualifying Miles (MQMs), and two of AmEx’s card offerings get you extra MQMs:

  • The Platinum Delta SkyMiles card gives you 5,000 MQMs after you spend $1,000 in the first three months of cardmembership, 10,000 MQMs if you spend $25,000 in a calendar year on the card and 10,000 more MQMs if you spend $50,000. If you manage all that and pay a $195 annual fee, you’re automatically Silver.
  • The Delta Reserve card gives you 10,000 MQMs after your first purchase on the card, 15,000 MQMs if you spend $30,000 in a calendar year on the card and another 15,000 MQMs if you spend $60,000. If you manage all that and pay a $450 fee, and you’ll be well on your way to Gold.

And let’s not forget the Medallion spending minimums that Delta put in place in January 2014 (which range from $2,500 per year for Silver and $12,500 for Platinum).  All of the Delta SkyMiles cards allow you to waive that spending threshold IF you spend $25,000 on the card in a calendar year.  If you’re playing the Medallion game, you’re probably doing that anyway.

Let’s face it: Even with the help of these credit cards, getting and maintaining Medallion status isn’t easy. In fact, it’s a game only for big spenders.  If that’s you, though, a SkyMiles credit card can make sure you profit from the new system.

Tell us in the comments: What do you think of the upcoming changes to the Delta SkyMiles program? Will they benefit you? Or will they kill your last shred of Delta loyalty?

Updated June 17, 2014

 
Comments
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Traveling from Florida to Hawaii to see my son, I will definitely lose big time on the miles earned side and will not benefit on the redemption side. But, that’s the American way – screw the little guy and help the 1%.