If & When Delta Amex MQD waiver changes – “Thinning the herd” may not be great for remaining Diamond Medallions as they think it will be!

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Notice they did not say: NO WE ARE NOT CHANGING THIS!

Gary, from A View From The Wing, got as much of a corporate answer from Delta as we will get until the news comes out about the changes to the Delta Amex MQD waver that my sources tell me are currently planned to roll out over the next few months. That is, Delta did NOT deny that changes are on the way. That is what they have traditionally done in the past when information has been either inaccurate or confused – but not in this case. The same type response was given to a reader who complained directly to the Delta VPs and was given a non-deny it will happen (sooner or later).

But I wanted to consider all the “what if’s” when this does happen and what impact it will likely have on the situation onboard.

First off, for all those who have “puffed out their chests” and smiled (since they have $15,000 in MQD spend each year) you may not be as happy as you think. Keep in mind Delta wants 20×2020 – that is, only 20% of 1st class seats to remain for upgrades by the year 2020. We also know they will be pushing for more and more 1st class upsells as they “…remain in the early stages of marking the value of segmentation“. So consider this:

Say someone in 2019 becomes an “X-DM” now a Platinum due to the AMEX Diamond waiver changes. In the past you likely would risk it and hope for a “free” upgrade and say “ah well” when you end up stuck back in coach. Now that you are PM you will be much more likely to consider the paid upgrade option if the price is right. So, sorry high value BIS mega spending DM, you did not get your upgrade as it was purchased by a former Diamond who would have been back in coach last year (doh – did not think of that)!

Current Choice Benefits on Delta.com

Or here is another one. In the past, as a Diamond, the flyer may have maybe picked 20,000 SkyMiles as the Platinum Choice Benefit (yes, Diamonds get BOTH a Platinum and Diamond choice). But now, as “just” a PM flyer, they will always pick the RU certs or regional upgrade certs as their PM choice. Then, and you guessed it, by applying the RU cert they will clear the upgrade before the BIS “thin the herd” DM will and again the DM will miss the UG that they would have likely got the year before (ooopsseee).

Yet another one we have, and this is being publicly stated by all the top brass at Delta, that they want everyone to burn their miles for anything with Delta just like cash. This too could drive more and more X-DMs to burn miles for upgrades and the result yet again for the remaining HVC DMs is less and less upgrades than the year before (darn you Delta).

I hope you clearly see “thinning the herd” sounds great when thought about in isolation, but in reality maybe not so fast. The real results, if and when Delta makes this change, may be more income for $DAL but it may mean even more upset what some are calling “true Diamonds” who get even less of what they expected to see more of due to the rosy PR from Delta about this change.

What do you think? Do you think that the change to not allow Delta Amex MQD waiver to Diamond Medallion will mean more or less upgrades for the remaining HVC DMs? – René

 

Will removing the Delta / Amex MQD waiver to DM result in more DM upgrades?

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11 comments

  1. I don’t think Diamonds will see many more upgrades. I saw more upgrades as a Gold seven years ago than I do as a diamond thanks to FCM.

    I have over 2 million miles right now with Delta and if it’s a route that I want to sit up front on I’ll just do PWM for the difference and will be chosing RU’s as my PM gift if that happens where in the past I chose the miles.

    The two things I’ll miss the most are the co-terminal benefit (which was getting harder to use anyway thanks to the SDC changes) and the GU’s on international. I’ll just burn miles for an international upgrade or use my chase points with one of their international partners for a true business class experience. With the premium economy cabins coming to Delta soon those GU’s won’t be as valuable anyway and not to mention the fact they are going to put people in international premium economy connecting domestically in first class that will mean fewer seats for upgrades for hub captives like myself

  2. I think what you’re saying is possible, but I’m not entirely convinced (yet).

    I don’t think thinning of the DM herd is going to to reduce the upgrades for DM much (if any). The ex-DM who is now PM should already have the 4 RUC so there shouldnt be much change in availability and usage for them since they’re already being used. Ultimately, with less DMs, those existing DMs should have a higher probability of upgrades of the remaining available upgrades which Delta has already made a point of monetizing. The monetiziation of those first class seats is about reducing the quantity of available upgrades which wouldnt be changed by having more or less DMs. If anything, it’s about making a smaller pie available to a smaller population of DMs.

    The catch 22 is that most of those DM probably need to fly first class in order to spend to keep their status. So they probably wouldnt be needing an upgrade anyway.

    Ultimately, with AA now rewarding big spenders by prioritizing upgrades by status and EQD, Delta will want to do the same with this next round of Amex changes. It’s probably the best way to reward their big spenders and incentivize others to devote more of their business to Delta.

  3. @Danny – You are missing one big point that is my guess is a great number of DMs now do not pick RUs as their CB. But once the PM ranks explode as DM fall down the number of RUs in circulation will expand exponentially. Thus DMs who thought they would be #1 will often find they are behind a PM who once was a DM who would have been below them.

  4. Interesting. I always assumed most PM and DM folks chose the RUs as their benefit. What do you think most of them choose as their CB?

    I’m doing a status match from AA soon so I’ll be flying Delta in a few months. I’m curious to see how this all plays out, but I’m not expecting much difference between AA and Delta for the future.

  5. @Rene, I get your point, but if I were to remain a medallion and only reach PM my choice benefit will always be the 20,000 skymiles, no matter how little they are worth. As I always buy first class, I have no need for the RU’s. And I only buy FC because I have been caught in too many situations where being in the back of the bus has caused more stress in so many different ways that paying for FC is worth it to me. As well as the 99.9% certainty that I will fly in that cabin.
    Your examples are good ones though. But we are all assuming this in isolation. Meaning this information about a possible waiver takeaway is all by it’s lonesome. I bet there is something else that goes with it that will create a whole new set of scenarios for all of us to consider. Right now, I get to imagine what I will do will all my new Chase Ultimate Reward points. That purchase me 1.5 x worth of travel than AMEX points do or give me 3x Skymiles more than Amex Reserve does.

  6. Hopefully the competition will do what hotels did when Hilton had a major deval about 8 years ago and have aggressive status matches for Delta Diamonds.

    What I don’t understand is if they want to “thin the herds” then why are they giving status matches and why are the exempting out of US residents from the MQD requirement.

    If this does occur I live only 20 minutes from the Canada border and am seriously thinking of opening up a PO Box at a Canada post office or seeing if a colleague in Canada will allow me to use their address for mailing purposes for delta.

    Really interesting thing is I sent letters to the people on Am Ex in Rene’s link (both snail and email) and did an online chat with Am Ex and Am Ex was clueless as to the change. Someone one flyer talk stated they received a phone call from their Email to Am Ex from an Exec’s secretary that was also clueless

  7. I reach DM status with about $12K in annual spend and the waiver.

    Sure, United does not have a waiver for Premier 1K, but I can use that $12K annual spend that I now give to Delta to get Premier 1K on United. Getting six Global Premier Upgrades would also be nice. I really prefer Delta, but this change that Delta is considering would make it hard to not switch.

    For the “thin the herd crowd,” yes, if I switch United there would be more upgrades for the rest of you.

  8. Please excuse my ignorance, but how does moving things to Canada help?

    Yes, we don’t have MQD requirements but to qualify for Diamond, we still have to spend enough to fly 125000 MQMs with no credit cards incentives or other ways to supplement.

    My 2017 Delta.com spend (minus taxes) currently sits at around 9.5K and I fly solely international economy, for leisure and have a career.

    This was the first year I reached Diamond and my back and legs can attest, it was a bit of a slog getting there.

    On track to reach it again for 2019 but personally not sustainable for more than another year when all my ambitious travel plans end and I’ll be aiming to stay at platinum.

  9. In all of these discussions, no one has mentioned that the real perq that has been devalued is rollover miles. Currently, anyone who had a major spurt of activity (say, had to fly internationally in J twice a month for a year) racked up a boatload of MQMs. They could feasibly make Diamond for two or three years when they went back to “normal” levels of travel just on the rollover miles – as long as they met the MQD requirement with their AMEX.

    As one who has made Diamond only once (and Platinum for 20 years), I don’t think Diamond is that big of a deal. Complimentary upgrades (at least on the routes you want) were impossible and I just used PWM to guarantee a F seat (you also got the class-of-service bonus). The only real benefit I found was in IROP support, but that was a rare need.

    I’m sure that DL has done the math in what “thinning the heard” will cost them. I bet SkyClubs will still stay overcrowded and upgrades will still be impossible to get.

  10. @Evan – See linked original post. We will not know until September (soonest) or October (more likely).

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