Are unlimited Medallion upgrades about to vanish too? Let’s look at the upgrade test program!

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Yesterday ThePointsGuy (TPG) Brian Kelly had a post about a new Delta Air Lines test program you can read more about HERE. I also reached out to Delta CORP about this program and was told:

“We are testing an Upgrade with Miles option to offer customers the ability to redeem miles for upgrades in select markets on Delta.com. All of the SkyMiles accrual rules apply as currently described on Delta.com.” – Delta CORP

Now that sounds very fishy to me since, as we all know, the use of any Skymiles to pay for a ticket will VOID your chance to earn any Skymiles or MQM’s. And, if we look at the internet “way back machine” we will see this was the wording on Delta.com very clearly.

But, notice a massive change in the wording about spending miles to buy a  first or business class  ticket now with “Pay with Miles” that I first posted about yesterday on FlyerTalk!

“Pay with Miles tickets booked in First or Business Class are eligible for mileage accrual, Medallion Qualification Segments, and Medallion Qualification Miles.” – Delta.com

This alone is shocking and major news. We now must all run the numbers to see if it is worth spending Skymiles to book an award ticket, OR, to use them to pay for a ticket with Pay With Miles, thanks to our Delta AMEX card that you need to have to do this in the first place, and then be able to EARN Skymiles and MQM’s for a trip we paid for WITH Skymiles. It makes the head spin!

Now back to the test upgrade program. With this, a flyer can earn HUGE class of service bonus Skymiles and MQM’s. Notice what TPG said yesterday in his post:

“I wanted to test out some the routes where this was offered, so I randomly checked Atlanta-Cincinnati on April 12. The lowest coach fare was $262 for this one-way flight, and Delta was offering upgrades for either $59 or 5,900 miles. This route can be rough for complimentary Medallion upgrades, but for 5,900 miles I could confirm the upgrade at booking.” – from TPG

Well DUH! And think about this. Say your employer is willing to reimburse you for ONLY a coach class ticket; ANY coach class ticket as long as it is coach. You can sometimes find a full “Y” class ticket for almost the same price as first class. But, your employer will ONLY let you buy coach. No problem, you burn a few Skymiles, ride up front, and earn a bunch more Skymiles and MQM’s on top of that. Easy peasy!

Oh, but one thing, you can do this as a general Skymiles member and you have just taken a “free” upgrade away from a medallion member. Think how many times this will happen each and every day. Now, think about the heavy medallion routes. Can you see a situation where when you are NOT buying an upgrade with Skymiles just about squashes any possible chance for an upgrade?

Notice what else TPG had to say:

“The bottom line is that Delta is trying to sell more upgrades, whether with miles or money, instead of upgrading elites. Over time I expect Medallion upgrade percentages to drop as less seats become available for last minute complimentary upgrades. United has also been aggressively marketing upgrades and I know many elites have been disenfranchised by the process, but I’m curious how much business Delta and United have lost as a result. I’d bet less than the amount of revenue they are bringing in- that’s what I suspect the hacking of elite upgrades will continue as airlines seek to squeeze as much revenue from paid upgrades. Great news for shareholders- frequent flyers? Not so much.” – from TPG

I agree with most of this. I am about as PRO Delta as any blogger in the blogosphere but as of late, it is getting very hard. The MQD move, while unpopular, will, I feel, have the positive affect of opening up some 1st class seats as so many either jump ship and go over to AA or UA or drop down from DM to PM or lower and on down the chain. This, will have the exact opposite effect if it comes into play fleet wide as it is being tested now.

On top of all of this, with many more seats being sold and upgraded with points, just how many less business class seats will this make available for Skymiles redemption at low, medium or high level? I just don’t see this policy resulting in an increase of award seats being opened up by Delta.

This one is a hard one. There will be fliers who are just over the top in love with this one and it will have an impact for Delta as I think many will be happy to burn Skymiles for this perk. But for others, the chance for an upgrade will be even lower than it is now. So what do you think. Do you like this idea? Is it one more potential “enhancement” you love or hate? Comment below please! – René
 

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26 comments

  1. Hi Rene, well, to be honest I still have to figure it out. Yes, I do like the fact that you will earn miles (and MQM’s) on pay with miles tickets. That is nice. However I’m afraid that because of all these seats going out to paying customers, there will be no low/medium priced award tickets left. It sounds nice that you can earn MQM’s on pay with miles tickets, but in the end it is how much you will have to pay for them to see if this will be an improvement or not….I’m not optimistic.

    I personally don’t care about domestic upgrades, but definitely not good for free upgrades for Medallions. In the end it erodes the whole point of being a Medallion, so why keep earning miles…?

  2. If you think about it, it’s another step towards a revenue-based miles redemption program. They’re getting people into the habit of burning miles at a preset price of 1 cent per mile for a first/business ticket instead of a flat 45,000 at the saver level. Then they can slowly lower the availability of award tickets even further than it already is so it becomes much easier at the end to simply pull the award ticket option and instead remind people they can have any ticket at any time for 1 cent per mile as if it’s a great perk. And tada! Revenue based rewards program.

  3. @lapointsguy – saw you posted this on FT thread too. I agree with much of what you said. Will take time to digest but will have big implications that is sure!

  4. Clearly aimed at generating revenue (reducing liability of miles) by reducing benefits to top tier elites. At least compared to UA, you can use miles for the upgrade and not cash only.

  5. Delta is not making it easy to remain loyal. Degradation of status,(SM became a joke, GM became SM, etc) priority boarding for basically everyone with CC, etc may look good short term but it does make it easy to revisit loyalty programs or even simply ignore them. As they say, we do have a choice in airlines….Even in Minneapolis.

  6. This is good news. It allows pax who are willing to actually pay (be it cash or miles) to sit in front another option to do it.

    Perhaps getting more revenue for F will help improve the service in the forward cabin.

  7. If anything, this will result in more lower level medallions getting those seats than higher level. As a lowly SM, I never get upgraded anymore (on a recent SLC to ATL I was 107th on the upgrade list – more than half the plane was medallion).
    So going into my reservation- I know I’m not going to get the comp upgrade. I earn enough miles that I’d be perfectly happy to drop 6,000 skymiles for the upgrade if I want it, which will mean the guy who’s 1 on the upgrade list won’t get it.

  8. I will have to think on this one too. My initial thought is this: clearly, Delta is in business to make money, so I get that there have to be changes along the way to protect revenue. HOWEVER, how many changes can you make (in such a short period of time) that are not in the best interests of the most loyal flyers before folks start to jump ship? Problem is, frequent travelers understand that changing loyalty is difficult. I wouldn’t dream of going to Marriott mostly because I am Diamond Elite w/ Hilton. Same for me with Delta. I am only FO, but if I wanted to offer my business to a different airline, it would take months to achieve status, if I could even achieve it at all.

    As a fan of Delta, changes like this are tough. I want them to be successful (especially since I am from GA), but I also want to feel valued as a customer. With all these changes, I am sure many of us are wondering, are we really valued at all? What if every FO started patronizing another airline? Hummm…

  9. One caveat is that the upgrade for an elite heavy flight won’t be 6,000 miles but probably more like 60,000 miles. Supply and demand. Silvers will still be at the bottom as the Diamonds use their plethora of miles to upgrade.

  10. I prefer Delta over all of its competitors but there are times when I have no choice and must fly AA or UA. When AA declared bankruptcy, it eliminated the option of buying an upgrade at check-in. I have missed it sorely and fear that the US option of doing the same will die with the merger. If Delta does it, in my mind the odds of seeing it return to AA after the merger rise, which is a good thing.

    It is clear to me that the top Medallion members will resent the change and for good reason but for average business travelers, this has the potential to be a very good thing, especially on busy routes which, as you so rightly point out, often directly sell most or all of their first/business class seats before DMs and PMs have a chance to snag them.

  11. It’s disturbing, but the trend started quite some time ago. Delta has been more and more aggressive in pushing buy-in upgrades lately, a point I mentioned in a comment here last year which I feel was poo-pooed.

    I’d say in the near future upgrades will simply go to the highest bidder. At first sight that seems fair (and the highest bidder probably won’t be me, unfortunately). But as I think about it, this doesn’t mean the higher priced tickets have a better shot at upgrades — not at all! If I paid $200 for a ticket and the DM traveller in front of me paid $900, you’d figure s/he deserved the upgrade, no? Or at the very least, let the DM upgrade for a few bucks, no? But Delta may very well offer it to me for $100 rather than “insult” the DM by asking him for $50 since they make more money taking $100 from me than $50 from him. They have his $900 already so it’s more profitable to squeeze more from me! In fact, I’d expect they offer the upgrades to the LOWEST fares first and then move up the line and adjust the price until they are all gone.

    Really, all the changes are depressing. It’s so bad I wanna kill myself but I can’t because my family wouldn’t get my miles if I did 😉

  12. I think this will also have the effect of pushing more people into higher level AmEx cards (for the spend level bonuses) as well as encouraging more spend on AmEx in general. It is my understanding that the cc relationship is a major revenue source for airlines.

  13. I was GM last year and PM from about September forward. I only had 3 upgraded segments the entire year last year because most of the routes I fly you have to be DM to even think about getting an upgrade. This year so far I have had no upgrades. On one hand I’m with Steve where I feel I might actually be able to get more upgrades if I could use miles for them. However, I’d really prefer to use my miles for free flights than for upgrades. The one place where I would definitely like to be able to use miles to upgrade would be for the 10+ hour international flights.

  14. One other interesting thing was that with Pay-with-miles flights (not the upgrade option), for economy flights, the MQM indicator on the purchase page goes to 0 right away as soon as you pick any pay-with-miles option. But with Business/First flights, it seems to show full MQMs until a certain point, but towards the end of the dropdown when one pays only $100 cash, rest miles it Zeroes out. E.g., with a $1865 First refundable fare, I could go to $165 + 170,000 miles and the MQMs showed the full amount; after that, e.g. with $115 + 175,000 miles, it drops to 0. Same with lower-priced Business/First flights. That indicator has been incorrect before, so it might be a glitch, worth confirming with your CORP contacts.

  15. Very interesting indeed!

    You know, I don’t think this is the end of the world. I have to admit if I can get upgrades for as little as 10,000 miles I might start burning all these points I have lying around. It’s a not a bad deal for me. Once the redemption gets higher than that it does get less and less worth it… so there will probably be some kind of equilibrium at some point which will work in favor of the old style upgrades.

  16. You know, US Airways made a similar (but not identical) change in their mileage based upgrade scheme about a year ago. Lowering the number of miles required for upgrades based on distance flown. I have no idea if the result was getting more miles off the books or not, but I can’t help but think that was a goal.

    One thing is certain….. I would have gladly parted with 5900 sky miles yesterday if it got me out of coach from MCO to ATL during spring break. Whatever the reasoning behind all of this, we need to plan on change when it comes to mileage programs. Just my 2 cents.

  17. What this means for me as a silver with Delta is that I will no longer even bother trying to get my low level status. If I can just upgrade with miles on the flights that actually matter to me and not bother keeping loyalty, then that works for me. I just got the co-branded United card for a trip last week so I could check my bags for free and was treated pretty much the same by United with a card as I am with Delta as a silver. Lame. I spent almost $10k on flights with Delta last year.

  18. I agree with several comments (steve #8 especially) It erodes and degrades the medallion program benefits, especially at higher levels I am current awaiting an upgrade on a flight Thursday as DM and might not get it. THe coach seats are selling for 604.00 and first 664.00, I commented on this last year but was shot down. Who wouldn’t pay the additional 59.00 for an upgrade? and if all delta will benefit for that seat is 59.00 more dollars, offer it to me for that price, and it seems Delta is listening. Less benefits every day for the elite in their program. Its discouraging.

  19. It’s virtually impossible to get low level seats anyway with miles, especially direct flights. Just makes me glad that I’ve burned my husbands miles through the years instead of trying to bank them for one glorious trip. It’s gotten to where I dread even trying to book a “free” ticket.

  20. I’d be curious for you, Rene, to ask corporate if they are sorry they even ever started a “loyalty” program. I’m sure it’s like any business, the company adapts with the times but it sure does seem like its evolved to such a point that the airlines, hotels, etc. would just as soon drop all “loyalty” programs. I still remember the days when the government wanted to figure out how to tax the programs so I guess it could be worse!

  21. I think it’s brilliant. I don’t do mileage runs to get medallion status, and frankly, I get pretty frustrated when I spend thousands on Delta tickets and still find myself a Gold Medallion at a 5% upgrade rate. I used to think, ok, it’s a rare perk, at least I get to board early. Now this gives me a chance to get an upgrade on the long haul flights that I rarely ever see a chance at a comp. No offense to you mileage runners though. I’d prefer to use my miles to upgrade to first class.. I have plenty to burn.

  22. Three words – “the last straw”. I am a DM and have been every year it has been in existence. And a PM for many years before that. Not to mention about to hit 2 million miles. I’ve had it with their so called “loyalty” program. Every year it deflates more and more. This change, taken stand alone would be disappointing, taken in aggregate it’s awful.

  23. I think the question is will they use capacity controls to leave enough seats available for free upgrades for DM/PM? NW used to offer the ability to buy the upgrade at check in or the the boarding gate. Delta was offering to sell the upgrade but only on YBMHKQ fares,but I have not seen that offerred in a long time.

    The $140 million recently invested in customer-facing technology was only spent on the premise that it would generate more cash and profit than it would cost. Should be easy enough to to make some adjustments to handle selling the upgrades at the last minute while using capacity controls to keep a balance of seats for free upgrades versus selling some for miles or cash.

    There should be more F seats coming online with the replacement of the D95s and CR2s with the 717s. I would also postulate there are some routes that could stand to operate with M88/M90s or 738s or 739s with a 20F instead of 16F. The profitability of a DM/PM makes it worthwhile to hang on to the ones you have.

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