Airlines tighten frequent-flier rules

Carriers are starting to track spending on tickets, not just miles flown. Delta's shift in its rewards program is expected to be followed by rivals.

By Bruce Kennedy Jan 22, 2013 10:24AM

Woman using computer on airplane -- Compassionate Eye Foundation, Lifesize, Getty ImagesFlying on most airlines has lost its thrill. It's a sad truth that almost all veteran travelers know.


The glamour that was once air travel has long been grounded by the industry’s economic realities, and only those willing to pay out top dollar for the best tickets can still look forward to anything approaching a comfortable and relatively hassle-free trip.


But even the perks associated with frequent flier programs are getting more stratified -- and will depend on the amount you spend on tickets, and not just the number of miles flown.


Last week, Delta Air Lines (DAL) announced it was changing the requirements for its SkyMiles Medallion customers in the United States. The company says its move "follows an industry trend of rewarding customers based on dollars spent."


And those changes are expected to break ground for other air carriers.


Delta has set up a chart of what it calls "medallion qualification dollars," with its lowest level awarded to customers who fork out $2,500 each year -- and a "diamond" designation for fliers who spend $12,500 annually. Those rankings will determine how much access Delta customers have to luxuries like seat upgrades, priority baggage handling and airline lounges.


Customers who charge $25,000 a year in eligible purchases on their American Express (AXP) Delta SkyMiles card get to breeze to the top of the ranking system.


The changes will not affect customers this year.


"These changes are a result of considerable research that we've conducted including conversations with hundreds of customers, many of whom expressed a desire to see the Medallion program truly target our best customers," Jeff Robertson, the company’s SkyMiles vice president, said in a press release.


"Adding a revenue component to the SkyMiles Medallion program ensures that our most valued customers receive the best program benefits and a more exclusive experience."


But industry analysts say it all goes back to the airlines’ bottom line.


"Big airline frequent-flier programs have become cash cows, as airlines sell billions of dollars worth of miles to credit card companies and others to give out to their customers," blogs Ed Perkins on SmarterTravel.com. "And carriers can easily cope with the huge numbers of miles by limiting award seats. I expect more tightening of elite programs going forward."


More on Money Now

11Comments
Jan 22, 2013 4:29PM
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My company has been a Delta customer for many years, since the change has been announced we are now shopping for another airline. They are truly turning their back on most of their loyal customers. This seems to be an American trend.
Jan 22, 2013 6:26PM
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$125 / bag overseas only peanuts for meals  cattle cars for planes  flying sucks
Jan 22, 2013 5:45PM
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I'm pretty disappointed in this change and I hope by end of year Delta can reconsider.  Now if you try to wait for the lowest fare you're being penalized for "not spending enough"?  I'll probably end up a Silver Medallion after being Gold for the few years since I'm a leisure traveler but the question for me is "what's next"?  I think I value most the free baggage check-in and I don't plan on getting an AMEX card to offset that but I think I'll have to really evaluate my travel plans if Delta actually implements this plan next year.
Jan 22, 2013 8:28PM
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The last time Delta changed their frequent flyer policies they lost me.  I found an airline that could do instead of one that stands in your way.  Roll over Delta, play dead.
Jan 23, 2013 12:17AM
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So glad to have good airlines like JetBlue!

Jan 22, 2013 11:34PM
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That's not all.  Silver Medallion status now gets you less on Delta. You no longer get "SkyPriority" status on Delta or Delta partner international flights if you merely have Delta Silver Medallion status domestically. You need to accumulate Gold Medallion status now with 50,000 MQMs in a callendar year. Of course this is unfair to folks who made Silver Medallion status in 2012, planning on getting the same benefits they previously had.
Jan 23, 2013 6:25PM
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Delta now sucks...watch your baggage weight.. They sometimes tweaked  the skill to make 70 lbs more than 81 lbs...so they can charged you for overweight baggage..I was once almost a victim if I did not weigh my check in bags at home...and the meals are getting smaller for international flights.. The service and the amenities are contracting while the fare is increasing..

Jan 24, 2013 6:03PM
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What'll happen with future generations (when today's kids become tomorrow's adults)? I hope this won't be their new normal.
Jan 22, 2013 12:29PM
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