I’m sure you’ve read the recent reports that Delta is going to an all revenue based model. A few days ago, I wrote that Delta Air Lines Finally Puts the Nail in the Coffin for Mileage Runners. I ran the numbers and found out that it necessarily isn’t a bad thing for a hardcore Delta mileage runner if he doesn’t care about the decrease in redeemable miles.
Let’s say John Doe is currently a hardcore Delta mileage runner. He is a Delta Diamond based in the US and has no problem spending $25,000 on his Delta Skymiles credit card for the Medallion Qualifying Dollars waiver. He scours Flyertalk and mileage runs at an average of 3cpm to reach 125,000 miles for Diamond re-qualification.
John Doe will have spent $3,750 out of his own pocket to achieve Diamond and earned 281,250 Skymiles (125,000 miles + 156,250 125% bonus RDMs). Under the 2015 system, he will only earn 11 miles per dollar spent for a whopping 92,812 Skymiles (41,250 + 51,562 125% Skymiles).
Medallion Qualification this year – John Doe spends $3,750 to reach Diamond Medallion and earns 281,250 redeemable miles (worth $2,812).
2015 Medallion Qualifying year – John Doe spends $3,750 to reach Diamond Medallion and earns 92,812 redeemable miles (worth $928).
Currently, John earns a significant portion of redeemable miles, but his redeemable miles rebate are worth 67% less under the 2015 revenue based program.
Is it worth it to mileage run for Delta’s Diamond Medallion status if you’re earning 67% fewer redeemable miles?
Just spoke with a person at Delta, they are already seeing a drastic reduction in the number of mileage runs going on this year. Almost a third of the Diamond Medallions they identified as “Gamers” (Internal Delta word for folks that only fly for the status and RDM’s) have failed to even book a flight with Delta in 2014 as of 4/20/14.