Delta to 'Elite' Flyers: You'll Need to Spend More Money

To be considered an elite passenger at Delta Air Lines, you will need to spend more money. After becoming the first of the network airlines to tie mileage accrual to how much revenue a frequent flyer generates, Delta has increased by 20 percent the yearly spending threshold that members of its SkyMiles program must reach to qualify for elite status.

To become a basic elite member, Delta customers will need to spend at least $3,000 in 2015 and fly either 25,000 miles or 30 qualifying flight segments. Reaching top-tier “diamond” status will require paying at least $15,000 in air fare and traveling 125,000 miles. “Let’s face it. When you spend a lot of time and money with us, you should enjoy our top-of-the-line benefits,” Delta said in an e-mail to the program’s “medallion” members. The changes don’t affect those who reach elite status by spending $25,000 or more per year on a Delta-branded American Express card.

Beyond trying to make its club more exclusive, the change reflects Delta’s high opinion of its product. As the carrier tries to eradicate flight cancellations, improves its on-time performance, and spends more on nicer amenities, it clearly considers the value it offers to customers to be greater than in past years. Requiring travelers to spend more to earn elite status also will help cull the number of people who fly on cheap tickets to gain their status, as well as reward those who fly on pricier, last-minute tickets—usually the true corporate road warriors or celebrities.

For much of the three-decade history of these mileage programs, U.S. airlines measured loyalty by how far a customer flew each year, not taking into account the passenger’s financial value to the airline. Delta broke from that tradition in February when it announced a switch to mileage accrual based on a ticket’s cost.

The revisions are part of an almost wholesale revamping of the programs at Delta and United since 2013. The overhauls have been aimed at identifying and better rewarding the airlines’ top revenue generators among their frequent flyers. Delta has said that fewer than five percent of its customers account for about one-quarter of ticket revenue. Other airlines, including Lufthansa, Southwest, JetBlue, and Virgin America, have migrated to revenue-based systems.

Delta last week also said that starting on Feb. 1, 2015, it would no longer allow upgrades from its cheapest “basic economy” fares, even for elite members. In a blog post, editor Tim Winship called the change “mean-spirited and short-sighted.” Delta says it believes it will be easier next year for frequent flyers to use miles for free award seats—the difficulty of doing so has been the biggest complaint at SkyMiles for several years—and to book one-way trips with miles. The company is also eliminating blackout dates for award seats.

The higher revenue levels for elite status may well be copied by rival United, which followed Delta in imposing a spending minimum. Airline mileage junkies are watching to see whether American will match the changes after its integration with US Airways progresses further following the merger of the two carriers.

Before it's here, it's on the Bloomberg Terminal.