Delta CEO says SkyMiles changes ‘probably went too far,’ and that ‘modifications’ are coming.
Delta Air Lines CEO Ed Bastian has admitted that the airline may have gone too far with changes to its frequent flyer program, SkyMiles, which have outraged many loyal customers. Speaking at the Atlanta Rotary Club, Bastian said, “No question, we probably went too far. Our team wanted to kind of rip the band-aid off.”
Delta’s recent changes to the SkyMiles Medallion program would make Medallion Qualifying Dollars (MQDs) the sole qualifying metric and significantly raise spending requirements to reach the various levels of status. The company would further emphasize spending on Delta credit cards while eliminating requirements linked to taking actual flights with the airline. Delta also announced changes to its Sky Club lounge access policies, limiting the number of times premium credit card holders could visit the lounges each year.
Bastian said that Delta was considering walking back some of the changes, but he did not elaborate on what the further changes could look like. “We’re still assessing what we’ll do, but there will be modifications that we will make, and you’ll hear about it sometime over the next few weeks,” Bastian said.
Bastian argued that the changes were necessary to effectively serve Delta’s most loyal passengers. “It’s gotten to the point where we have so much demand for our premium products and services that [it’s] far in excess of our ability to serve that effectively,” he said. He cited things like upgrade certificates, lounges, and elite member support phone lines.
However, the changes have sparked controversy and sustained pushback from travelers. Ranks of elite members have swelled at various U.S. airlines since the pandemic, creating a difficult quandary for airlines on how to continue to reward loyal customers without giving benefits to so many customers that the perks become diluted.
Delta, in particular, has benefited to the tune of billions of dollars annually from its credit card partnership with American Express, which has caused Sky Club lounges to become crowded beyond capacity, and elite members have found perks devalued to the point of being almost worthless.
Bastian acknowledged that the overwhelmingly negative reaction to Delta’s changes has laid bare the importance of the program and the brand, and that the airline will consider this as it further modifies the program. “I think we moved too fast, and so we’re looking at it now,” he said. “We will be making modifications and changes because it really matters to us.”
Consumer Pressure
Delta CEO’s comments come amid increasing pressure on frequent flyer programs to provide a crucial, high-yield share of airlines’ annual revenues. Banks pay airlines for miles, which they then distribute to customers as credit card spending rewards.
American Airlines similarly changed its frequent flyer program to a purely spend-based system in 2022, while other carriers have discontinued rollover programs and emphasized spending more as part of their programs.
Despite the challenges, Bastian emphasized that Delta is in the business of serving people and wants everyone to be served at the highest level. “It’s just way in excess of our current asset base, and it’s unsustainable where we’re at now,” he added.
