Originally Posted by
ethernal
We'll see how the changes work for Delta. I think there is a risk their effort to drive the highly profitable credit card spend and ancillary spend (Delta vacations/stays/car rentals, ...) will backfire. To be blunt, it is basically a gamble that consumers will make poor economic decisions in the chase for status and/or brand affinity. I think that persistently expecting consumers to make poor economic decisions is not a strong business strategy, but P.T. Barnum and Delta/Amex's data may disagree with my assessment.
This move on DL's part fascinates me. I decided to switch to BA's program despite the numerous drawbacks for domestic AA travel, so this is mainly of academic interest to me, but I wonder how large the population of Brandons, Meghans and Marcuses really is, especially compared to the inevitable revenue drop. Someone willing and able to shift 6-figure spending to an inferior credit card just to compete for free upgrades must be a rare beast. Those willing to spend tens of thousands annually on DL can probably afford to buy domestic C+/F tickets already, except corporate travelers locked in with DL who have no choice either way. Anyone below the MQD threshold will analyze whether paying your way to the threshold is better value than premium seats on other airlines and more often than not the latter will be favorable. Once everything is measured in cash, this calculation becomes a lot easier. All of which suggests that the only effect of these program changes is attrition i.e. making Medallions more elite for those who decide to stay. But why would an airline voluntarily drive down its revenue just to please its existing frequent flyers? Would existing top spending DMs stop flying Delta because of Skyclub overcrowding? Unlikely given no obvious better options for high spenders domestically. Attrition in the Medallion ranks could be accomplished with much less downside by simple qualifying MQM inflation.