I don't know what your business is, if you sell a product or a service.

But, a word of advice. If you only look at the short-term profit on your business transactions, you could be doing yourself real harm long term. Those "zero" margin customers may be what is enabling you to earn those top dollars from the small guys. In some cases that may be because they are the ones giving you steady revenue to keep you going in between those sweet little small volume customers. Or they may be bringing in enough revenue and purchases to that your company can get the better deals for the smaller companies products. Will you be able to survive on, still offer the cheap cost to, and have enough market share to earn the higher prices from your small customers?

That is where Delta is going wrong here - they are assuming their mid and low level customers are going to stay with them, and still pay top dollar to fly them. If their customers jump ship for B6 or WN now because, lets face it, no benefit for them to stick with Delta, how are they going to fill their plane to allow them to make money off of their top paying customers? They still have a lot of costs that aren't going to be offset by lighter loads, and now they are going to have to sell more cheap tickets. SO now those high profit customers are not so high profit any more.

They tried this before with not giving mileage befits for low fare classes. And in the end they had to give it up because they couldn't grow market share. They were becoming a discount airline and that is what they are going to become again.

That's what I figured, but for a moment I thought I had missed simmering because the quoted statements seemed so definite. :)

What you say would be true if it were a market with actual competition. However it is an oligopoly.

Bold emphasis mine.
This statement is contradictory to itself. If these passengers were paying "top dollar", then they wouldn't be low-level customers. And DL knows only so many customers can jump ship. Demand is increasing as the economy rebounds somewhat, while supply is shrinking through mergers and capacity cuts. Passengers who need to fly have fewer options. The laws of supply and demand have turned in favor of the airlines, and they know it. They don't need to give every single passenger the farm to "keep" them. With less competition and capacity reductions, DL can afford to stop giving benefits to low value elites who would only pay a slight premium (if any) to fly DL as those benefits given out by DL cost more than the premium being paid by the passenger.

There is the mistake I am talking about.

DL is assuming that people who fly are a) going to continue to fly, and b) there are no other options. Here is where that is wrong. First, the more people hate flying, the more work they are going to be putting into avoiding flying. New options are opening up with teleconferencing and web meetings, likewise people will simply readjust their decisions whether that meeting is really required or not. optional travel - vacation, family visits, etc., will also be reduced as people decide it is not worth the hassle. So some of that revenue gets lost. Secondly, you are going to now find more passengers, particularly those mid tier passengers who will be on the margins (they have the miles but not the spend) will now only be shopping for coach class tickets. Now that they don't have a strong chance to get an F seat, why would they even bother being loyal to Delta when they get a better product flying JetBlue, Virgin, or Alaska? Even worse, with JetBlue adding first class on transcons, now they have an option for those really long flights. As B6 and VX and AS fill up with mid tier fliers, WN and other discount carriers start picking up more infrequent travelers, which then takes away from DLs coach sales.

The other mistake is that passengers either pay full fare or low fare. There are a fair number of mostly frequent fliers who pay those mid fares - K and H, because they are last minute and the company is paying. Now that they don't have an incentive to fly Delta, they are going to start shopping around, and again they will find a ready market in airlines like B6 and VX. Not to mention this now gives those airlines fuel to grow their networks to create more competition.

The other mistake is that just because a passenger does not fly, their entire portion of costs does not just melt away. While there is some direct cost due to weight and things like free sodas and nuts, the plane itself does not shrink if it is empty, you still need to pay all those equipment costs and handling costs at the airport, and you can't reduce a worker's hours by 20 minutes because you have 4 fewer people on that flight. That is a bean counter error because they are choosing to divide fixed costs among all passengers, even though they are not directly correlated.

You are very right in that the airlines are seeing this captive market because competition has been so reduced. And if they see it, then it is very likely that the public sees it too. And that is their last mistake - they are just plain going to tick off a significant portion of their customer base. Those customers are now going to be pushing for more controls over the industry. Where that leads is a big unknown, but it could have some very significant repercussions for the airline.

I know that nothing anyone says is going to change what Delta does. I do however want to point out that this is not going to be the nice benefit to higher-revenue passengers that everyone thinks it will be. They aren't going to gain anything out of this than they already have, and they stand to loose more than would have originally.

Hi all, I tried the search but no luck and I . How long does it usually take from the time you qualify for status and for your account to actually update and reflect your status?

Thanks

Usually right away or a few days

There are problems with spend, too.
 

Let's take the example of a petrol station.
Client 1 buys 2L of milk every 2 weeks, some candy bars, coffee, and magazines every month. Over a year, he spends $3500 but his items are high profit margin items (assume 30%). This person pays with check and doesn't participate in promotions most of the time (average cost for both .9%)
Client 2 buys $4000 in PNE tickets (assume 5%), $1000 on translink bus passes (assume 10%), and $12000 in phone credit and other gift cards (visa, best buy, SDM, Rogers, etc, assume 3%). This person uses an AMEX (assume 2.95% cost) and buys during 5x points promos 60% of the time (during this time, assume 4% cost)
Client 2 spends more, but isn't necessarily more profitable.

MQD back-of-envelope calc
 

I just did a quick calc on my 2013 numbers, and I'm basically screwed as far as keeping DM or even PM when MQDs kick in. My total 2013 fares paid average out to 7.07 cpm (almost all LUTVX fares), and that includes taxes and fees! Take the taxes out and that drops to probably 5.5 cpm or thereabouts actually paid to DL (I didn't do the calc, just making an educated guess). 12,500 / .055 = 227,272 MQMs. No way have I got a shot at that.

They're thinning the herd, and I'm going to get thinned.

Unless you switch to another carrier (hint, AS, hint)

My cpm is similar to yours, and I have no chance of spending $12,500 (plus tax!) in 2014. Wife and I intend to put all of our 2014 cc spend on the Gold Delta Skymiles amex card so that I can be Diamond in 2015. Completely sucks to put all of our spend on such a lousy card, but it's cheaper that actually buying pricy tickets.

The other suggestion about switching to Alaska Airlines' program is good, especially if they actually fly where you want to go.

I'm not informed enough to pick up on that hint. AS route structure doesn't fit well with my travel patterns. If you can enlighten me if I'm missing something, I'd appreciate it very much.

I'll have to explore the CC spend. I have a Plat SkyMiles AmEx but I normally use it only for DL tix and we put most of our spend on our Chase Sapphire.

Might as well switch to the Plat or Reserve card if you're going to be spending that much, so you get the miles/mqm boost and a companion cert. The gold card really gives crap for benefits now besides the free bag for non-elites.

Fly DL and credit to AS.
Better program, no metal requirement, and much more readily available awards.

To make it plain, some people join Alaska Airline's program even though they don't fly on Alaska. Earn by flying on partners and redeem on partners. They are like a single woman at a square dance; they partner with everyone.