Excellent news if true....

Maybe that will happen, maybe it won't. That's why I said "You can debate how it will play out". I'm not agreeing or disagreeing with the airline mentality; merely explaining where I can see the direction the executives are taking.

That may be true but will the new start-ups have the size to compete? We've seen LCCs enter a lot of markets and seen the fares drop, but the passengers (Elite or not) go "Yay for the low fares!" but still fly the legacy carrier that's matching those low fares and offering other perks too (Bonus Elite Miles, Bonus Miles, etc.) as well as often offering an expanded schedule. During the time of the LCC presence, the legacy carriers are bleeding cash but they have the resources to ride out the storm and wait for the LCC to call it quits and withdraw, and then raise the fares and reduce the perks.

The "complaint," if you even call it that, is that the people with status that year, who don't renew at the same level, get a month's less status than they normally would.

And EVERYONE will eventually be one of those people, unless you plan on dying without dipping any lower on the Medallion ladder. You just lost a month on your 2025 Medallion year Diamond status, or whenever. Mine will hopefully come earlier.

So every single person with status (except the dead ones and we know what happens to them) just lost a month.

Isn't that worth at least a small sigh from the crowd?

Will every start-up succeed? No. Does that mean that every start-up will fail in the face of competition? No. B6 managed to survive the legacy backlash pretty well, even when the legacies were throwing around some pretty ridiculous incentives to try and kill them (remember the "fly twice, get a ticket anywhere in the world" promos?). AirTran took the fight right to DL in ATL and managed to do okay. Allegiant and Spirit have carved out their niches.

Yes, the start-ups need good leadership and solid financial backing, but that is true of any start-up in a capital-intensive industry. Those that have it will manage to survive and even prosper if they execute.

You still seem to believe that there are only three airlines. Orbitz says otherwise. When I search there, they show many more than three options. Your favorite three will lose passengers to the others.

More price-sensitive passengers will put more downward pressure on fares.

A Kettle might be more profitable on a single flight. But DL doesn't have 100% occupancy, so it isn't shutting out the Kettles.

Sure...you have NK, B6, WN, VX, F9, G4 and I am sure I am forgetting a few.
Spirit, Allegiant, and Frontier - good luck with the LCC model. Have fun with the 28 inch seat pitch and a fee to sneeze. WN - where will DL's "most valuable" customers find their upgrades there? What will become of the precious inflight entertainment? Will they actually be reduced to ......reading........a book? Good luck with IRROPS on any of those. VX and AS have such a limited route network. The big 3 have it locked up. If you leave DL, and just shopping by price, you are giving fees to the other guy. They will have plenty leaving them and coming to DL. True HVC will receive benefits. The 3G and G crowd is left in the dust.

If I'm not getting upgrades, I'd rather not get them cheaper at a more convenient time. I don't think I've used an airline's entertainment this century. I read, listen to/watch an iPod or tablet, and sleep. IRROPS would be worse, but isn't that common. And the "plenty leaving them and coming to DL" because why? You want them to? To the extent DL could get those pax it already has, because profit maximization, remember?

No small sigh from this Diamond. True, we will 'lose' a month somewhere in the future -- unless the rules change again -- but IMO, that is a small tradeoff for knowing that for one additional month every year, there won't be pseudo elites competing for UG's. I will gladly take that tradeoff for the next 10 yrs.

I refuse to consider that I will travel this much for 10 or more years...that future is too dark to bear

If I was a DL elite, I'd rather have many years of fewer medallions competing during the bloated Jan/Feb months than one extra month of status when I've cut back or quit flying DL anymore.

I think you should have to subsidize any carrier to fly out of an airport with the same name as a sexually transmitted disease.

I compare this to my fantasy baseball league. Suppose I'm in a league that does not allow managers to "keep" players from one year to the next. Now, someone wants to allow "keepers" during the 2013 season. If 2013 is Year 0, you can't fairly allow keepers until AFTER 2014, or Year 1. I as a manager need to know before the draft that I can keep players the following off-season. I may have drafted differently in Year 0 (2013) if keepers were involved.

DL is in Year 0 in 2013 in regard to the end of the Medallion year. From January 1, 2013, it was known that status earned in 2013 was good until February 28, 2015. They can't change the rules on that now. Thus, they announce before January 1, 2014 that status earned in 2014 (Year 1) is good through January 31, 2016.

Seems logical to me.

Historically they have not had the resources to ride out such storms, every single legacy carrier has gone through bankruptcy in the past dozen years in part because of this behavior in the past. New entrants do not have to succeed in the long-term to get legacies to fall on their own sword.
No, it's not worth even a small sigh ... and others have already explained why more eloquently than I probably could ...

OK, 3 legacy airlines on domestic US fights.
Happy?

Delta will lose passengers to other airlines than those 3 (the other 2 of them) if passengers lose loyalty to Delta. That's my point.