Sep 28, 2023, 8:49 am
Delta rolling back some changes
Oct 10, 2023 | 5:21 pm
#631
Join Date: Apr 2016
Posts: 2,130
250K in expenses a year thru amex is not how the average medallion member attained status via Spend. They are a very small minority and not "the problem" per se. Most did acquire it by a combo of low flying spend and low-moderate CC spend. That said, DL is not a bank. And signing up new CC members is unsustainable to the brand. We don't know the future of the most likely fraught relationship between Amex and DL. I do know that the exact number of "elites" who gamed the Amex system and the elite structure but it's MASSIVE. Their initial modeling was flawed and obv did not accurately predict the outcome, which was way way way too many elites. You can't model the effect that tic-tok and instagram and all social media have on a product. DL has spoken and their actions have made made clear a)what the problem areas are b)who the elites they want to have and c)who they don't mind losing. I will say that certain markets like MSP, they may make some sort of carve out for certain biz-centric captive hubs. That remains to be seen. AA and UA they will gladly take the overflow and we know the CC hawking that those poor FA have to do on AA, they need that revenue. DL is not UA or AA or any of the others and they don't want sully their brand or their service. And if it means pissing off CC spenders vs high spend biz travelers or high spend leisure travelers so be it. You still have to fill the back of the plane and that's fine but you don't need the back of the plane low paying customers to have the same benefits as the flyers paying the bills.
From Delta's 10K published in February, Loyalty Program revenues were $2.6 billion in 2022. "[Loyalty Program revenue] relates to brand usage by third parties and other performance obligations embedded in miles sold, including redemption of miles for non-travel awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. On continued strength in co-brand card spend and card acquisitions, revenues from our relationship with American Express increased in 2022 compared to 2021." Net income was $1.3 billion in 2022. Knowing that DL received total cash from the Loyalty Program agreements of $5.7 billion, and that they allocate the revenue across the categories that it is used in, the $2.6 billion represents the net income of the AmEx agreement. Since the profit from AmEx is greater than DL's total profit it seems that flyers don't pay the bills, but AmEx and their cardholders.
Oct 10, 2023 | 5:24 pm
#632
Join Date: Feb 2019
Programs: Kroger Plus, Starbucks Green Card, My Walgreens
Posts: 5,557
Oct 10, 2023 | 5:25 pm
#633
Join Date: Sep 2023
Posts: 83
If youre spending $6K for a C+ seat to the EU on a leisure trip, you need your head examined.
Yea, about that book you could supposedly write. Youve obviously never once looked at DLs balance sheet to understand how profitable the DL-AmEx relationship is for DL and why DL implemented a program with the aim (in their minds) of increasing revenue through CC spend. You continue to refuse to acknowledge this and state the same tripe over and over and remain completely immune to basic facts to where one can only assume this is a troll job at this point
Yea, about that book you could supposedly write. Youve obviously never once looked at DLs balance sheet to understand how profitable the DL-AmEx relationship is for DL and why DL implemented a program with the aim (in their minds) of increasing revenue through CC spend. You continue to refuse to acknowledge this and state the same tripe over and over and remain completely immune to basic facts to where one can only assume this is a troll job at this point
Oct 10, 2023 | 5:28 pm
#634
Join Date: Sep 2023
Posts: 83
And if you call me a troll again, I will contact the mods, show them the stamps on my passport book (which has 2x the pages as yours) and then ask them to sanction you.
Oct 10, 2023 | 5:29 pm
#635
Join Date: Apr 2016
Posts: 2,130
It's not hard to put 350K thru Amex as business expenses. And DL is not a bank and they only see a small percentage of that. And don't for a second underestimate the spending power of retirees. They have amassed a lot of money and they are spending it on leisure travel and have NO problem spending 6K r/t east coast to western EU for a C+ seat or a transcon or JFK to MIA. Your CC thing isn't that profitable. Not nearly. CC spend should have nothing to do with elite status any more on DL. Let AA and UA and Alaska take that on. Let the rest of the people who are willing to pay for a premium product have the better experience that they willing to pay more for. You can't pay 12K or 18K a year in ticket spend? But you can spend 350K on business expenses thru Amex? Yeah, no. 18K a year is nothing. I spend that every month and then some.
Oct 10, 2023 | 5:34 pm
#636
Join Date: Sep 2023
Posts: 83
The flyers paying the bills???? By your logic, status should be awarded to AmEx employees and cardholders only.
From Delta's 10K published in February, Loyalty Program revenues were $2.6 billion in 2022. "[Loyalty Program revenue] relates to brand usage by third parties and other performance obligations embedded in miles sold, including redemption of miles for non-travel awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. On continued strength in co-brand card spend and card acquisitions, revenues from our relationship with American Express increased in 2022 compared to 2021." Net income was $1.3 billion in 2022. Knowing that DL received total cash from the Loyalty Program agreements of $5.7 billion, and that they allocate the revenue across the categories that it is used in, the $2.6 billion represents the net income of the AmEx agreement. Since the profit from AmEx is greater than DL's total profit it seems that flyers don't pay the bills, but AmEx and their cardholders.
From Delta's 10K published in February, Loyalty Program revenues were $2.6 billion in 2022. "[Loyalty Program revenue] relates to brand usage by third parties and other performance obligations embedded in miles sold, including redemption of miles for non-travel awards. These revenues are mainly driven by customer spend on American Express cards and new cardholder acquisitions. On continued strength in co-brand card spend and card acquisitions, revenues from our relationship with American Express increased in 2022 compared to 2021." Net income was $1.3 billion in 2022. Knowing that DL received total cash from the Loyalty Program agreements of $5.7 billion, and that they allocate the revenue across the categories that it is used in, the $2.6 billion represents the net income of the AmEx agreement. Since the profit from AmEx is greater than DL's total profit it seems that flyers don't pay the bills, but AmEx and their cardholders.
Oct 10, 2023 | 5:37 pm
#638
Join Date: Sep 2023
Posts: 83
Delta has spoken. There are a lot of flyers who agree with their new direction. They aren't voicing it but they are pleased.
Oct 10, 2023 | 5:40 pm
#639
Join Date: Sep 2013
Location: Paradise
Posts: 1,696
I'm convinced this person is Ed, trying to troll us all on here.
Oct 10, 2023 | 5:41 pm
#640
FlyerTalk Evangelist
Join Date: Jun 2015
Location: Back in Reds Country (DAY/CVG). Previously: SEA & SAT.
Posts: 11,999
And is it supposed to impress the rest of the forum or somehow put you on a pedestal above because you think you fly more than everyone else here? For as much time as you claim to spend on planes and flying on airliners, your understanding of frequent flyer programs and airline economics is still lacking.
PS: its not complicated to use the multi-quote function and combine several responses into one post.
Oct 10, 2023 | 5:42 pm
#641
FlyerTalk Evangelist
Join Date: Dec 2002
Location: Danville, CA, USA;
Programs: UA 1MM, WN CP, Marriott LT Plat, Hilton Gold, IC Plat
Posts: 18,125
In fact probably 95% will vote with their feet. Only the few who spend $12k+ (mostly OPM) will be "pleased" and that probably doesn't include Diamonds/Plats who are dropping down.
You cannot be serious. The average American makes 60 grand a year, $350k would put them in the top 5% on incomes (probably higher as most people don't put their mortgage, 401k and other expenses on Amex).
$350k is basically impossible for everyone except small biz owners who actually gross a lot more than $350k (most commercial landlords don't take amex).
You are either joking or have a warped view of how most consumers and small biz operate.
I think you would be surprised how much mostly Boomer 65+ travelers are spending on seats in C+ and above. But I KNOW that Delta knows and it has nothing to do with Disneyworld. You are way off base here. I'm not one of those travelers but I know who that traveller is: they want the bigger seat, they want to be comfortable, they want to board first and they are paying a lot more than you think. And they aren't going to Orlando.
Last edited by Boraxo; Oct 10, 2023 at 5:58 pm
Oct 10, 2023 | 5:43 pm
#642
Join Date: Sep 2023
Posts: 83
Ok, so you think that people who don't fly meeting those thresholds should run their business expenses thru Amex and those people should get the elite status? Because that's where I disagree. And apparently Delta does too.
Oct 10, 2023 | 5:43 pm
#643
Join Date: Apr 2016
Posts: 2,130
I was just wondering the same thing, lol. Their first post was on the same day that the program changes occurred and they seem to become more and more active as DL faces more and more blowback, so...
It also might explain why they think airline ops are profitable...the only other person that I am aware of who also might think that is Ed.
It also might explain why they think airline ops are profitable...the only other person that I am aware of who also might think that is Ed.
Oct 10, 2023 | 5:50 pm
#644
Join Date: Sep 2023
Posts: 83
The $95/year SkyMiles Gold gets many a high paying leisure traveler that free bag benefit. Its a classic I keep it for the once a year family trip to Disneyworld credit card, even with people who sock drawer it and throw 99% of their spend elsewhere.
The high spending leisure traveler got into that position in life by knowing where to economize or find deals in areas that positively impact both their bottom line and their customer experience.
The high spending leisure traveler got into that position in life by knowing where to economize or find deals in areas that positively impact both their bottom line and their customer experience.
Oct 10, 2023 | 5:55 pm
#645
Join Date: Sep 2023
Posts: 83
I was just wondering the same thing, lol. Their first post was on the same day that the program changes occurred and they seem to become more and more active as DL faces more and more blowback, so...
It also might explain why they think airline ops are profitable...the only other person that I am aware of who also might think that is Ed.
It also might explain why they think airline ops are profitable...the only other person that I am aware of who also might think that is Ed.