Delta’s CEO Ed Bastian gave a Q&A at the Rotary Club of Atlanta where he was asked staged questions regarding his proposed changes, but what he didn’t say was the most compelling.

In his first public comments since the huge changes aimed squarely at thinning the elite ranks, the Delta CEO seemed to admit he goofed up. After all, he said the SkyMiles team just wanted to “rip off the bandaid” and suggested they were perhaps a bit too eager. He said he received a lot of feedback that suggested Delta’s actions were too extreme. And that they’ll look to respond in the coming weeks.

But let’s break this apart a bit and understand what he’s really saying here because I don’t think he is painting as rosy a picture as some might say.

Click here to jump to his comments on the program changes.

Ripping off the bandaid

At no time does he declare the changes will be completely undone. Instead he openly admits this endgame is needed. He uses the terms “rip off the bandaid” instead of “nickel and diming” when it comes to how he describes his company’s actions. What he’s setting everyone up for then is that these are the only two possibilities his company can take. So instead of doing the changes all at once, expect them to happen over time where loyal customers get “nickel and dimed” as he nicely put it to where we eventually get to what he envisioned in the first place

As I referenced before, Delta dug itself into a bad spot because it kept rolling over MQMs every year in their entirety. Pre-pandemic, only the incremental MQMs above the minimum to earn your elite status would be rolled over to the next year to give you a jump start on next year’s qualifications. However, during the pandemic, Delta decided to roll over 100% of the MQMs and did that for several years. As a result, everyone’s MQMs ballooned to large balances, allowing people to gain access to higher levels of elite status they normally would not achieve. On top of that, the rollover feature would suddenly allow elite members to coast potentially for years, all depending on how many MQMs they had. The one feature of the company that made it unique (rollover MQMs) was likely the main cause of issues among company executives wanting to earn more money off its customers.

So when the Delta CEO suggests he will reconsider some changes, rollover MQM is in no way coming back. While some hope for some optimism in converting existing MQM balances over to MQD, I don’t expect there to be significant change here. Elite members with large MQM balances can’t do anything with it. You can’t book travel with MQMs. You can only trade it in at the rate Delta dictates, so why throw a bone to elite members, especially to those with hundreds of thousands of rollover MQM? Allowing them to coast into elite status next year isn’t what they wanted to achieve.

Listening to feedback

Delta’s CEO mentioned during his talk that he personally heard a lot of feedback and it inspired him to make changes. But what feedback is he talking about? I don’t doubt that many angry Delta flyers found his email address and spammed him with emails detailing their frustrations. But I also don’t doubt that he has an admin or two who is responsible for sifting through emails such that most of the commentary never makes it to his inbox.

Instead, there’s only two potential areas where I think he cares about the feedback. The first is his big-time partner American Express, which could be facing a problem where customers are indeed canceling their credit cards in large amounts. My guess is that those with the Delta Platinum card were the most likely to decide to break up with the company. Delta Platinum cardholders lost a respectable earn rate to elite status and also lost all ability to enter the lounge (previously could pay for each entry). Delta’s actions clearly said to customers that you need to hold a $550 annual fee card if you wish to be an elite member and that likely didn’t go over well with American Express. My guess is Delta was optimistic that those with the Delta Platinum would upgrade to the $550 Delta Reserve and not see significant cancels. If Delta makes the MQD earn rate better on the Delta Platinum card, we will know that American Express complained about the card cancellations.

The other area for feedback also wasn’t from customers but had to be from competitors. Both Alaska and JetBlue launched special campaigns aimed specifically at Delta elites, with each program offering immediate benefits up front lasting potentially to the end of 2024. I’m not sure how much Delta considers Alaska and JetBlue to be viable competitors given both are more regional concerns with limited international flying. But what Delta doesn’t want is American and United jumping into the fray with targeted offers. So they jump in with news that they will offer up some changes to elites in the hopes customers will wait it out to see what changes before making drastic decisions on who to book travel with.

In the coming weeks

Delta’s CEO said they will respond in the coming weeks to offset some of the changes. But really, the changes needed to be available now. Instead they offer a vague timeline, which seems best designed to get members to delay looking around as they debate about how to move forward. The status match offers from both Alaska and JetBlue have deadlines attached and getting someone to wait for the Delta news may make them unable to meet the terms of those status matches. It also changes the ambience in the room from dread to perhaps hope.

But really, the commentary was just a means to stop the bleeding because it must be hurting their bottom line to not say anything.

What I expect

But I am not as optimistic as some. Now that Delta ripped off the bandaid, there’s little benefit for them to roll back most of the changes. So let’s talk about everything major that happened and what I think will happen.

• Rollover MQMs are done — these aren’t coming back as I described above. This is what caused Delta’s swelling of the elite ranks so bringing it back is foolish.
• MQDs are the only metric going forward — Delta wanted “simplicity” with its new program qualifications, so don’t expect anything to be brought back (MQM, MQS) or anything new to be introduced.
• Removal of lifetime MQMs to be replaced with lifetime butt-in-seat miles — this won’t be reversed because it would mean MQMs would have to come back in some form. Competitors don’t allow lifetime miles to be accrued via credit card spend so why should Delta be more generous?
• Spend on Delta Reserve cards at $10 per MQD — I don’t expect this to change. Why would they change it up now? Keep this the same and just run limited time promotions for a better earn rate if they need to drive more credit card spend.
• Spend on Delta Platinum cards at $20 per MQD — as I mentioned above, I do think American Express is complaining to Delta over this one. As such, I expect this to change to $15 per MQD.
• Cutting access to Delta SkyClubs from unlimited visits on the Delta Reserve / Amex Platinum to 10 on the Reserve / 6 on the Amex Platinum unless you spend $75k on the cards — Delta has been having issues with crowding at Delta SkyClubs and this would likely significantly help alleviate the crowds. Those chasing elite status should already have the Delta Reserve card and likely already spend $75k a year on it. This would then only impact those who aren’t chasing status and I would think Delta is ok with that decision. That being said, the restriction is based on lounge visits, not per day. So if you have a connection or two and want to visit the SkyClub before each flight, those visits quickly add up. I wouldn’t be surprised if Delta changed this to be based on days rather than visits (and see if lounges are still crowded before contemplating more moves).
• Cutting paid access to Delta SkyClubs on the Delta Platinum card — yep, this isn’t coming back
• Cutting access to Delta SkyClubs when booking basic economy — right now there is little distinction between regular economy and basic economy (mostly when you board and seat selection). I don’t like the draconian rule as it punishes loyal travelers by asking them what have you done for me lately? That being said, I expect no change from Delta here.
• Elite MQD thresholds went up between 50% and 100% — here is the real winner on where Delta may do the most good in rolling back changes. They can keep the skeleton of the new structure in place to get elite members used to the new way of earning status. They can then just move the goal posts a little closer in an attempt to stop those with wandering eyes from going elsewhere. The real question is how much do they roll it back. Let’s roll it back just a little and instead assume they go with $5k for Silver, $10k for Gold, $15k for Platinum, and $30k for Diamond. To me, that seems more of a happy medium between what they crafted ($6k / $12k / $18k / $35k) and where they’re at now ($3k / $8k / $12k / $20k).

Will it keep elite members from leaving? I’m sure some will look at Delta more favorably, convinced the company responds to customer feedback and changes that match up closer to where competitors are at.

Granted, if the changes are materially close to what I outlined above, it won’t keep me sticking around Delta. The CEO acknowledges he will be nickel-and-diming customers because that’s the only other alternative offered. So here we know the goal posts will change in advance. If someone decided to rob me, demanded half my money but told me to wait around for a bit and he will come back to take the rest, I don’t stand there waiting for his return. I leave, which is what this ex-Delta Platinum member is still going to do.

The big thing to note here is just earlier on Wednesday, before Ed Bastian gave his comments to the public, SkyMiles was still furious at its own members getting value from its frequent flyer program and dramatically increased prices (to the tune of 40%) to Europe in business class that originate in Mexico. They were tired of some members making their way over to Mexico City to start their journey and travel at reasonable rates, so they decided to kill the option. The program has no love for its own members no matter how much Ed Bastian wants to convince people otherwise. Why believe he has an ounce of remorse for the changes he made when just hours earlier they remove one of the last remaining places where SkyMiles has value?