DL & UA Engage in Mileage Shenanigans with AMEX & Visa

Discussion in 'General Discussion | Miles/Points' started by Kalboz, Sep 17, 2013.  |  Print Topic

  1. Kalboz
    Original Member

    Kalboz Gold Member

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    An article in ZNet about mileage running and the revenue based status: http://www.zdnet.com/delta-united-e...nigans-with-american-express-visa-7000020741/

     
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  2. Mike Reed

    Mike Reed Gold Member

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    But are the revenue requirements really that high? Delta and United are both 10 cents per MQM. Ignoring Rollover MQM, are there Delta or United Platinum that start from zero each year and aren't spending $1,875/qtr ($625/month) with Delta and/or United?
     
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  3. Wandering Aramean
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    Wandering Aramean Gold Member

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    Sure. And there are Silver who don't spend $2500 during the year. They may not be profitable to the airline and there may not be a ton of them, but they are certainly out there. And I say this from several years of personal experience.
     
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  4. Mike Reed

    Mike Reed Gold Member

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    Fair enough. Here's the better question: Assuming you were spending personal money, are the benefits conveyed at each level worth the dollar amount of spend required to get them?
     
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  5. Wandering Aramean
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    Wandering Aramean Gold Member

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    I am spending personal money. I don't think that the premium spend is worth it, especially given that many of the benefits can be had via other means.
     
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  6. MSPeconomist
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    MSPeconomist Gold Member

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    There's a thread over in the DL forum at TOBB where folks are posting their MQMs and MQDs. Many are well over ten cents per mile, but there are a number of others that are very much under the thresholds. Remember too that taxes and government imposed fees are excluded, at least according to DL's definitions.

    DL is also giving waivers to those with legitimate foreign mailing addresses and anyone who spends over $25,000 per year on DL AmEx cards.
     
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  7. redtailshark

    redtailshark Silver Member

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    Yes, spend levels within the tiers vary wildly. But net spend =/= net profitability to DL (or OAL).

    Nobody - not even the airline bean counters - know for sure whether all Silvers who spend $2500 p.a. on DL - or any OAL - are all equal. Nor do they currently know for sure that the $7500 p.a. Silvers > $2500 p.a. Silvers.

    In the admittedly rarer cases in the current market where that flyer always buys cheap tickets, on routes where they not only do not displace any form of higher paid travel, but they really occupy an otherwise empty/nonrev seat, then their marginal value to DL could well be near the net $2500 customer revenue (net revenue-direct and indirect costs, where indirect costs include revenue displacement effects). OTOH silvers who spend $5k or even $8k p.a. on a few transcon flights which they then UG with their AmEx miles to BE four times a year - and ultimately, later end up displacing walk-up J movie- or IT-exec pax who would be willing to pay $3k+ for each sector on DOD, might in fact be damaging net revenue (i.e. costing DL far more than the $5k they yield)...even though their gross spend looks good in isolation.

    I'm not saying for sure this happens, just that a first-principles economic examination of customer revenue generation must take into account not only the easily-measured individual revenue (MQD/PQD) but ALL incurred costs - and that the current methodologies for sure do not do this. There are some interesting experiments that might be done...yoohoo, Jeff :) I'm ready when you are, to give it to the DL DM/PM gamers!

    I agree the YM can't know all this and can't put in place too complex systems - wait, except for DL's SDC/SDS kraken or their award booking engine - which is why they pursue what they see as Occam's strategy. It's hard to tell if this, specifically, is working because a. it's new and shows no data and b. in the current consolidated and post-recessed market, airlines with no workable FFP at all make just as much if not more money. The revenue forecasting models assume many things, some of which are more realistic in the current tight market than others.
     
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  8. bretta

    bretta Silver Member

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    Just as a datapoint, I am currently DL silver (38,016 MQMs) and only have $634 MQD. Mostly this is due to getting the DL Platinum AMEX card with a special offer for 20,000 extra MQMs and only flying cheap flights paid with my own money. I will easily hit DL gold with under $1,000 MQD, but with over $25,000 in credit card spending (so it wouldn't matter anyway).
     
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  9. ballardFlyer

    ballardFlyer Gold Member

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    As another data point, I'm a PM with under $1700 in qualifying MQD spend this year because all my paid J travel has been on AF/KL tickets this year since they have typically been $1-2k cheaper per itn. I already hit all thresholds on DL CC so I'm not worried about this change, but its bad for my SO who does no CC spend much hence her move to AS this year.
     
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