American air carrier Delta Air Lines (NYSE:DAL) is changing its loyalty reward program (SkyMiles), making it harder to earn its elite status and curbing access to fancy airport lounges. At the same time, Delta widened the eligibility to earn reward points by increasing the number of options on which they can be earned. The move will also make it harder for American Express (NYSE:AXP) co-branded cardholders to earn points as well as enter the carrier’s Sky Club lounges.
In addition to frequent flyer miles earned, Delta’s rewards, termed “Medallion Qualifying Dollars” (MQDs), can now be earned on spending via Delta cards on hotel bookings, car rentals, and vacation packages. The shift comes with the booming demand for post-pandemic travel. Delta also seeks to make the rewards system more comparable with those offered by rival airlines. Earlier this year, American Airlines (NASDAQ:AAL) changed its reward structure and increased the criteria for earning loyalty points.
Details of the Revised Rewards Program
The new reward system will be applicable beginning in 2024 for 2025 flying. As per the revised spending terms, Delta’s customers can earn the Silver Medallion status by earning $6,000 MQDs, Gold Medallion by earning $12,000 MQDs, Platinum Medallion by making $18,000 MQDs, and Diamond Medallion by earning $35,000 MQDs.
Delta is completely doing away with its Medallion Qualifying Miles (MQMs) and Medallion Qualifying Segments (MQSs) rewards. Starting in 2024, MQDs will become the only criterion to earn Delta’s elite status.
Furthermore, Delta is changing the policy for entry to Sky Club airport lounges. The airline will restrict some credit card holders from lounge access to ease the crowding. Steps such as limiting the number of times a flyer can access the lounge and spending more dollars to gain unlimited access to lounges are being implemented. Meanwhile, rewards earned in 2023 will be eligible for conversion into redeemable miles, MQDs, or a combination of both.
Is DAL Stock a Buy?
On TipRanks, eight Top Analysts have recently rated DAL stock a Buy. Top Wall Street analysts are those awarded higher stars by the TipRanks Star Ranking System. This is based on an analyst’s success rate, average return per rating, and statistical significance (number of ratings).
Delta commands a Strong Buy consensus rating based on these top analysts’ views. The average Delta Air Lines price target of $59.13 implies 49.5% upside potential from current levels. Meanwhile, DAL stock has gained 21.5% year-to-date.
