Manufacturing Delta Diamond, retrospective

A few years ago Delta introduced an excellent new choice benefit for top tier Diamond members: 4 Global Upgrade Certificates that can be applied to almost any economy fare in order to upgrade to business class.  I first wrote about this benefit in the post “Why Delta’s great new Choice Benefits irk me.”  My problem at that time was that I had previously developed a solid plan for alternating years manufacturing Platinum status for my wife and I through credit card spend.  By timing the spend just so, it would be possible to keep both of us at Platinum status almost all of the time.

Now, though, I wanted to get my wife to Diamond status.  She flies regularly to Europe for work and would benefit greatly from those upgrade certificates.

Delta Diamond

Platinum status requires 75,000 MQMs (Medallion Qualifying Miles) per year, whereas Diamond status requires 125,000 MQMs.  That’s a huge difference.  Before Global Upgrade Certificates, I didn’t believe that the difference in benefits justified striving for Diamond status.  The new benefit changed my mind.

So, I threw out the old plan and set about manufacturing Diamond status for my wife, and Platinum status for me, every year.

How is this possible?

For an overview of how it’s possible to manufacture Delta elite status through credit card spend, please see: How to manufacture Delta elite status.

What does it cost and what do we get?

Most manufactured spend options have fees involved (gift card fees, bill processing fees, etc.).  In my case, I don’t mind paying higher fees if it keeps my life simple.  For example, I’ll happily pay 1.87% for the privilege of using my credit card to pay federal taxes.

For the sake of argument, let’s assume that I average 2% in fees.  In reality, I average much less, but after factoring in my time and any driving required, that estimate might not be not too far off.

Platinum Status Cost

Platinum status requires 75K MQMs per year.  Let’s assume, though, that I fly at least 25K MQMs per year so that I only have to manufacture 50K MQMs for myself.  In that case, I need to do the following:

  • Delta Reserve Card: Spend $60K, get 30K MQMs (+ 90K redeemable miles)
  • Delta Platinum Card: Spend $50K, get 20K MQMs (+ 70K redeemable miles)
  • Total: Spend $110K, get 50K MQMs (+ 160K redeemable miles)

So, I need to spend a total of $110K on my Delta cards in order to keep myself at Platinum status.  If we assume that my manufactured spend costs are 2%, then we can say that it costs $2,200 to keep Platinum status.  That seems like a lot, but remember that I also earn a total of 160,000 redeemable miles from that spend.  Even if I used those miles at 1 cent a piece to pay for flights (which is different from redeeming for awards), I would get $1,600 in flights from those miles.  In reality, I’ve received far better value to-date.

Diamond Status Cost:

Diamond status requires 125K MQMs per year.  Let’s assume that my wife flies at least 25K MQMs per year so that I only have to manufacture 100K MQMs for her.  In that case, I need to manufacture exactly double the amount required for Platinum, above.  In other words, at 2%, it costs $4,400 to manufacture the 100K MQMs needed to get my wife to Diamond status.  In return, we earn 320,000 redeemable miles.

One way to look at this is that, based on the above calculations, we buy Delta miles for 1.375 cents each, and we’re granted high level elite status as a bonus for buying so many miles.

Credit card annual fees:

I purposely didn’t include the credit card annual fees in the above calculations.  Each Reserve card has a $450 annual fee and each Platinum card has a $195 fee.  The Platinum card offers a domestic economy companion certificate each year, and the Reserve card offers a domestic first class companion certificate each year (along with SkyClub access and other benefits).  Depending upon how the companion certificates are used, they can fully or partially make up for the cards’ annual fees.

I’ve loved using these certificates for times when award prices and paid prices are very high.  I especially have loved using the Reserve card companion tickets in cases where economy ticket prices are very high and first class tickets are only marginally higher.  In those cases, it’s great to be able to book two of us into first class for the price of one.

Recently, though, I’ve struggled to use the certificates.  They are limited to certain fare classes and while that hasn’t been a problem for me in the past, I seem to have encountered several situations recently where those fare classes weren’t available.  I think it’s too soon to declare this a trend, but if it continues I’ll have to rethink the value I assign to these certificates.

Is manufacturing Diamond and Platinum worth the cost and effort?

Each year, my wife has been able to successfully redeem her global upgrade certificates for lie flat business class seats.  This year, she has already used all four certificates for two trips.  For the first trip, both the outbound upgrade and the return upgrade were waitlisted.  That is, they didn’t clear at the time of booking.  However, about two weeks later, both upgrades cleared.  For the second trip, both upgrades cleared at booking.

Regional Upgrade Certificates (available to both Platinums and Diamonds) have been valuable too.  They were hit or miss in the beginning, but my recent experience has been better.  Even though they don’t always work to get me into first class, my (and my wife’s) success rate has been pretty good this year.  And, when the certificates haven’t cleared, they have reliably moved me to the top of the upgrade list for upgrades that clear at the gate.

Our earned miles have proven to be valuable too.  My son and I tend to accompany my wife on at least one European trip each year.  For the two of us, I like to use miles to book directly into business class whenever possible.  Normally, the cheapest Delta rate for round trip business class to Europe is 125,000 miles.  For an upcoming summer trip, though, we were able to cancel our 125K awards (for free, thanks to my status) and rebook for 105K thanks to a Delta award sale.  That particular flight would have cost $1,557 in economy or $5,372 in business class.  Compared to the business class fare, we got 5.1 cents per mile value from our miles.  Even compared to the economy price, the value comes to 1.48 cents per mile, which isn’t bad.

Closer to home, we often use miles to book domestic flights.  I don’t know if I’ve just been very lucky, but I’ve frequently found saver level fares for the exact flights I’ve wanted.  For these flights the per mile value I’ve observed is usually around 1.5 cents, which is much less than the value we get from international business class.  However, as I’ve written many times in the past, I highly value the fact that these award flights are fully refundable until 72 hours before the flight due to our high level elite status.  I frequently book awards just in case we want to use them.  If we decide not to use the awards, that’s no problem – we just cancel and get our miles back.

Definitely not for everyone

My wife and I have been very happy with the value we’ve received from manufacturing our way to high level Delta elite status.  That said, our unique circumstances have a lot to do with that.  For example:

  • We live near a Delta hub and fly Delta often.
  • My wife’s job has her flying to Europe twice a year, but they only cover economy fares.
  • We highly value the added comfort of lie-flat business class over economy.
  • Due to our travel style (and our location near a Delta hub), we’ve been able to get excellent value from our redeemable miles.
  • We highly value the ability to change and cancel awards for free.
  • We highly value the Delta Reserve card’s domestic first class companion certificates (when we’ve been able to use them).

If you don’t fit a similar profile, it’s very likely that doing this is not for you.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

More articles by Greg The Frequent Miler »

Pingbacks

  1. […] Manufacturing Delta status is expensive: It requires paying large credit card annual fees, and putting a huge amount of spend on Delta credit cards.  The rewards can be great, but only if you use them.  Personally, I’ve found that the rewards have exceeded the costs, but my situation may not match yours.  For full coverage of this question, I highly recommend reading this post: Manufacturing Delta Diamond, retrospective. […]

Comments

  1. This is a very good analysis, but you are fooling yourself and/or your audience if you use prices like “$1,557 in economy” to Europe. I personally can’t imagine paying anything more than $1000 (especially now) and that’s with much less planning than trying to use Delta skypesos. If you are not careful you’ll end up like the Points Guy with his outrageous valuations.

    If you are a last minute frequent business flyer then yes, this is a great plan, and your analysis//trick is spot on! I would love to know how you could still manufacture such a large spending without putting in a lot of personal time.

    • I have multiple trips to Europe in the next 3 months and none of my economy fares are close to 1,000. They are generally closer to 2,000. Good for you if you get cheaper rate but not a misrepresentation by FM.

      • All I am saying is that, if you are playing this game there is no way you are going to end up paying over $1000 for eco fares if you have time to plan your trip. I would argue that the planning to get these fares takes far less effort than using Skypesos.

        May I ask, where are you travelling for $2000 eco fares in the next 3 months? It may be too late to get the best fares to Europe in the summer but doing just a quick 1 minute search with google flights I get a lot of fares under $1000. Once you are in Europe, most RT flights are under $200.

        And I am not even talking about Flight Deals or any other travel hacking. You could get most business class fares to Europe close to $2000 or under if you are lucky once in a blue moon.

        Of course, if you are not flexible and you have to travel to certain cities on certain days, then yes you may end up paying a whole lot more, but ask yourself: how lucky do I need to be to score an award ticket to my destination when there is sufficient demand to warrant a $2000 RT to Europe?

    • I completely agree with you that if I was comparing, in general, Delta award prices to flight prices, I would use more reasonable prices in the comparison. In this case, there was nothing hypothetical about it. Our travel options are constrained to particular dates, and we highly value non-stop over multi-stop itineraries. For the dates available to us, our current choices were $1557 for Delta non-stop or $1507 for 2-stop itineraries. Yes, we probably could have cobbled together cheaper flights via Wow Air, or whatever (with several stops), but that’s simply not something I’m willing to do when traveling with my family.

      • Yeah agreed, Detroit non-stop to Europe is hard on your wallet. I have been doing this for 20 years now also with family (out of Chicago) and when it comes to cash price even if you can save $250 per person on a ticket with a stop, for a family of 4 that’s $1000 savings.

        So again, I generally agree with (and admire) what you are doing, just not necessarily with the valuation. Ticket prices has gotten so low lately that I am really wondering if I should spend cash and try to save my miles. Especially now when my average acquisition cost are getting closer and closer to a cent/mile.

        The real deal for me is business redemptions which otherwise would be really out of reach for a family like mine.

  2. My understanding is that this situation is a solid strategy for you, but might not translate to the bulk of your readers (Since you’re near a Delta hub, your work is helping you generate MQM’s and your personal evaluation of Delta point values and the value of a business class seat)

    However, wouldn’t it make more sense for you your average reading to do the same MS on two Amex Old Blue’s? (Which offers 5% cash back at U.S. supermarkets, U.S. gas stations & select U.S. drugstores up to 50k annually) Here is the math as I see it with your 2% cost parameters:

    Spent 100k at 3% cash back (5% earned through card minus 2% MS cost) = 3,000 cash. Plus 1,095 saved in annual fees.

    While this plan doesn’t give the glamour of Delta Status it does give someone a lot more flexibility without locking them into Delta and Skyteam redemptions. Plus as an example, secretflyer has posted 2 deals in the last two weeks for business class fair to Europe for less then 1500. The execution of this plan would, of course, be more complicated than outlined, but every plan is. Also I new-ish to this hobby and there is probably some things that I’m missing with this analysis. Any thoughts on this?

    • Yes, definitely! Most people would be better off earning 5% cash back as you described, and earning miles primarily through big credit card signup bonuses.

      In fact, just this past weekend at Frequent Traveler University’s MS workshop I discussed what I do with Delta cards and specifically pointed out that it makes much better financial sense to manufacture cash at 5%. I may do a follow up post with more information about that.

  3. How are you MS 100k MQMs a year? Don’t the Reserve and the Platinum cards top out at 30k MQMs and 20k MQMs, respectively, for a total of 50k MQMs? Where are the other 50k MQMs coming from?

  4. I am utterly disillusioned with DM status. Currently, I am 0 for 6 on systemwide upgrade certificates, and in my completely informal polling of the boarding area on my international flights, I get figures much closer to 15-20% success (maybe 5% at time of booking) among other DMs, including MMs with the Reserve card. I’m also 50% on domestic complimentary upgrades, which is lower than 2-3 years ago when I was GM. I’m not even in a Delta hub. I can’t help wonder if Delta knows who the influential bloggers and their family members are. It’s been a total bummer and I feel like an idiot for booking 120k with Delta this year instead of status matching and getting the heck away from them.

    • I’m surprised that your success rate has been so poor with global upgrades. When I last looked at the Flyertalk thread on this topic it seemed as if success rate was very high. The route may be key: some routes may be much harder than others. All of my wife’s global upgrades were US – Europe.

  5. Very nice sharing, thank you very much.
    I have been a Platinum for a while. However I’ve always selected miles as my Choice benefit. My main concern about upgrade certificates (both regional and global) is that for Delta, there’s no way to locate upgrade availability ahead of time. For UA, you can check for R on the website, for AA, you can use ExpertFlyers. But DL neither provide such options natively nor allow 3rd party to query their inventory. The makes purchasing ticket and applying upgrade in a very big uncertainty. I’m wondering:
    – How’s your thought on this (locating availability).
    – How’s your upgrade experience so far? Like, have you been able to clear upgrade right away, or clear after waitlisted but before travel, or on-the-day of travel? Would, say, a general member on Regional Upgrade have higher rank than a Diamond Medallion on complimentary upgrade?

    • I don’t know of any way to find upgrade availability in advance other than calling to ask.

      Our Global Upgrade success rate has been:
      Confirmed at booking: about 35%
      Waitlisted then confirmed at least a few weeks prior to flight: 100%

      With regional upgrades:
      Very few (maybe 20%?) confirmed at booking
      Few (40% maybe?) of those waitlisted confirmed before 3 or 5 day medallion upgrade window

      Looks grim right? Except: when wait-listing regional upgrades, I always* get put at the top of the complementary upgrade queue ahead of Diamond members. Of course, if Diamond members use their regional upgrades at the same time, they should get ahead of me (as Platinum). My success in getting upgraded at the gate has been very high (thanks to be #1 on the list).

      * early on there was a hiccup or 2 where I or my wife wasn’t put at the top of the list despite waitlisting a regional upgrade. That hasn’t happened to us for a while though so it might be fixed (or we might be lucky)

  6. I was wondering, is the first class companion ticket with the Delta Reserve card still a benefit for new cardholders? I looked at the card perks yesterday and did not see that listed as one. Is this a grandfathered benefit for older cardholders?

    • Yes, I just browsed to the Delta Reserve landing page (I had to put my browser in Incognito mode first) and found this right up front:

      Companion Certificate*
      The world is big enough to share.
      Enjoy a Domestic First or Main Cabin round-trip companion certificate each year upon renewal of your Card.*

  7. Very nice article.

    What I really want to know is how you manufactured that many miles. Gift cards, house payment, etc.

    Let us know how you mfg. that many miles.

  8. I am surprised that you do well in a hub. My observation, from my many diamond friends is that your only chance of an upgrade out of ATL is to be diamond with a reserve card using a certificate on a Saturday night. And be lucky.
    I know that as a lowly silver flying out of ATL at any time, the highest I’ve ever been on the upgrade list is 28th! I’m usually thirty something.
    But I am happy for you and your wife.

    • One thing that may be in our favor is that we don’t usually fly at the times that most business-people fly. For example, I prefer flying between, say 10am and 3pm, whereas those flying for business often take the early morning or late afternoon flights.

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