Delta Air Lines (DAL:NYE), a prominent American aviation company, is planning a significant overhaul of its loyalty rewards program, SkyMiles. This strategic move aims to improve the exclusivity of elite status and simplify access to premium airport lounges. Delta will also be expanding the ways in which customers can earn reward points but with some restrictions. These changes may affect American Express (AXP:NYE) co-branded cardholders who want to accumulate points and use Sky Club lounges. This article will examine how these changes could impact DAL Stock forecast.
Expanding Earning Opportunities:
Delta’s latest overhaul of its rewards program comes amid the resurgence of travel demand following the pandemic. The airline intends to align its rewards system more closely with those offered by rival carriers. Earlier this year, American Airlines (AAL:NSD) revised its reward structure, imposing stricter criteria for earning loyalty points.
Revised Rewards Program in Detail:
The revamped rewards program is slated to take effect in 2024, impacting 2025 travel. Under the new spending thresholds, customers can attain various Medallion statuses based on their Medallion Qualifying Dollars (MQDs) expenditure. Silver Medallion status can be achieved with $6,000 MQDs, Gold Medallion with $12,000 MQDs, Platinum Medallion with $18,000 MQDs, and the highest tier, Diamond Medallion, with $35,000 MQDs.
Notably, Delta is discontinuing the use of Medallion Qualifying Miles (MQMs) and Medallion Qualifying Segments (MQSs) as criteria for elite status, making MQDs the sole determinant starting in 2024.
Club Lounge Policy Changes:
Delta is also implementing changes in the policy governing access to its Sky Club airport lounges. In an effort to manage overcrowding, the airline will restrict lounge entry for select credit card holders. Measures to achieve this include limiting the number of visits to the lounge and introducing higher spending thresholds to gain unlimited access. Meanwhile, rewards earned in 2023 will remain eligible for conversion into redeemable miles, MQDs, or a combination.
DAL Stock Forecast: Is it a Buy?
The average analyst target price for Delta Air Lines Inc (DAL) over the next 12 months is estimated at USD 56.30. Furthermore, DAL stock holds an average analyst rating of Strong Buy.
Stock Target Advisor analysts have a slightly bullish outlook on the stock, with 9 positive signals and 6 negative signals. The recent close price was USD 40.69, with a -2.56% decline in the past week and a -7.88% decrease in the past month. However, over the last year, the stock has shown a significant increase of +28.20%.
Conclusion:
Delta Air Lines has updated their rewards program, which could affect their financial outlook and market position. Changes may make it harder to attain elite status and lounge access but align with post-pandemic travel expectations. DAL stock performance is being watched closely by investors.
