Presenting at the Wolfe Research conference on Tuesday, Delta Air Lines President Glen Hauenstein shared that traveler confidence is up because “people booking further out” than before. Instead of just making a last minute flight reservation, they’re willing to plan ahead, confident in the direction of the global pandemic.
People are buying more premium seats than they used to, they’re promising to change policies if necessary to ensure as many people have status going forward as did in 2019, and they plan to keep investing in club lounges because their clubs sell credit cards.
Here are 7 key points from Delta’s presentation:
- Leisure travel will be fully recovered starting next month. The airline is only earning half the revenue is did before the pandemic, largely because business travelers who pay more for tickets aren’t flying yet and because long haul international flying is limited (and those business class tickets are most expensive).
However they expect to fill around 85% of their seats in June (“mid-80s” load factor), with “domestic leisure [travel] 100% restored].”
- People are buying more premium seats for leisure trips than they used to. The performance of premium product revenue at Delta is better than domestic coach. Hauenstein says it’s “10 points ahead of main cabin” and concludes this validates their strategy of being the premium domestic carrier and earning repeat business.
That’s a bit of an odd claim – that people are buying up to premium products because they know how much quality Delta offers – when,
- Delta has been behind other carriers in inflight food and beverage service throughout the pandemic
- Right before Hauenstein spoke, American Airlines reported the same thing about their premium sales.
Presumably their attribution to people wanting more space than before as a result of the pandemic is a more reasonable explanation for the behavior that is consistent across carriers than that one carrier has greater quality than others.
- Delta has been behind other carriers in inflight food and beverage service throughout the pandemic
- Delta will open more lounges, because that’s part of their profitable credit card business. Delta operated 53 lounges Pre-Covid, and in June will again be operating 53, and will continue to expand lounges “since it drives co-brand credit card,” with a focus “on business cities,” looking to add “a handful” over the next 5-10 years.
- Will ensure there are as many SkyMiles elites next year as pre-pandemic. They believe that bonusing all travel 50% – 75% and counting award travel towards status “will get us to status levels roughly pre-pandemic” but if they aren’t tracking with that goal they “will adjust to make sure we make it easy to maintain” status and maintain the overall size of the elite program.
- They’re moderately concerned about U.S. inflation considering it a 5 on a scale of 1-10. They’ve seen the tight job market but so for not directly for airline employment, which are higher wage jobs. It’s currently for companies they do business with, “catering kitchens, wheelchair pushers, contracted jobs” that’s “not a huge chunk of total cost” at Delta.
In fact the airline has had trouble staffing call centers so even top elite customers wait hours on hold to speak to someone and they’re asking employees to volunteer to clean lounges for free since they can’t get contract cleaners.
I wonder if any consideration will be given to those outside of the US. Can’t fly Delta these days because the Canadian border is closed to non-essential travel. A lowly Silver, but would still like to maintain status somehow.
I bit. Finally using the American Express Companion first class Delta Reserve reward $1300 for two first class to Vegas in July. They were kind enough to extend it a year and have been working positively keeping my Platinum status. I’m not a fan of Bastian but thanks.
All that says is they will ensure people qualify for the lowest status even if they had Diamond.
“elite population” is not the same as elite at each tier
The longer OPM stays home, the longer we all have a chance at promos/extensions, and reduced rates in 2022 for 2023 qual, and thats on top of a more pleasant flying experience as true elites without those who fly for their corporate overlords and take up lounge and F space.
@ Gary — DL should make some serious reductions in the MDQ requirement, or a dramatic reduction in the AMEX MQD waiver, if they want to maintain the same number of Diamonds. The latter seems to be the way to go. If they lower $250k to $50k (perhaps for existing Diamonds only), they stand a good change of getting our credit card spend back. As things stand now, we will put <$500 each on our DL cards in 2021. Pre-COVID, we would have put $30,000+/each on these cards. Whatever Delta is going to do, they need to announce it sooner than later. If they delay to Q4, it will be too late for anything other than a full-fledged pass for another year.
All those promotions add up. I’ll be a first time United 1K with a total of $6750 of spend shortly. It would have been even less, but was only Gold last year.
Funny how no one ever talks about delta needing more diversity, equity, and inclusion in its elite ranks. We need to raise up those who don’t have the means to fly as much or spend as much money so they can be on a level upgrade list.
Some of us don’t have jobs that pay for our travel.
Airline elite programs need to follow in the footsteps of the Universities. They removed barriers to acceptance such as SAT scores, or criminal background checks. Airlines need to remove barriers to qualification, such as minimum flight mileage levels or spending levels, so everyone can have the equal opportunity to sit in first class.
Jerry, that is hilarious. LMFAO
It does appear that DL is focusing on the customer experience as driving revenue, while the other carriers are not, even if they are seeing more first class sales.
Travelling to the states last sunday on a delta flight from heathrow got to the airport was told I couldn’t join my flight no explanation why did delta let me train all a hundred odd miles before telling me no way I’m absolutly furious angie
What do you want, Jerry, a raffle? Fly more, get more. I’m all for diversity, but that has nothing to do with this. Take it up with businesses who don’t hire a diverse crowd for those positions. Delta rewards those who actually stick their butts in the seats and spend money with them. They don’t care what you look like if you shell out the cash or gain the status. You want in that club? Find the jobs that do those things.
Jerry you want to be eligible for a upgrade on the same level as someone spending $15,000 a year on flying while ur spending $2,000? I’d like to be considered for that July vacation instead of the guy with 30 years service. Good luck!