At the Rotary Club of Atlanta Delta Air Lines CEO Ed Bastian admitted that the carrier went too far with SkyMiles changes and they will make modifications after a consumer backlash.
Bastian, though, doesn’t say the changes were a mistake just that they were made too quickly instead of implementing them one cut at a time,
Our team wanted to kind of rip the Band-Aid off and didn’t want to keep having to go through this every year with changes and nickel and diming..I think we moved too fast.
Arguing that a lack of upgrades at the airline is due to a doubling in the number of Diamond members since the pandemic, rather than monetizing more seats in front cabins than ever before, he suggests that limits on entry into Sky Club and making elite tiers unattainable by most was necessary to deliver on customer expectations.
- Bastian is also probably wrong when he says that the number of Diamonds has doubled
- That was likely outdated information – year old facts from when Delta was still extending everyone’s pre-pandemic status and adding on new elites
- And they had made Diamond (and other elite tiers) easier to earn by counting award travel towards status for the first time
Delta will announce “modifications” in the coming weeks. He is clear that the announced direction is where the airline is going, and has wanted to go. It sounds like they’ll slow things down a bit, hoping not to bleed customers and get members more used to the changes before going farther in the future. Bastian won’t admit that what they tried to do was a bad idea – he’s just suggesting they failed to ease customers into it.
Bastian has previously said that the changes to elite status and lounge access are not the end of what members can expect (“over the next several years we’ll announce additional changes to qualification and to how a mile is awarded”). And, of course, even after those changes were announced they quietly devalued SkyMiles further by raising the price of Mexico-originating awards (one of the best values that had remained in the program for use of miles). Mileage devaluations continue even as they talk about “modifications” to status and lounge access changes they’ve recently announced.
@ Gary — The good news here is that this should stop UA and/or AA from making huge increases next year. That will make it easier to jump ship, while having more benefits from Delta while doing so. Just as Bastian confirmed that they are sticking to their end goal, lots of people headed out the door will be sticking to theirs as well. This will just delay the inevitable.
Hilarious. Not admitting to a colossal mistake based on meaningless focus groups comprised almost exclusively of the top 10% of Diamonds, Delta will now make “modifications”.
Bastain and Delta should simply confess that they enrolled millions of new elite AMEX cardholders during the pandemic without adding significant capacity. Sounds much better than the original narrative (which wasn’t remotely credible).
I called this one last week. Where is Tim Dunn?
Pardon my language, but DL and Ed can go shove it. They’ve already shown their cards; anyone will be a fool to trust them now.
Look, they have already shown us where they want to go, so now they will just boil the frog more slowly. You are a fool if you hang on. As they say, “Forewarned is forearmed.” BTW, I just flew SQ JFK to SIN in Biz Class for half the price DL wanted. The food and service were so much better than DL, and the seat was much wider and more comfortable — and they actually come and turn it into bed for you.
@Captain Freedom – Nailed it – they self inflicted by promoting these cards and earning to new members with sign up bonuses, extending rollovers when they didn’t have the capacity .
Now, they’re joining the legacy of Atlanta business history with their own “New Coke” moment
Gary – remember I said there were too many elites, and you disagreed? Even if Bastain’s numbers are off (and I’m not sure they are), it has been obvious that the number of Delta elites exploded during the pandemic (more due to rollover than status extensions), and it is obvious SkyClub eligible passengers also exploded (due to aggressive Amex Platinum and Delta Reserve signups). Delta does have a legit issue – they need to expand capacity, reduce eligible customers, or some combination of both.
whether there are too many skyclub-eligible pax is an entirely different discussion than whether there are too many elites
@Tim Dunn I’m interested in hearing your take on this. If I recall, yesterday you insisted that other airlines would fall in line with DL’s changes. While I didn’t agree with you, I do respect your willingness to have a POV. 🙂
I sure hope they don’t reverse the Sky Club changes. Or they at least open more Delta One clubs to keep the Golden Corral crowd and check.
This was a colossal mistake by Delta and now they trying to back track without admitting they were wrong to do this and the Delta shares shows this – going down because they is no faith in Delta Airlines anymore.
Don’t trust Delta. Book away and find another loyalty program.
Tony – i see your point… But they are the same issue of scare resources. Delta promotes a “premium” experience to all guests. Whether the front end of a plane, fast security lines, or a SkyClub, Bastain believes he has scarce assets that need to be allocated among a large group of customers. Due to somewhat unrelated reasons, Delta has inflated the number of people eligible for all of these assets.
H2oman – I kind of think they have to revisit Delta Reserve club access. 10 visits is too few for that card
Agree with others. They showed their cards. Too late… even if they slow down the implementation, the intent and strategy isn’t changing.
If James, Bastien and others leave, maybe there’s a chance for someone new to come with strong customer focus! Why can’t we get execs like Emirates or Singapore..? And please don’t tell me those companies are subsidized by their govt! Delta has strong lobby and they too did receive govt bailouts.
Of 5 Amex plats, I’ve axed 3. I’ll hold 2 for the announcement. If I only get a few times in SkyClub the. I’ll axe those as well.
Delta: Sorry. Oh, we’re sorry that we were called out for being pieces of s#!t, not that we screwed over loyal customers.
I’m so happy I ditched Delta when they were repeatedly screwing over loyalists during the pandemic. Oh, and while ol’ Ed is saying this Delta pulled yet another devaluation on awards to and from Mexico.
Delta was right to make their proposed changes – there’s just too many elites such that it’s no longer elite, and the accompanying benefits are trashy. I think it is far better for most people to find that elite status is unattainable, so that they can stop chasing it. Let the rich folks have their silly, special statuses that come with those silly little benefits that are like getting a $10 poker chip from the casino after losing $10,000 on their blackjack table. Let us, mere mortals, march forward to freedom from chasing status, freedom from loyalty to a corporation that would trade your life for a $1 profit, and freedom from spending our hard earned money on worthless airline cards that give you worthless points.
DL has blinked because the latest changes were so bad they incited a revolt that is threatening to hit company where it would hurt most: its vaunted reputation as the most profitable airline. However, it is quite telling about how arrogant and a cocky DL Corporate had gotten that they did not realize they were going way too far. The boardroom must have been filled with Tim Dunn’s for the consequences of the seismic changes they were about to unleash to have escaped them. The resulting hubris bit just them in the arse.
The “blink” is a clear sign that DL now understands that it is not invincible and that the customer is ultimately the driver of business profit. Importantly, it is a cue and call to arms to SkyMiles members to keep the pressure on until DL agrees to restore some decency to its “loyalty” program, which became a one-way street through which the airline earned billions from its loyal members while giving nothing in return.
Hubris was a winning economic policy until it suddenly stopped being one…
I gave up on Delta about five years ago, not planning to return.
Screw them. This is analogous to someone who dumps his wife of 25 years and then when his fling leaves comes running back to his wife. Unless they stop selling “74% of first class” and fix the GUC I am done forever. Besides every year their miles are worth less and less.
@Anthony
I’m sure there some middle ground with the club access but something has to be done. My wife and I tried to visit B concourse at ATL recently. It was overrun. We found an empty gate and relaxed before our next flight.
What @Gene said. 100%.
Delta is a for-profit business; I have repeatedly said that. They are not going to do anything that would stand in the way of their increased revenues and profits.
They aren’t isolated from negative customer feedback but that doesn’t mean they are going back to where they were before. It just means they will MODIFY what they intended to and roll it out over a slower period of time. Anyone that believes they aren’t going to the same place, even if at a slower pace, is naive.
and, no, this doesn’t reduce the willingness of AA or UA to make changes. DL’s action showed what they are willing to do and AA and UA will go along at the same pace but will get their as well, relative to their own network and ability to command premium revenue.
there is nothing contradictory in what I said in this post that is different from what I have said all along.
@H2oman: Didn’t bother to try one of the other EIGHT SC’s in Atlanta did ya?
While I scuffle a bit over the overcrowding…it is not the Golden Corral crowd…it is the Amex Plat crowd. But, there are other clubs in ATL. There are approx. 50ish SC’s in the network and the overcrowding issue only applies to about 5 of them.
Their creative team is frantically working on copy for the new brochure where the take-aways will be repackaged as “special customer benefits” so nothing has to really change – except for perception.
Key weasel-word is “some”!
@ Tim — “and, no, this doesn’t reduce the willingness of AA or UA to make changes.” BS, of course it does. They aren’t as stupid as Delta.
“Delta is a for-profit business; I have repeatedly said that. ” That’s why I come here, for profound wisdom such this.
@ David — Indeed, he has reapetedly said THAT. Ctrl-v from other posts here, there and everywhere…
What would we do without the eminent wisdom of Tim? “Delta is a for profit business” indeed. Could his head get any farther up their butts?
In defense of @ Tim, many commenters on this and other travel blogs genuinely don’t seems to realize that Delta and the other airlines are in fact businesses, who have no human attributes, like loyalty. There’s no need for hurt feelings of betrayal. Please don’t fly any specific airline, or patronize any other business or their associated wares (like credit cards), unless they meet your specific needs and meet them better than other competing businesses.
@ Jake — Well said.
@TravelWarr
That flight I wasn’t going to terminal hop hoping for a lighter crowd. I did hit F a couple of times and the upper level had decent seating. The only club I’ve visited that felt like a premium club was the new one at HND. And sorry but when you’re standing in line behind 6 kids ordering Shirley Temples while somebody is emptying the chip stand in their purse the bar it does have the Golden Corral feel.
Delta just showed their cards too early. The rest of the industry is going to do the same thing. Time to stop worrying about “free” benefits (lounges, upgrades, etc) and time to just pay cash. Look for the best price / best product and just pay.
I completely agree with Gary’s article saying that chasing status just isn’t worth it anymore. Not just for Delta, but for any of them. Except perhaps WN — their frequent flyer status (free Early Bird, companion tix, etc) are pretty good and have decent value.
I for one was willing to irrationally spend to keep status with multiple airlines. E.g. I would pay twice the price for a flight on Delta vs. a competitor. No more. Will bank my cash and spend it on first class, better seats, food in the terminal etc.
Delta should have stuck to their guns. The customers most mad about the changes are the least profitable to Delta, if they’re profitable at all.
Although it’s probably not a good sign if you can’t make money off a customer unless they charge $350k to your credit card…
So, it’s not sorry we screwed you over, just sorry we didn’t do it slower.
We have seen the future and promising to temporally undue some doesn’t cut it.
Lol! Well well… I’m surprised it’s taken so many people so long for the blinders to drop. Suddenly DL can’t be trusted…
In 2010, at the beginning of the legendary “mejor en su clase” SM era that has just reached its apogee with this implosion, DL trialed the dynamic redemption logic for the first time. Do you remember…PHL FCO? 635k!! A number that was overnight almost 10 times the prevailing price and that was underwritten by no consumer-visible logic. While some claimed, so what, it was clear from this backend shenanigan what their plans were.
In case it wasn’t evident…lol…I didn’t trust DL SM then and I’m very glad I jumped immediately and went full hog on UA. I’ve spent the last 13 years accumulating on UA where lifetime status has – for the moment – real meaning. I will reach 2MM on UA before they have time to devalue. I still have my 1MM FO on DL but I haven’t flown revenue on DL since 2010 except for the notorious BUD J mistake fare of which I bought several and ended up reissuing almost all sectors on AF during the covid and post-covid extension era. And my Hartmann rollaboard 1MM DL gift still serves…in the UA and AA overheads… so by judicious consumer habits, I win!
Now it’s like a soccer chant…
PHL!
FCO!
PHL!
FCO!
etc
lol
I earned my million miler 1 status by paying for it myself. No big business, no expense accounts, just me. I plan to get through 2024 with my platinum status earned through pretty much all domestic trips for work. I’ll keep my delta reserve card through 2024. But come 2025, I’m just gonna switch to American. 30 years down the drain with with an oh so loyal company…oh by the way, Bastian’s dissembling is just hilarious-at a Rotary Club no less! Just one road warrior soon to be exiting the Delta daycare skyclub scene as soon as possible. The skyclub should be for business travelers, not shrieking brats running around the aisles!
@Christopher Raehl – “The customers most mad about the changes are the least profitable to Delta, if they’re profitable at all.”
If Delta is losing money on $20,000 ticket spend customers who hold premium co-brand cards, but who aren’t also spending $150,000 a year on those cards, then they have something a whole lot more fundamentally wrong with their business model than what’s being discussed here.
(Hint: those customers are not unprofitable.)
Had to figure this was coming once the Wall Street Journal started writing unflattering articles about the Delta and Amex changes.
Moved the subject out of bush-league points-and-miles blogs into the major leagues of newspapers; I think even the New York Times had an article or two about the changes as well.
The walkback looks contrived to me.
@cairns:
‘What would we do without the eminent wisdom of Tim? “Delta is a for profit business” indeed’
No Tim Dunn fan but he’s absolutely right and from what I’ve read on this and a few other blogs, there’s an awful lot of people who need to be reminded of this. All this repetitive blather about ‘xx number of years of loyalty down the drain’, ‘throwing their best customers under the bus’, etc. ad-nauseum make me tired.
All one needs to remember are Edward, Lord Thurlow’s words:
‘Corporations have neither bodies to be punished, nor souls to be condemned, they therefore do as they like’
And corporations like profits and will do pretty much anything to get them, customer loyalty be damned.
LOL. Mr. Dunn: It is tough to carry a tune after having just eaten crow. You may be singing the same song, but it is definitely out of tune. 🙂
In the same post where you stated the above, you continued gaslighting, as if oblivious to the huge significance of DL sounding the retreat:
TD: Delta is a for-profit business; I have repeatedly said that. >/b>
You have said so repeatedly but did not have to because (a) it was self-evident, (b) no one doubted it, (c) other airlines are in the same boat, and, importantly, (d) the statement always beside the point. No one begrudged DL their financial success that you kept touting. The beef was that they were profiting by giving less and less to those whose “loyalty” they were parlaying into huge profits. See the difference? That is why your “profit ist alles” arguments were always and remain dissonant.
TD: They [DL] are not going to do anything that would stand in the way of their increased revenues and profits.
Except that that’s exactly what they just tried to do, confident that they would again get away with it but …tee-hee, surprise! For them to backtrack as quickly as they did means that the rate at which people were cancelling their credit cards or stopped using them was so brisk it registered almost immediately !
TD:They aren’t isolated from negative customer feedback but that doesn’t mean they are going back to where they were before.
LOL. First, you definitely do not know how far back DL will backtrack. Second, until now, DL did believe they were isolated from negative customer feedback, which is what made them so cocky that they tried a move that anyone with an ounce of common would have known would be a “bridge too far”. Heck, I boldly and repeatedly predicted that there would for sure be a backlash this time!
And also here:
For DL, success bred hubris, arrogance, cockiness and, as a result, Bastian just got forced to eat crow.
@Michael:
‘The walkback looks contrived to me.’
I think you’re giving Delta management way too much credit.
Subtlety and long-term thinking are things in very short supply in the top ranks of management at U.S. companies. One quarter, maybe two is as far ahead as these folks can see.
@Gary — Please stop “moderating” my every commenton. I posted a comment in response to this post yesterday at 5:14pm and did not appear until this morning. It is tough for people to participate in discussions “live” if their every comment gets held in moderation for hours.
After a decade of posting here, I will not suddenly “go rogue” and post out of character. There is no need keep “moderating” my comments!!!
OK, you got me. I’ll give a little back as I clearly won’t get away with it this time. Now, the next time you aren’t looking, I’m gonna hit you harder than this! You’ll think that you went to 7 foot tall proctologist when I’m done with your SkyMiles account! LOL! But not until the dust settles for a while from this one. I’ll be back….
Sincerely,
Ed Bastian
Gary, can you write an article urging flyers and authorities to increase competition in the airline industry by requiring a cap on the number of gates an airline can have at a major airport? This will ensure that there are at least 2-3 competitive airlines in Atlanta, Detroit, etc.
People are missing the story which is that Delta tried to ruin airline loyalty not just for their customers, but all customers. The truth is Delta was hoping AA and UA would match their drastic changes. Delta is only pivoting now that it is clear AA and UA were not going to follow, and they were going to lose customers. This is a revealing peer behind the curtain of Delta loyalty leadership and their intended future of the program.
Personally, after this I will not fly DL again unless it’s free or I have no other choice.
Missing from the blatant devaluations is the devaluation of maintaining a penny or 1.1 penny per point. As inflation and profiteering jack up airfares, the value of a point relative to travel declines dramatically. This is not just the massive increases in miles for international and partner travel, but also for domestic travel as the miles requirements track the cost of the airfare via “dynamic pricing.” BTW, this backtracking was completely predictable — make outrageous changes and then walk them back a bit to merely ridiculous. Increase skyclub visits to 10 and 15? Reduce diamond spend to $30,000? The latter is only a 100% increase in two years. I don’t think inflation has been that high, has it? No backtracking will address or compensate for the deterioration in the Delta product — reliability of flights and bizarre new plane decisions like putting a bathroom right behind first class and next to comfort plus on the A321neo. I was ready to stop pursuing Delta status because of deterioration of the product, the changes, even once “back tracked” made that decision a no-brainer.
In engineering we frequently find people fixing the symptom only, and sometimes not even the right problem. Delta is now a case study; their core problem was too many people with Sky Club access, and possibly too many Diamonds (in their key hubs).
Fixing the Sky Club problem should have been straight forward, make the outlined changes to the AMEX card holder access. That doesn’t put off their high volume (Silver and Gold) travelers.
Raising the MQD bar for status was not the issue, the moves were not all that large; but punishing those that take weekly or biweekly short trips by removing miles flown / segments flown as a factor is what pissed many of us off. It’s been forever since a Silver / Gold medallion would reasonably expect an upgrade to first class, but the actual perks of free / preferred seats and SkyPriority are the things that make travel with Delta easier. Losing that because you can’t spend $350k a year on an AMEX was the pivot. Who fills the seats on most of Delta’s domestic routes, not Diamonds and not Amex card holders, but fare paying corp customers, and these were the customers left out in the cold with these changes.
As Tim Dunn notes, Delta is a for profit entity, and that profit is tipped higher by Diamond Medallions, but built with Silver and Gold Medallion travelers