Delta’s Earnings Call Claims That Were Only True “From a Certain Point of View”

In Return of the Jedi Luke Skywalker asks the ghost of Obi Wan Kenobi why he claimed Luke’s father was dead — when at the end of Empire Luke learned that Darth Vader was his father.

Luke: Ben! Why didn’t you tell me? You told me that Darth Vader betrayed and murdered my father.

Obi-Wan: Your father… was seduced by the Dark Side of the Force. He ceased to be the Jedi Anakin Skywalker and “became” the Sith Darth Vader. When that happened, the good man who was your father was destroyed. So, what I told you was true… from a certain point of view.

Luke: A certain point of view?

Obi-Wan: Luke, you’re going to find that many of the truths we cling to depend greatly on our own point of view.

Delta executives, it seems, spent too much time watching Star Wars films as kids and wanted to be Obi Wan Kenobi using the Jedi Mind Trick on customers.

They claimed to be named a “Best Travel Rewards program by U.S. News for 2017-2018” with the ‘a’ and an asterisk in the full press release doing a tremendous amount of work, since the survey they’re highlighting ranked them behind Alaska Airlines but their fine print claims they’re really only comparing themselves to American and United.

In Delta’s earnings call last week they repeated the claim that US News ranks them best global airline frequent flyer program without the asterisk explaining that they’re making up their own category, that this wasn’t how US News ranked programs, and that the survey said Alaska Airlines Mileage Plan was better. (And indeed Alaska’s Mileage Plan is a global program with partners that take you all over the world.)

We’re very proud of our SkyMiles team. SkyMiles is on pace for another record enrollment year and placed first among the U.S. global airlines in the U.S. News & World rankings are airline loyalty programs.

It’s not just SkyMiles where their fingers are crossed making claims of course. Claims that are at best as true as Darth Vader remains alive and ruling the galaxy.

In this upside down world Delta’s Executive Vice President Glen Hauenstein says “We believe we do have the best-in-class Basic Economy product.” And he says what he’s proud of is a product “that people don’t really want” once “they see what exactly it is.”

Let that sink in: Delta is proud to offer a product that’s so bad people don’t want it.

It’s true that Delta’s basic economy is better than United’s and American’s basic economy because they allow customers to bring carry on bags onboard when purchasing these fares. (It is also true that Delta’s basic economy is inferior to Southwest Airlines, jetBlue, and Alaska Airlines economy.)

And it’s also true that Delta plans to roll these fares out internationally — fares Hauenstein says people don’t want. Their strategy is to offer a product that is so bad customers don’t want to buy it. That is a broken business model.

Basic economy isn’t a lower fare. It’s the same low fares airlines were already offering, with new restrictions so that customers hate the product. And the hope is that if they hate the product enough they’ll spend more for something that isn’t as bad.

It’s a fare increase on customers willing and able to pay more, and a punished experience for those who will not or can not. Delta thinks this contributes to revenue but not nearly at the scale that United and American expect.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Question: who is going to want to fly Basic Economy on international routes? Anyone traveling across the pond will usually be taking at least one piece of checked luggage. So, those flying BE may pay a lower fare, a la Norwegian and WOW, but after adding the baggage fee on top, will the fare be less than or equal to Norwegian or WOW? If it is higher, then why not just fly E, or Norwegian or WOW?

  2. The obsession with DL is constantly amusing. If I owned a company I’d proclaim it to be the best at everything, why shouldn’t DL do the same? And if you’re that offended by it then at least quit spreading your venom to the rest of us.

    @kimmie – the point must be that they want a lower entry point for ticket sales so they can jack up the price that the majority of travelers will purchase. But then just grab the Skymiles AMEX card and you get your free bag…

  3. @robert Just because you are ok with lies and deception in business doesn’t mean everyone is. Delta constantly lies to its customers, far more than is “normal” for companies.

    We should be applauding Gary for calling them out on their lies so that we can make informed choices as consumers.

    Well done Gary.

  4. +1, James!
    My first thought when reading the piece was “so THAT’S where the GOP got the idea!” I’ve been blaming Karl Rove, when all along it was Obie Wan.

  5. I’ve got to say that Delta’s hope is that if they hate the product enough they’ll spend more for something that isn’t as bad worked for me.

    After looking at Delta’s site, and being shown a basic economy fare, I went elsewhere and purchased two Virgin American tickets.

    Great job Delta! Mission accomplished!

  6. Delta & these airline verbiages are so bad it’s comical, like conversion with 5 year-olds you have to grill them to see what they really was saying or hiding. these shameless race-to-bottom businessmen know what they want from customers and pretend they care about them by the way.

  7. @Robert — Just because you claim that you’re the best doesn’t mean you are. That said, I’d rather have you make the UNSUBSTANTIATED (and 100% false) claim that your widget is the greatest thing the world has ever seen than for you to claim “We are the Greatest!*”
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    *oh, yeah, except for that Mohammed Ali guy.

    You want to lie as a company, go ahead and lie. But be straight forward about it, rather than take a survey that says you weren’t No. 1, and then twist the results so that you say something the survey didn’t say. Yes, Delta is No. 1 among US airlines based in Atlanta, Georgia . . . but that wasn’t what the survey said, was it? #AlternativeFacts

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    @Gary — Thank you for pointing this $#|+ out. And I absolutely agree that Alaska is an airline that has global reach; I was able to fly my daughter and her boyfriend SFO-CDG on Air France, then MAD-SFO on American on AS miles . . .

  8. To quote Darrel Huff’s wonderful “How to Lie with Statistics”:

    “Almost anybody can claim to be first in something if he is not too particular what it is”

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