At the start of the summer, we learned that there’s a project to develop an even more premium Delta American Express card than the current $650 annual fee Reserve product. This was teased last November at their Investor Day, and shared by a Delta tipster in June.
- We know that the ultra-premium cards in the market are now pushing even higher annual fees. And high annual fees make it possible to pay for bigger perks.
- Delta has restricted the value of Reserve, limiting the number of lounge visits cardholders can have.
- They can always offer more qualfiying miles, and with SkyMiles worth so little bonus miles for more premium cards are possible too. Plus the industry has moved to a coupon book model, where brands give credits to card customers in exchange for marketing access.
At the Morgan Stanley Laguna Conference on Thursday, Delta President Glen Hauenstein shared that they can’t get too premium and it’s premium cards where all of their new spending is coming from.
I think what’s interesting in our own loyalty program in terms of card acquisitions, we’ve seen a really robust demand for the premium cards, similar to the airline. The more premium it is, the more consumers seem to want it. And so we’ve had really great successes with our high-end cards and working now to reengineer or inject value into the lower-end cards so that people can life cycle through those. But right now, most of the acquisitions in terms of the spend are coming at the very top end.
Back in November he said “We’ve got the Reserve Card out there, is there even a better card? We’ll put on our thinking caps on that.”
Here he says, though, that they are “working now to reengineer or inject value into the lower-end cards” so that people want those – just as acquiring new SkyMiles members (via Starbucks, Uber, and free wifi on planes) is the top of the funnel for acquiring new credit card customers, acquiring customers for the entry-level SkyMiles cards is the top of the funnel to move customers to higher-end products where they spend more.
So we should be seeing a refresh of Delta’s entry-level cards, and ultimately a new highest-tier card (giving them 5 different card levels – basic, gold, platinum, reserve and something even more premium). In contract, American has cards at three tiers and United has cards at four.
Where else but Delta can I get a premium experience from Atlanta to New York for only 200.000 sky pesos miles in coach?
I hear the new ultra premium card will be called Bend Over Reserve
Sign me up! I love to bleed cash said no one ever.
Will the new Delta Premium card partner with Hilton to enhance the customer experience? Believe it or not there really is a market for such a card among masochists. I can hear them crying “Whip me with devalued points again, hit me with more fees and cut my lounge access!”
again, DL recognizes that it is not a niche airline but serves a whole universe of passengers. Developing their customer base with the newest customers to DL means some will stick around and buy up.
now that WN is bowing out of ATL-LGA, dw, is there any market in the US as large as ATL-NYC that is so heavily concentrated in the hands of a single airline. UA has far less capacity to EWR and AA flies some RJs, F9 has a few flights, and B6 heroically fights away w/ 3 or 4 flights but anyone that wonders why DL makes as much money as it does need only look at ATL. It’s not the big 4 hubs, Max, it is ATL.
“again, DL recognizes that it is not a niche airline but serves a whole universe of passengers.”
Wow, Delta executives were brilliant to have figured that out. What a premium “thought process”.