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”.
Delta cards are proof of existence of Stockholm Syndrome.
“DL recognizes that it is not a niche airline but serves a whole universe of passengers.” Said differently:
Delta has determine it can squeeze more money out of people who think they are going to get more benefits for their investment, supporting Delta’s business model that sustains a money-losing core operation through secondary revenue stream that have overtaken core operations as the strategic and business focus.
Well, when you build a house of cards, the standard result eventually follows.
Parker,
please tell me a US airline that is profitable and does it solely from passenger revenue.
You won’t answer because you know there is precisely no one.
and yet you cherrypick because you can’t admit that DL figured out how to develop non transportation revenue better than any other US airline.
and that will be true going forward.
DL and Amex will tweak their offerings as any well-run companies do.
Why do we have this never-ending push for premium cards? Here’s the reason:
Richard Branson Quote – “If you want to be a Millionaire, start with a Billion dollars and then run an airline.”
Ultra premium card is never happening. The entire SkyMiles department has flipped over because no one respects the people in charge that know nothing about airline loyalty programs. Even if they wanted to, they have no one capable of coming up with anything that makes sense. Get ready for program takeaways over the next year as costs have blown up with the largest Medallion population in history. One too many hair plugs in the company.
I have a secret code that entitles you to an additional 500 SkyMiles if you add your name now to the waiting list for the new ultra-premium card and are approved. DM if you need it.
It’s crazy to me how much DL miles have been devalued, I quit flying them completely a few years ago. I regulairly see basic domestic one way flights starting at 35k delta miles, but can easily exceed 50k miles when I can get to the same destination on AA for 8000 or 9000 miles. Earning miles is almost the same for both airlines, and these flights often cost $400-500 if using cash on either airline. AA has by far the most valuable miles sometimes by a full order of magnitude. I don’t know why anyone would bother being loyal to any other airline. I’m being AA will at some point do away with these award flights starting at 7500 miles because it’s so much better than their competition it’s almost too good to be true, but I’ll definitely take advantage of it while it lasts.
This year alone I’ve likely went on nearly $10,000 worth of flights using miles, and haven’t really dented my total available miles count since I can earn them so quickly.
If the airlines worked as hard to get you to your destination on time as they did selling credit cards we’d have a great airline
Matt
no rational for-profit company spends more on loyalty rewards than it has to.
AA gives away as many low priced awards as it does because that is what it has to do to retain its customers.
DL gets more of its revenue from corporate contracts than any other US airline- and probably any other airline in the world. When someone else pays for the ticket, the calculus of who gets rewarded is completely different from “free-lance” passengers.
I have had decades of Gold / Platinum status with Delta, but being a paid customer is no longer important to them. I do now have a premium Amex Platinum card, but it isn’t a Delta Amex. So I get skyclub access when not covered in my ticket and the much more useful rewards points.
I’m open to this (as @Gene knows, what’s another $1,500+ in annual fees between P1 and P2), so long as this ultra premium card has an even greater benefit than the enhanced First Class Companion Certificate. Like, if they offered a certificate that was basically a BOGO for DeltaOne anywhere, that’d win me over in an instant. If so, I’d use it for ATL-JNB in a heartbeat, save me a cool $10K. (Oh, now I see why they’ll never do that…)
Wow, @Tim Dunn and @Parker going at it again on yet another Delta-ish post today. I’m all for it, fellas. Don’t stop. More. Please.
Delta doesn’t need to rebuild their credit cards, they need to rebuild Skymiles.
1990
to your suggestion about BOGO D1, I think DL has long believed that it would rather have fewer D1 seats than upgrade people because it can fill coach seats so easily and make good money in the same amount of space.
UA’s strategy has long been the complete opposite- lots more non-economy seats but also lots of upgrades – you can see that on their standby lists which are available to the public.
I suspect that DL realizes it has to change its philosophy just as UA is also increasing the redemption rates for its premium seats.
I am guessing the two will meet much more in the middle than where they are now.
Anybody who has read me for even a day knows how much I HATE cherrypicked data. Every US airline but esp. the big 3 rely on their loyalty programs to generate revenue. To somehow act that one is better than the other because they do one part of the business better than the other but can’t translate that to the bottom line is the height of cherrypicking.
DL and UA both need to win at passenger, cargo and loyalty program revenue. DL has the potential to save money from the refinery but that isn’t happening much now. DL also has significant MRO revenue potential which is being held back by supply chain issues
DL and UA both have more than figured out how to not just survive – not a given for every US airline – but also to thrive.
Sorry, I’ll keep my Gold Delta Sky Miles Amex. It gets the job done.
Amex – Used to pride themselves on customer service, now increasingly being replaced by A.I. and less than empowered workers in 3rd world countries…Even Platinum and centurions. Expect higher prices for less value.
In USA, Airlines are devaluing their currency by double digits every year. In the USA, I generally avoid many lounges because it’s not exclusive when they’re more crowded than the rest of the airport.
There is still some value in some of the European/Asian carriers as they are not allowed by law to devalue as quickly.
Why anyone would pay more for less is beyond me. I will be downgrading at the next interval.
Not entirely related, but I got overcharged for $1,000 on my Amex Delta Reserve in Dubai this January and Amex didn’t refund me. This restaurant took my card and charged $1,000 on the machine for an $80 meal. They didn’t give a receipt, stating issues with the machine. I saw a charge later but under a different name, and by the time I figured out it was this restaurant, I was already in the US. I researched online and this restaurant had over a hundred reviews of people being scammed. I created a dispute and sent all relevant information to Amex, yet they didn’t honor it. I spend over $100,000 on this card a year and the only time I get a fraudulent charge, they didn’t honor their protection. Needless to say, I’m moving out of Amex and never using them again
I have the reserve. I’m only a fan because of the $200 hotel credit amd the first class companion ticket for the $650 fee. That’s a first class ticket for $450. I will take that all day. I don’t recommend high spending on the card as Delta points have the lowest value in the space, but the perks are worth the cost.
I was pushed into quickly signing up for the card at the Delta counter last week when I was in a hurry and didn’t understand the whole deal. Now I’m scared of what I got myself into….All the agent said was it was “free” and she waived my $35 baggage fee….
Delta’s thinking is called greed. There are those that might take the card. Me? No thanks.
I had been a loyal to DL for over a decade and I remember to get up grades was a sure thing. The lounge weren’t crowded and the food was actually good. But last few years is been more like cafeteria quality and super crowded. The miles worth pennies and my destination is only non stop in the winter. Im done I will not renew my reserve Amex card this year. There are other airlines fighting for my loyalty and money. Ciao Delta
Of course the CEO is looking for a way to make a buck and take it from the consumer. Shameful.