Strategy: Delta Makes Its Inflight Product Better Even as Its Mileage Program Gets Worse

Delta offers a marginally better product in economy than United and American. And they offer a somewhat more reliable airline operation, too.

Sure SkyMiles is a dumpster fire. But American and United have just been copying Delta for years, playing the greater fool by giving up their only real advantages over Delta. So it’s not as though their mileage programs are real differentiators anymore (although I’d still prefer either one over Delta’s).

Copyright: idealphotographer

You don’t fly Delta because of the miles, but if you fly Delta you might as well pick up miles. Instead you fly Delta because you live in Atlanta, New York or the Upper Midwest or because they offer the best schedule and price on a given trip.

I want to like Delta the airline, but every time I consider them their executives make it impossible.

Their media shop undermines trust and their lobby shop picks our pockets.

And yet I have to respect what they’re doing getting their mainline aircraft to run with few cancellations and close to on-time, and by making modest improvements to the coach flying experience.

Delta is making a bunch of new investments in coach.

In November, the airline will be launching customer experience menu cards, which will include information on timing for each service and details on the inflight food and beverage offerings. In December, the airline will launch new upgraded cutlery in the Main Cabin.

Continuing the expansion, the airline will launch upgraded meals and new serviceware on long-haul international flights in mid-2018. The new collection will include newly designed trays and upgraded rotable serviceware that will complement investments in meal quality to provide customers a restaurant-style dining experience.

…In addition to the new serviceware and menus, Delta will be upgrading the Delta Comfort+ and Main Cabin pillows on all international long-haul flights, complementing other sleep experience investments the airline has made including sleep kits and upgraded blankets.

Credit: Delta

At its investor and media day American said that product investments can yield a long-term difference, because competitors will just copy. American knows this well, Delta makes an investment and they copy but don’t do quite as much. Delta clearly thinks that experimenting with customer service initiatives, finding out what works, what customers respond to in surveys and then with purchases, matters.

Matthew doesn’t think investing in an economy product makes business sense. I disagree.

To be sure, Delta’s efforts aren’t going to be as good in practice as their media team claims. Because their media team can’t help but overhype, which is why I don’t trust their releases. They undermine their own cause — just offer the facts on good initiatives and those initiatives would be more believable. Still:

  • Investment in airline product can be a differentiator just like a frequent flyer program can be a differentiator. Delta doesn’t use its loyalty program as a differentiator, SkyMiles isn’t better than its competitors (cough). But the inflight experience can be.

  • Investment in product has to be a part of an integrated strategy at developing a more premium brand, and each offering needs to be carefully tested with customers to understand what they value and what effect it has. Not all investments are worthwhile investments.

Delta claims to earn a revenue premium over its competitors, arguing customers will pay more to fly Delta. And stock markets seem to prefer airlines that treat their customers well.

It’s clear what kind of bet they’re making. They’ll experiment and try to find the things that will cause customers to prefer Delta overall and pay more to fly their product than competitors.

To be sure the differentiation is modest. But it’s the best we can hope for an in industry that’s so heavily regulated and protected from competition.

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, 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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  1. BWI is my home airport. But I’ve flown a lot of Delta because
    A. Their mileage program has actually served me as well as the other two for flights to Europe
    B. It’s a really nice airline

  2. A well written article, though I’m not sure the frequent flyer program can really be viewed as a differentiator when the average American has such poor finance skills. Rather, I think the *existence* of one is just a qualifier – is anyone complaining about Southwest or JetBlue’s fixed redemption based program?

  3. There is zero evidence that “having a good frequent flyer program” makes an airline any money.

    There is a some evidence (not conclusive, though) that operating a good airline makes an airline money.

    This makes some sense, of course. Frequent flyer programs are very confusing. The vast majority of travelers don’t really understand them. And the ones who do are mostly gamers, who aren’t good customers anyway.

    On the other hand, pretty much anyone could notice and appreciate better inflight service. Perhaps if they encounter it, they’ll choose that airline again — or tell friends and family to fly that airline.

    I therefore think it’s a no-brainer to invest more in product than in a frequent flyer program, regardless of what people who write and read this blog think.

  4. It sounds like you don’t like them for their Corporate opinions, more so than who they are as an airline. Maybe it’s just hard to admit you’ve been had by American. I know I’m giving up my EXP status next year like OMAAT, and Delta Diamond is hard to compete with (supplemented with SW when a domestic direct is available)

  5. We always said “if a US domestic airline would offer a better product, people will pay more to buy I delta has a better product . That’s why they are doing so well. Does SkyPesos suck? Sure does. But when my main priority is getting from point A to point B, Delta does a better job – better employees, better planes, better amenities, better recovery from IRROPS.

  6. Inflight improvements? Boy, I’m certainly not seeing that. A few weeks ago I flew DeltaOne from SEA to AMS, and had what was probably the worst inflight food I have ever suffered through. I went in with pretty low expectations, and was really shocked at how bad it was. If that was an improvement, I sure didn’t taste it.

  7. It’s interesting that Delta is de-emphasizing their frequent flyer program. As someone who plays the mileage points credit card game, I don’t like it, but Delta marches to the beat of their own drum and is the most profitable (of the big three U.S. airlines) as a result. Their actions have included:
    1. Purchasing their own oil refinery to help control/lower their cost of fuel
    2. Purchasing innovative Bombardier C-Series jets at cut-rate prices (despite Boeing’s ruckus)
    3. De-emphasizing its frequent flyer program

    While (as Gary mentioned) Delta’s PR machine talks out of both sides of its mouth, one has to make at least grudging acknowledgement of Delta’s out-of-the-box approaches.

  8. Fools love to make bold statements such as “there’s zero evidence”.

    I am evidence that a good frequently flyer program brings an airline money.

    I have been an exec plat with AA for the last 16 years and concierge key for the last three, favoring them for my corporate travels.

    After their latest changes, I won’t requalify this year as exec plat for the main reason that I no longer see value in going out of my way for their miles/status – no more loyalty, and much less money spent with them.

    There’s your evidence.

  9. Everything in this post is sound, except that the difference between cost of UA and even AA awards vs cost of Delta awards, even with the upcoming UA changes, is night and day. We’re talking usually 2X-4X more at Delta going in and out of NYC. Saying it’s not a differentiator is just not true.

    I recently needed a last minute flight from ORF or RIC to NYC. AA: 7,500. UA: 10,000. DL: 40,000.

    I also just priced out a last minute flight from NYC to ORD.: AA: 30K (many options). UA: 25K (many options). DL: 37.5K for one single ill timed flight; all others were 60K.

    Delta does have a somewhat better economy product than their competition, but the difference in award redemption, which is what’s important to me (if not the average consumer), is an obvious differentiator, and the main reason I rarely fly Delta.

  10. Not sure that SkyMiles is as bad as many take it to be. Low level(70K) to Europe seems available enough. No, not everyday but significantly more than AA(unless you wanna take BA and their insane surcharges via LHR).
    Add that to a well run operation and efficient service when something goes wrong and Delta is by far a preferred domestic carrier, at least on the east coast.

  11. I have to agree that Delta Skymiles is not as bad as it’s reputation in the blogger world would indicate.
    In fact, I would pose that AAdvantage is much worse from a redemption point of view, mainly due to the fact that AA is pushing you to redeem on BA with their insane fuel surcharges. At least Delta flies their own metal to most EU destinations (with no fuel surcharges).

  12. Delta is better than all other US legacy carriers! Last year we had a medical emergency that forced us to cancel a trip to Europe. When I notified them via email & asked for a refund for a business first seat, they responded within 24 hours with a resounding YES & credited our Amex account within 48 hours. Do you think United or American would have done that??! I assure you NOT. They now have 2 very loyal customers & when we rescheduled our trip for this year, we never thought of flying any other airline. This is to give acknowledgement for their kind handling of an unpleasant situation. THANKS DELTA!!!

  13. I’ll start by saying “To each his own” and “Your mileage may vary”, but from my experience/perspective/opinion, Delta is stepping up it’s game. As a Diamond who puts in the miles I’ve seen the domestic in-flight food and amenities offerings increase. The food and snacks especially. The lounges are getting overhauls and some nice upgrades etc. In addition, the routes go where I need to go when I need to be there so even if there wasn’t a mileage program I’d probably still fly them (I fly for work and the company pays), so not overly price conscious. I’m also one of those likely few that are very happy with the change to the MQD limits because I think in 2019 it will only further weed out the amount of Diamonds to really differentiate that level of loyalty and make it an even more elite group. Not trying to sound elitist, but for as much as I travel I think the ability to get upgraded should be enhanced (right now I’m seeing 2 or 3 upgrades out of 4 segments on nearly every trip). Having been a United 1k and moving to Delta years ago, I’m very happy where I’m at now.

  14. Clear difference in coach service Delta vs American- Delta F/A s thru cabin multiple times, AA one pass and then hide in galley to eat, read and chat amongst themselves. Seen too many times to be a coincidence-must be handed down from senior crews to junior ones.
    Business/First also better at Delta, from pre-departure beverage to continuous SERVICE throughout.

  15. @ SadStateofOurCountry — Just because YOU changed your behavior because of a perceived devaluation of a frequent flyer program doesn’t mean the airline was unwise to make the program less lucrative. If, for example, for every customer they lose in a devaluation, several people don’t care, it can be very lucrative to devalue.

    I know it’s not what most people reading this blog want to hear, but there’s now many years of history regarding frequent flyer devaluations. Almost no devaluations are reversed — because the devaluations make the airlines money. This is in contrast to service devaluations, which sometimes are reversed. Getting rid of free onboard sodas, for example, is far riskier for an airline than reducing award space. Sad but true.

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