Delta made an aggressive move against its top customers earlier this month. They dropped miles and flight segments as a way to earn elite status, focusing only on qualifying dollars spent, and raising the required spend from $20,000 to $35,000 for top status.
They stripped away benefits from their premium co-brand credit card that comes with lounge access, limiting visits to their lounges to 10 times per year (a roundtrip connecting itinerary could use up four of those) unless cardmembers spent at least $75,000 per year on the card. And to further incentivize card spend, members could earn qualifying dollars by spending on their Platinum and Reserve cards.
- Members received no new benefits while being asked to give Delta more, just to stay even and a lot of Delta elites decided they’d just had enough.
- They were going to have lower status under the new system, so why bother at all? Even if they could spend $350,000 on a credit card to earn Diamond (everyone can do that, right?) they’d be earning a currency that’s worth far less than other rewards points while doing so.
There was blood in the water with Alaska Airlines and JetBlue aggressively courting lucrative Delta elites (JetBlue even termed their Mosaic status match, “Mosaic on the DL”). Knowing that many of these are disaffected premium co-brand credit card customers, too, they offered sweeteners to those who took up the new airline’s card – status through 2024 without even flying.
Delta CEO came out this week saying that they plan to introduce modifications to the changes in the coming weeks. He didn’t say the changes were a mistake. And he didn’t say they won’t still get there. He said they moved too quickly, pulling the band-aid off with their changes. That was the mistake he acknowledges, so he sees it as a PR problem not as a strategy problem.
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.
Why did he move so quickly with that statement, a mere week after the announcement? That’s remarkably fast since changes to the card product also involve American Express another large company.
Chris Dong shares some intriguing social listening data about consumer sentiment expressed online,
Metrics from Sprout Social, a platform that analyzes social messages and overall sentiment, show a 352 percent increase in the volume of “negative sentiment” tweets about the Delta loyalty program in the week following the SkyMiles changes (September 13 through September 20) as compared to the week prior (September 5 through September 12).
In addition, the percentage of tweets with a “positive sentiment,” specifically about airlines that were not Delta (United, American, Southwest, Spirit, and JetBlue), increased by 13 percent for the week starting September 13 compared to the week prior.
And the 352% increase in negative commentary about Delta on Twitter likely understates the reaction as Dong relays to me, “the week of Sept. 5 still had a lot of chatter” about Delta’s diarrhea flight which went viral all over the world. Compared to a normal week, the difference would likely be even more stark.
They saw not just the coverage of the changes, they saw the online response from their customers. They thought they could push customers to spend more through their Amex products, which they already claim runs about 1% of U.S. GDP and will earn them nearly $7 billion in revenue this year. But customers told them they couldn’t be pushed to do more under threats of receiving less.
Hinting that things won’t be as bad as announced (for now) may be enough to get customers to stop jumping ship – stop cancelling credit cards, stop status matching to competitors – and take a wait and see approach. And, no doubt, Delta hopes that in the interim the uproar dies down. Attention spans are short. Meanwhile Delta has said the changes they announced actually haven’t yet gone far enough, to expect more like this in the future.
It’s a shame Delta is sticking with the “rip the band aid off” strategy. It would’ve been the best way to break the “elite for the masses” illusion, and get regular folks off the self-destructive status chase nonsense.
Sorry – replace “is” with “isn’t”
The Amex cancellation & charge volume data will be more revealing.
We here @ Delta aren’t happy until you are miserable and feel ripped off
Nobody but nobody can offer you ancient refurbished planes held together with duct tape ,outrageous award pricing and next to no availability of awards on our sky scream partners
We do appreciate your business!
Continue to earn and redeem at 100% more than our competitors as you know your getting the most premium experiences in the sky.Welcome aboard!
The economy is bad, prices are skyrocketing, people are feeling the pinch at every store, rates on everything are up, and they think this is a good time to tell customers to spend 75% more just to maintain status for less benefits? DUH! OF COURSE negativity went up.
That’s about as stupid business thinking as the company’s who seriously lost money or went under during the pandemic when they decided to start taking away everything that attracted customers and making their service worse at a time it was already very hard to get customers to go out or do extra spending.
My past week on DL (with flights booked before the changes were announced):
JAX: SC had a line on a Sunday afternoon
ATL: B SC —> Long line. Both A SCs –> long line. T–>no line and no toilets (they are being renovated)
ATL-MDW —>FA in first did one service they stood in the galley with his back to the passengers reading a book and raiding the snacks for the rest of the flight.
ORD-DTW —> Did a confirmed same-day change. As a DM landed at #15 out of 16 on the UG list. No one at DL could explain this as 11 people ahead of me on the list were below DM (they also wouldn’t change it).
SEA-ORD —> duct tape holding armrest between seats in F. Wall panels in lavatory in F peeled off the wall and just hanging there. Internet cut in an out the entire flight.
Premium airline my ass.
Delta does not care about the diamond customers. CEO should be fired, he’s out of touch.
I think many, myself included, got a peek behind the curtain, realized perhaps the emperor really has no clothes, and are happy to not only product change our pretty purple cards to gold (keep that free bag and 15% “discount”) and take the generous matches to B6 and AS. Diamond status has turned out to be the ugly reminder of an abusive ex you’d rather pawn than keep around. Thanks Ed and Co (aka AMEX) for the wake up call and good luck with that $10B goal…I’ll use you when it’s convenient for me, not the other way around since the scales have fallen from my eyes (finally).
Dwondermeant: best post I’ve seen in along time.
Spot on.
Delta spends more time telling you (falsely) how they appreciate you then they do fibbing about delays.
@Daniel, absolutely. The economy is going down the tubes and DL thinks this is the time to get stingy with a declining market? Such bad timing. Whose idea is this, anyway?
What will be interesting is Amex quarterly call related to number of DL cobranded cards and whether there is an impact.
@ Gary — Getting ready to fly ATL-LAX nonstop shortly…on American! So much for having no options from a Delta fortress hub. Will enjoy the Admirals Club (with no line; I have never seen one there) courtesy of my foreign carrier OW Emerald status and board at a T-gate (NO Plane Train!). Flying on a J award on a dinner flight for 22,000 Avios. If I were flying Delta, it would go more like this: pay 100,000 SkyMiles for the ticket, ride the Plane Train to Timbuktu, skip the SyClub due to hour-long wait to enter and get fed a basket of potato chips and gummy bears for dinner. Which sounds more premium to you?
Negative social sentiment is NOT a reason to pull back on any business decision.
Positive sentiment does not translate into net revenue and on the flip side, negative sentiment does not translate into a loss of revenue. The people whining on social media are inconsequential. They are also not necessarily going to do what they say.
High value customers are not on social media to begin with.
The hammer is really going to fall throughout 2024. Folks will keep Delta Reserve and AMEX Plat in 2024 as SkyClub visit caps kick in beginning of 2025. But folks will stop flying Delta — if I’m going to get crappy reliability, no reason not fly another airline where the frequent flyer program has some value — in 2024 (or use up SkyMiles) and cancel cards at the end of 2024. Delta has just made it harder to meet the higher MQD thresholds by reducing the earnings from partner airline flights. It’s somewhat mind-boggling how Delta went from the best run airline before the pandemic through the pandemic to what it is now. They blew it during the pandemic by letting too many people go and they haven’t recovered. And now this major PR and strategic fiasco. It’s almost as if Doug Parker has entered Ed Bastian’s body. BTW, your comment in another post about the frequent flyer detained for suspected trafficking because she hadn’t spent 75K on the Delta card was a gem!
It is logic like this that cost Hillary the election – thinking that “social media” reflects the reality of what is actually happening in the world. Maybe the CEO got a call from AMEX regarding the “real” number of canceled cards?
Or maybe some MBA-type figured out they used the wrong equation or a decimal point was off in their Excel spreadsheet?
Obviously, too early to see real revenue/impact numbers
I’m just glad that I live in BOS — not a hub for anyone and true competition. I would hate to live in ATL, or DEN, or PHX, where you’re just held captive by one of the big three.
@ HVC — “High value customers are not on social media to begin with”. Yes, they are too busy flying private to read the internet.
There are quite a few billionaires active on twitter…
Delta is the Bud Light of Airlines.
“Rip the Band-Aid off”? More like giving their best customers the middle finger.
HVC totally gets it
“Negative social sentiment is NOT a reason to pull back on any business decision.”
Delta is not immune from criticism but they are very data driven and decided either with the data they have seen (along w/ Amex) or to tamp down negative comments to throw out the indication they are slowing down the changes, but they are hardly going to put the bandaid back on.
Amex is the only source of knowing the impact of DL’s changes and certainly said something if they saw higher than expected numbers of card cancellations or downgrades or saw charge activity on DL branded Amex cards.
If they contained the damage along w/ DL, then the rest of us will probably never know. If it was worse than stated – and it likely was not – DL would have acted faster and more decisively.
With AA’s decision to cut flights in NYC for the winter and UA extending its cutbacks at EWR due to operational problems, DL is in the driver’s seat in its ability to continue to acquire customers.
And DL’s decision to launch DFW-SEA next summer along w/ the reinstatement of daily SEA-PVG, a clear effort to penetrate the Texas to Asia market, says Delta’s efforts to gain premium passengers from AA is not likely to slow down any time soon.
And DL has filed an application for permits to put a Sky Club in Charlotte where it is the 2nd largest airline but has not had a Sky Club. As crowded as DL’s Sky Clubs might be in some of its hubs, AA’s CLT clubs are undoubtedly fair game esp. considering that DL serves all of its hubs from CLT except for SEA and LAX and those two markets might be coming as DL gains new gate space.
One question. Why would rolling back changes stop people from status matching?
If there’s no cost to buying insurance why not buy it.
One must remember, most “high value customers” are middle managers and above who often select an airline specifically to earn miles or elite benefits. For this group, AA and several others offer a much better program going forward.
HVC wrote a comment that tallied 100% wrong on all points.
DL seems to forget theirs is a commoditized business.
There little differentiation from one major carrier to the next on seat, price, food quality, flight attendant performance, counter and call center.
That’s why you CANT screw up the way you do “customer care, reward programs and how you handle your own mistakes or those brought by nature.
DL. The minute a mistake happens from their own to nature, the whole place just goes stupid.
Then they pull this change out of their hats and have to reevaluate.
Again, stupid.
Again, Tim Dunn aka “The False Prophet” spouts off a bunch of “DL Wet Dream Scenearios” as if they are reality-based.
1: DL can’t be “Data Driven” and yet only look at 1 source of data. That’s ignorantof You to suggest so as well. The increased negative social media posts led to National, Regional, and even LOCAL Media new reports. I found VERY negative local news reports on the DL changes from EVERY SINGLE DL Hub and “focus city” on YouTube. Not to mention the national news coverage….
2: Just because UA & AA are shifting around their NE ops doesn’t mean that 1 season is going to give DL the whole pie. Both big airlines, amongst all the other airlines, still have major ops in the region and will do just fine.
3: DL WILL NEVER take the Texas-Asia traffic from AA. You think all those Texas Based Japanese/Korean/Chinese businesses and all the Businesses that have Texas/Asia ops are going to send their employees on extra segments (that leave room for delays/missed flights/baggage issues/weather/etc) all to be “loyal” to DL? Nope. 1 and done. And AA owns the North & Central Texas to Asia market for a reason. Also, DL planes are old AF and no one wants to fly that long on them Timmy.
3: Good Luck with Charlotte. Again, another Wet Dream. AA Territory. And AA is renovating and expanding their lounges and ops there too.
4: BYE FELICIA.
While I agree wholeheartedly with @HVC that Negative social sentiment is NOT a reason to pull back on any business decision”, I deplore that it provided Mr. Dunn with an excuse to put on his rose-colored glasses and paint DL stock as rising even as the airline is still reeling from a colossal unforced error that sent it in full damage control mode. As usual, the diatribe sounds like stockbroker talk (“…effort to penetrate the Texas to Asia market…”) designed to sell DL stocks, oblivious to the fact the consumer, who drives all profit, is as mad as hell with DL and is not going to continue taking it…
Peter,
For someone that believes that air travel is commoditized, Delta’s financial statements copmared to the rest of the industry argue otherwise given that Delta gives a revenue premium.
Benjamin,
you are in denial
Delta is gaining its share in top markets because other airlines do not have the amount of flights for one reason or another as DL.
No one said DL is after ALL of the Texas-Asia market. By adding its first Texas legacy carrier hub to SEA route, which they chose not to do for years, DL is simply opening more of the Texas market to itself.
You do realize that DL has had SkyClubs in DCA DFW ORD and MIA for years? DL is the #2 airline in revenue in CLT just as it is in MIA so it makes plenty of sense to add a Sky Club there.
The real difference is how many DL hubs DO NOT have either AA and/or UA clubs
I suspect that a significant decline in co-branded Amex spending has driven Ed’s announcement of some backpedaling. There are probably a lot of people like me who used to be road warriors but have continued to enjoy years of Gold or Platinum status (enhanced in the past two years by the pandemic rollovers) and Sky Club access because of the Reserve card. When the changes were announced, my future status ceiling became Silver (which I should soon have anyway as a Million Miler) and the lowest meaningful spending threshold went from $30,000 to $75,000 (much too high for me), so I immediately stopped all spending on the card. I plan to keep the card through 2024 but use it only for Delta purchases.
@ Tim — “Negative (customer) sentiment is NOT a reason to pull back on any business decision.” Seriously? How did that arrogant attitude work out for US automakers in the 1970s or Hillary in 2016 or Sears or….
Why so much love for Delta? How about the same for United and American too! Both programs are now worthless
@Gene — Negative social media chatter is a poor metric in this case because it provides little information about whether the negativity led the consumer to cancel or curb their spending on DL AMEX credit cards, which, in my view, is the more likely outcome determinative metric.
Talk is cheap. Call me when you have some real data, like from Amex, Thot Leader
And I’m no Tim Dunn fanboy, but he’s the only one correct in these comments. Imagine if we took seriously every celebrity who pledged on social media to move out of the US after an election didn’t go their way? It’s beyond flawed, emotional keyboard warrior click bait “data”
This isn’t much different, and it’s really poor data to cite. Chick fil A and many other businesses continue to thrive despite SJWs on social media
My approach? Very simple.
Status is locked in for 2024. Reserve card has already renewed. Will use up all my miles in ’24 and be done with Delta (and the Reserve Card) come 2025.
Oh, and Ed B. should be fired. I don’t care who came up with the plan…but you signed off on it, Ed. You’re the Head Coach not the Offensive Coordinator. It was your final call NOT anyone else’s.
Tim Dunn.
Thanks some good points but in the airline industry DL having more revenue is purely a function of more planes in the air, not that the travelers’ experience is “better”.
I have top status with AA and close to top with DL and UA and I see little difference. Unfortunately, the difference happens occasionally when and individual flight attendant, gate agent, call center person distinguished herself by providing caring help that they draw on their own dna for versus a “standard” of performance by the airline.
My personal bone of contention w DL is that, as soon as weather hits, the rolling lies begin.
AA and UA just seem to be a bit more honest.
This and I just can’t stand how aggressive DL is to tell you they care when they don’t give a crap.
Thanks.
I’d be surprised if negative feedback was the sole reason they walked back some changes, especially since the execs said they expected unhappiness from current elites.
With nobody (presumably) canceling cards yet since they can still use benefits in 2024, I’m guessing they saw a significant drop in credit card usage from people who already requirement me for next year and wanted to spend somewhere where they’d get a better return.
@ Gary — On that AA flight now. Can I please have some gummy bears and potato chips. That was one of the most disgusting meals I’ve ever been served. Certainly helped with my diet since I ate 10% of it…
“Rip the Band-Aid off”? More like giving their best customers the middle finger.
Scott says:it best.
I don’t recall such abusive language directed at guests at any time, not in any Golden Age of Travel or otherwise.
I got my AA match. I am leaving DL for AA. The Golden Age of Travel will be mine.
Lots of good comments here, I’ve already admitted that I’m more of an AA guy than a DL guy, and yes, I’ll admit that AA has many of the same foibles: FA’s with less than desirable customer service, Duct Tape as opposed to repair, and devaluation of their Mileage Awards (I’ve personally experienced only the 3rd). That said, I’ve still got an FF Account with DL (vestige of 42 years with a Multinational in the Twin Cities who used DL as their “Preferred Carrier”). Because of this, to me the most concerning remark by Delta’s CEO is that “I think we moved too fast”. His “Tell” is that he clearly expects to implement all of these changes eventually, and he considers his only mistake to be that they moved too fast. Since many of us play a long game, this is a screaming cry to avoid DL at all costs.
I bailed on Delta last year. It just seemed that they were on a long-term trend to devalue the experience for customers (I was an almost 10 year Diamond member in the running). Traveling more, getting less miles, spending pretty close to the new limit but I decided the benefits were just not worth it anymore. I had top status on another airline with better benefits so just doubled down there and have built up so much I can fly my family and relatives for trips now without a hassle. This news by Delta to radically devalue benefits (and promising to keep doing more) means they have officially stated they are taking everyone for granted. Do the math yourself, how many trips would you have to take in the new scheme-scam in order to earn enough to take a family of four to Europe?
I already canceled my card two weeks ago! Amex tried to talk me into a no fee card but I said why bother. I can use any of the other airlines without the hassle and lack of appreciation from Delta!
While I hope that they’re going to back off some of this, period, the fact that they’re couching it in these terms doesn’t give me a lot of hope. The fact that they’re “not done yet” means that unless they’re going to nail some things down for 2025 (or even lock in a longer-term commitment on the Reserve card), I don’t think that whatever they have to say is going to change much for me unless the next steps are pretty clearly telegraphed.
Delta really took a dump on their brand and are still sticking with it. Seems that the diarrhea will continue. Avoid the putrid smelling airline and book elsewhere.
Does Tim Dunn own a farm? Can’t figure out any other reason that he keeps on putting lipstick on a pig!
Some weird politics underlying some comments in this thread
For the Sprout algorithm – Delta is bad, delta is very bad. Ed Bastian is clueless. Never fly Delta again.
It must have been the sudden spending drop on branded Amex cards. Most folks put it aside, planning to cancel it in 2024 after using up their miles but have immediately stopped putting any penny on it.
Actually Bastian’s response is exactly what you would do if you were trying to do social media damage control but weren’t actually going to change anything.
“We still think we’re right but we’re going to talk about it differently.”
I’d be interested to see where all of you live, especially those who say they’re leaving Delta forever for Alaska/AA/UA etc.
I live in MSP (Fortress hub) and really only fly first or rarely Premium Economy.
So I’m not going anywhere unless to another airline’s hub.
(Example I fly MSP to DCA next month. Outbound on DL. Return on AA)
If price is same, I fly Delta cause I’ve found them more reliable.
If not, I switch airlines. (The DCA to MSP flight was $200 cheaper on AA)
But the AA plane sucks. But it’s $200 so…
In the end I guess I’m a free agent.
The days of getting something for nothing are gone.
All the planes are full. There are no upgrades. There is no lounge space.
Delta is trying to weed out elites.
It’s common for over half of a plane to be Diamond out of MSP.
When everyone has status… nobody has status
To whoever said they’d rather connect on AA/UA then fly DL? (Different thread)
I don’t believe you.
And if you really do that, then your decisions are emotionally driven and not pertinent to me.
I do find it interesting how much more DL values credit card spend over flying. .
I spend $8 to $10k per year on plane tickets, which will only be Silver next year.
I dumped my Delta Amex years ago due to low value of card.
All of my cc spend is on Chase Sapphire and Amex Platinum because transferring to Air France is so much better than Delta.
But I guess it makes sense.
They can create Skymiles out of nothing and sell them to Amex
But they have to operationalize an entire airline to fly me from A to B
Still it feels odd to know you spend $16-20k per year (as a household), all in First Class, and barely make the lowest tier of “status”
So bandaid came off too fast.
We going to slap it back on and rip it again a few months .
4-times of this and y’all chumps should be desensitized by then.
Now send me those dollars like a clueless fanboi.
Sincerely,
Ed