There is a full copy of the transcript of the Q2 earnings call from Delta on seekingalpha.com and clearly Delta continues to do well, but the part that really got my attention was the above. That is, the up-selling of first class seats.
I am most happy Delta is making a ton of money. I am thrilled they are making staggering cash from bag and other fees (as long as Delta Points readers are not part of that). But to see the amount of open seats available for upgrade for elite’s shrinking is worrying.
Now before you pile on the WFBF that is “want first buy first” bandwagon, or as a reader commented once (who’s husband is a DL pilot) that us over-entitled elites should basically never ever get upgrades and are just whiny to begin with, understand that medallion upgrades are one of the BIG reasons a flyer stays loyal to Delta. I mean, it sure will not be for the frequent flyer program in 2015 as there will be few rewards there after 1JAN2015. Upgrades are still one of THE top perks and a major reason to shoot for top status with the airline.
Also understand I really am fine with the current system Delta has put in place. After all, anyone paying for these upgrades are overpaying IMO. They are basically paying close to retail for the upgrade either with cash or points. Even I sometimes buy and recommend 1st class tickets including mileage runs in 1st class when the price is right.
However, what I can see happening is the prices for these upgrade going lower and lower to the point where medallion upgrades become almost impossible to get.
For example, I am on a one day mileage run later this year and paid $196 for the ticket (less a $50 voucher). Now the current price to buy 1st class for the round trip is just $409. So, the up-charge they are offering me is simply the price difference between what the 1st class ticket “buy price” would be and what I paid. I love this. Not that I would ever do it, but I love the math. I love that Delta can make more money selling a seat at the current first class price.
But what if? What if they decide 10 days out to send me an email that I can upgrade to 1st for say $50 or even $100 round trip? I would personally still not do it as I expect the upgrade as a Diamond (currently running about 90% for me this year) but I bet a TON of folks would buy an upgrade in a heartbeat at that kind of price.
At this point this is just speculation. We will have to watch very closely to see if REV MGT decides it is worth taking the next step in decimating the value of being an elite Delta flyer. I sure hope not! – René
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