What Delta CEO Ed Bastian must undo to “Keep Delta Climbing” – STOP FREE AGENTS!

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GoldboxATL says free agent

Hey Delta – 911 – this is NOT good for business!

Recently in an article Delta’s CEO said one of Delta’s biggest faults in the past was competing against low cost carriers. The error was trying to become, not a world class airlines worth the cost, but one that can compete in the basement of the low budget airlines. That was not Delta then nor is it Delta now.

Mr. Bastian also talked about how the Delta “tank” was not empty when the last CEO left. But everything he did was not the smartest move when you think long term and I think, like competing against the bottom feeding airlines, all but destroying SkyMiles was just as dumb a move.

Delta wants to prove they are worth being the only airline you will ever think about spending money on. They want to be “it” that is THE airline compared to all the rest. They are doing this by, with religious fervor, completing all flights and mostly on time. Impressively so, in fact, and the results speak for themselves. But a huge part of this “perfect world” is missing – SkyMiles!

If you lined up 100 Delta elites from 5 years ago, and asked them, “When you are going to fly, who would you book with?” I bet 99 of them would have said Delta. I bet 100 of them would have said something to the effect:

“Well, first I would look at Delta.com for my flights for my trip.”

Now when you build on this, and look at the comment from @GoldboxATL from twitter above, you see a fatal flaw that Delta has created. Notice the final few words? He ends with:

“…best to be a free agent”

This comment is from a Delta Diamond who says he owns Delta stock and all but exclusively flies Delta. But even he clearly understands that every single flyer should no longer just book Delta. Think about that for a bit. This means for some people, rather than buying say a first class ticket on Delta by “default” if another airline has a cheaper first class ticket you should buy it on that airline (or if that airline has a better route or schedule no matter what the price). Loyalty sure is not what it once was. What company would ever want customers to go to another company to serve their needs?

If I were Delta’s CEO I would be YELLING “911” to everyone who would listen that the current foolishness of SkyMiles is not working and trying to match “Spirit Air” in terms of a frequent flyer program is not a wise move like the old moves of years past the airline has made.

why rev based is so bad for airlines

Not even for FREE Starbucks!

Look at this next tweet where PointsHackr commented to my tweet. Also peek at both Starbucks stock and Delta stock since April. Notice anything similar. Yeah, down, down, down from the highs. I think, and those in the investment community as well, think only negatives are on the way. I agree (disclaimer: I never buy/sell any airline stocks). What could help fix this? You betcha – loyalty and loyal customers who always and only buy Delta tickets.

But wait – I personally never want to EVER spend a penny ever again on Starbucks. I used to always pass a Starbucks and think: “Hey, a Starbucks, let’s get one. If nothing else we get a few stars”. Yeah, when I thought about a nice drink I thought about Starbucks. Now, I have personally not spent a penny since April’s crushing changes. I have even switched from buying my Delta folks gift cards from Starbucks to Amazon cards. When it comes to Delta changes I know a number of readers who have done the same and they fly other airlines.

Now because the other airlines stink SO bad I know some are back with Delta, not due to loyalty, but simply because Delta works better than the others. So, as long as the others continue to stink so bad then Delta is in great shape. But what if they start doing the simple things right like flying on time and providing good service? If all the loyalty programs stink then why be loyal to Delta vs. the others. See my point? SkyMiles needs to stand out not stink like the rest or worse than the rest.

Now think about this for a bit. What if Delta, as they have VERY slowly started to do this year, gets the fact that if they have an AMAZING loyalty program AND they offer the same great service as the other airlines then Delta becomes the obvious choice and not just that – they again become the choice you always look to and look to first!

Let me say this plainly: FREE AGENT THINKING MUST END

Free agent flying mean zero loyalty to Delta. It means simply booking and doing whatever works. It is not a default thinking that there really only is one choice. This is what Delta must fix and can fix with SkyMiles and the Medallion loyalty program.

Please know I am not saying Delta must simply flip a switch and go back to what they had but many of the old program parts worked to drive this unquestioned dedication. Some of those must come back. But other new bits can also drive the psychological devotion back to Delta as it once did.

What would be a great start? Republishing the award charts (and the upgrade charts) is a great first step. Bringing back stopovers on awards would be huge. Allowing at least Platinum and Diamond medallions to upgrade on E BASIC fares would say “you are not your fare” but your spending every dime on Delta and flying Delta matters to us. Giving BIGGER bonus points for elites than now to bring them somewhat back in line to what once was. Since Delta “feels” C+ seats are a total new experience (unlike the rest of us) then they need to add some free C+ upgrade certs to ALL elite levels (similar to Global Upgrade and Regional Upgrades). All of this would be simple and quick workable improvements.

delta brags about cheap awards

The way NOT to win is what they are doing now. The SkyMiles people (and Delta) brag about their cheap coach award sales (how can you have a sale without an award chart btw). So Delta is trying to show how cheap they are. Really? How about you instead brag and do more business class sales domestic and internationally (they have done one over the past year or so and are to be commended for that). Again, SkyMiles should not be a “budget” frequent flyer program.

The bottom line is simply this – at some point the other airlines will improve what they do. Delta needs to, by that point, have the loyalty program fixed and improved by then or the free agents will simply say bye bye to Delta in a heartbeat! – René

 

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12 comments

  1. Rene… great post. Agree wholeheartedly. As a Delta PM I had to cheat on Delta to fly a 787 domestically, but other than that one leg, they’ve still got me for now. Hoping the new CEO can improve SkyMiles!

  2. My view on this could be skewed because I live in a hub city, am a very frequent flyer (mostly business travel), and a huge supporter of Delta. When making a flight selection the #1 driver for me is time with price not far behind as #2. These do flip flop when I am traveling for vacation, but time is still a huge driver. With an enormous priority on time I am often willing to pay a premium to fly Delta and the nonstop service to almost everywhere I want to go.

    Per my comment highlighted in the blog post above, when you travel frequently (25000+ miles a year) it pays to be loyal and earn status as it can help you when you need it most. When I say, “ when you need it most” is not a for better seat or bonus miles, it’s when irregular operations happen and you need to be rebooked. Often airlines prioritize who will get the last few seats on the next flight or rebooked to/via another city. I will take a middle seat in the last row if it means I getting to where I need to go. Some people would challenge me on that, but those people might not value their time as much others do. The duration of the flight might impact my decision, but going home, no way.

    For those who fly 1-5 trips a year (less than 25000+ miles per year, it is very nice to be loyal to a brand, but think about what YOUR cost of being loyal is. Does it make sense to pay more for your flight to stay on one carrier? I would say no, especially if you are traveling as a family/group. You have to decide what premium in fare you are will to pay to stay with one carrier when that airline’s fare is higher. Family of 4 traveling from PBI to SFO (currently nonstop service) that can save $75 per ticket flying another carrier should think twice about staying loyal and use the $300 savings to enhance their vacation experience.

    Everyone should fly the airline they want that makes the most sense for what you value most. A wise man once told me “It’s a bit difficult for an airline to be all things to all passengers. We fly for different reasons and are willing to pay, or not pay, for certain services (FC, exit row, meals, etc). ”

    From an airline marketing perspective, know who you want to be and go for it.

    Get out there people and explore. We are in the Golden Age of travel!

  3. Rene,
    I agree with Eric. Most fliers should be free agents. But that does not mean they should not give Delta special consideration because Delta is, simply put, the best domestic airline around.
    Where the major airlines are threatening their own bottom line is with the Credit Card situation. It is easy to find independent credit cards that offer 2 miles (cents) per $ spent. If the value of Skymiles, AAdvantage, Mileage Plus is less than 2 cents per $ spent, then that individual is better off as a free agent and using cards such as Capital One.
    Personally, I always get much more than 2 cents per Skymile. So I have the Delta Reserve Card, I’m Platinum, and I own Delta stock.
    And yes, if the value of Skymiles were increased to over 2 cents per Skymile for the general public, it would make sense for everyone to be loyal to Delta (especially because Skymiles do not expire)
    Just my 2-cents on the subject….
    Roamin’ Around

  4. @GoldboxATL – Txs but you again end with something that should send shivers into Delta hearts that is “what you value most”. If I were Delta’s CEO I would want every flyer to value Delta so much that there is always value even if the price is a little higher than the others. The loyalty program is a big part of that and I would argue even MORE for those who only fly a few times a year.

  5. Hi, Rene’s, I would be happy if Delta would go back to the pre-2016 1st Class Upgrade procedure. That is, stop selling them for as low as $75 (depending on the distance) and allow the “LOYAL” SkyMiles member receive the perk. I know DL Management thinks selling the 1st class adds to the bottom line, but it might be driving business away.

  6. @Rick – I would agree. Perhaps a bottom floor price for FCM should be set. Seeing sub $10 upgrades is crushing for loyalty

  7. As a family of 5, if i was traveling a few times a year, I would value my wallet more than any loyalty program. Saving a few 100 bucks on airfare trumps some points that will take a long time for me to see any real benefit. Most would agree!

    The free agents that end up on Delta a great for the bottom line and Delta is doing what they can to secure their business, but the HVCs and those the within the next tear are of more value.

  8. @GoldboxATL – You are making a guess under both your (new) points. If SkyMiles were valued more then I sure would pay a bit more for a family of 5 to always fly Delta.

  9. I live in VA, in reach of hubs for UA, AA, and WN, but choose to fly DL almost exclusively. UA at IAD is a trash airline, and AA isn’t much better. I won’t even consider WN.

    I choose to fly DL for the reliability, superior service, and the elite program. I’m the sort of elite that DL doesn’t want to lose. I’m not a hub captive, I have other (arguably) more convenient options, but specifically choose to fly DL (almost) every time. If Ed goes down RA’s path, however, it would be hard for me to stay. AA is often cheaper, and those non-stops (particularly to MSY) are very tempting. I have PM through 2017, but after that…

  10. In the previous 5 years I have flown Delta 98% and as a Diamond this year I have flown with them once (when everyone else was grounded by storms). I cannot even bother to use my miles this year. As every other airline is trying to descend to Deltas’ level of customer loyalty I am not sure what I will do next year but if nothing changes I will be flying Alaska as much as possible. I tried Frontier this year and for short flights I was pleasantly surprised, especially by the service and I like the little tray tables!
    Dumped all my Amex this year as well.

  11. Not everyone needs to fly up front for all their award flights. A lot of us value the amount of miles we have available to use and buy award flights in economy so we can go on more trips. I’m happy with the award flights in economy going on sale, and the width of the sale. I like going on more trips for free instead of less trips but flying up front. With how good of a sale this is it’s great for me and I’m sure a lot of people that would rather fly more for free. 10k RT on short haul flights is pretty awesome and I’ve booked a bunch, especially since I’m not used to seeing a sale this good being hub captive.

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