Before we deep dive into this, a point of reference for this post.
I know many in the travel world are taking the stand of “now is not the time – yada yada” for attacking the airlines when their very survival is on the line. I mean, think of all the fine folks who work for the airlines.
My answer is there is a clear difference between the corporation Delta (and the other airlines) and the people.
If you have EVER read any of my posts here on the blog (and other places), you will see I am one of the biggest cheerleaders for Delta people.
But as for the company – I take them to task over devaluation after devaluation year after year. So keep that in mind.
With that out of the way, let’s look at the things Delta fears most — or should.
- $DAL share price (or even bankruptcy again). The other day, the wisest man, arguably, on Wall Street DUMPED 13 million shares of Delta Air Lines. YIKES! Since the “suits” at Delta are mostly paid with mega shares of Delta, this does not bode well for their paychecks this year — and beyond.
- ZOOM! With no one in their right mind getting anywhere near an airplane, video meetings have exploded. The really scary part, like in the iconic movie Up in the Air, companies may see there is much less need to keep reps flying from town to town to get their job done.
- Amex (i.e. Delta Amex cardholders). I have to tell you, I will all but certainly downgrade my Delta Reserve card to a Delta Gold card when the fee comes due. Why keep the card when Delta has already been kind enough to extend my status for all of 2021. Oooppsseeeee! 😉 As to Sky Club access, I have my non-Delta Amex Platinum card that gets me in when I fly Delta. I bet there will be many others who simply dump Delta Amex cards if they no longer fly Delta at all or due to the now really bat crazy insane 1/4 million spend number to be MQD Diamond exempt.
- Fear of flying. No, not the silly fear that the plane will go down (Delta does not fly the 737MAX after all) but the real and understandable fear of infection with a person sitting WAAAAYYY less than six feet from you. Until a cure or very reliable quick treatment is found, who will ever risk getting on a Delta jet – no matter how “clean” they get it (or try to).
- Unions. Delta pilots have been unionized for years. Let’s not forget, before the virus mess, Delta flight attendants were very close to also joining a union due to any number of issues – not least of which was/is the toxic uniform disaster. Delta, the company, does not want the nightmare of having to negotiate with flight attendants as a group rather than doing as they please with them one-on-one.
- Our budgets (company and otherwise). Not so long ago (you know, earlier this year), folks would simply spend cash or miles to upgrade to 1st class because the flights were all full and if you wanted first you paid for 1st (since they sold upgrades so darn cheap). After the pain of COVID19 we all may be looking a wee bit closer at the bottom line and not be willing to pay top dollar and especially so for C+ or Comfort Plus (middle seat anyone?)!
- Anger over “the new norm.” Once this is over, I mean not gone but mostly over, I have a feeling there will be a new norm when it comes to flying – whenever that is. I doubt things will ever be like the “good old days” of flying i.e. like last year! I also have a feeling folks will not be happy over the changes Delta makes whatever they are in regards to service and offerings and more.
- SkyTeam (and partner) impact. Delta, in it’s most recent cash buying burn, picked up 20% of LATAM airlines. They paid, get this, 1.9 BILLION for a 20% stake. Right now, the value of the entire LATAM company (at current share price) is less than 1.7 billion-ish. The point is, not just Delta is really hurting. How many SkyTeam airlines will fold or be so reduced that the partnership becomes all but pointless (not to mention the ability to spend our “valuable” SkyMiles for awards)?
- Costs! It is one thing to run a massive network of Sky Clubs when they are all packed and folks are even willing to, GULP, spend $39 for the privilege of a few hours with free cheap drinks and snacks. It is another to run the same network when they are half-empty (or worse). Let alone the fact that Delta also owns an oil refinery that keeps hemorrhaging cash. Boy, did the Delta CFO pick a good time to retire (at the end of February no less).
- Lastly, the press (and blogs). The COVID19 news is 24/7 and will one day be less so. Then the news, and the blogs, will turn their full attention back to all things travel and see how well (or badly) the recovery is. I have a feeling the coverage will maybe be less than positive for a long time to come.
Well, that is my list of things that I am sure will keep Delta VPs up at night. All are likely to have a huge impact on what Delta looks like a year or two from now. I am really looking forward to Delta returning to the airline they were a decade ago when they cared about loyalty and frequent flyers. Maybe, just maybe, they will again.
Then again, maybe not.
What do you think?
(disclaimer: neither Chris or I own or plan to own any airline stock in the foreseeable future)
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