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During Morgan Stanley’s 11th Annual Laguna Conference today, Delta’s President, Glen Hauenstein, shared that the carrier has been doing a great job in monetizing its domestic First Class cabin. Last month, Delta sold over 74% of First Class seats.
With only 26% of seats (approximately one quarter) open for upgrades, there is not much room for frequent flyers to reap this benefit. This statistic is across all routes, so for business-heavy destinations, peak travel times, and popular leisure destinations, the number is likely closer to 0%.
No one should fault Delta for being able to sell its product. Over the past decade, it has figured out how to price the First Class cabin in a way that will drive sales. In 2011, only 14% of First Class seats were sold. Upgrades were plentiful and pricing was astronomical for the front cabin back then. Elite members getting complimentary upgrades will become a thing of the past in the near term.
With all of the changes announced yesterday around the SkyMiles program, one has to wonder how many people will actually take action. Will Delta’s moves kill loyalty? Will people actually cancel their American Express cards? Some will, but I think for many it’s just an opportunity to let off some steam. Delta has devalued its program before and it will do so in the future. There might be a tipping point, but I don’t think we’ve reached it yet.
Anthony’s Take: I gave up trying for upgrades long ago and have been buying First and Business Class seats for the past decade. I will continue to fly Delta because I like the service and the experience. The miles earned and other perks are a nice to have, but they won’t make me choose a carrier like they once did. I’ve been flying more Spirit Airlines and mixing in Delta and United. I’ll likely still hit Diamond Medallion this year and will also likely reach Premier Platinum (a far cry from when I was Global Services®). We’ll see what other changes come once United announces its 2024 program.
(H/T: One Mile at a Time.)
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