Delta CEO Believes Carrier’s Quality Trumps Price
Jackie Reddy June 09, 2016
Ed Bastian has taken a good, hard look at his operations and sees points worthy of praise as well as areas for improvement.
It’s the experience that counts. This is what Delta Air Lines CEO Ed Bastian believes, and he’s doing his best to convince passengers to choose the carrier not simply for price but for quality. While Delta has put considerable investment into business class operations over the last few years, Bastian is keen to ensure that the carrier doesn’t miss the opportunity to attract a new generation of travelers.
With this in mind, Bastian is keen to engage millennials, even if he’s not quite sure how best to do it. Speaking to USA Today, he said that this group is the carrier’s, “next generation of customers and by 2020 that will be half of our employees.”
But the biggest changes have happened on the tarmac, with the carrier recently renovating the interiors of its craft. But not only does it look good, it performs well; indeed, across its mainline fleet, Delta boasts one of the best on-time records within the industry. As of last week, the carrier’s mainline fleet has had 95 days without a cancellation, but when its regional code-share partners are taken into consideration, that figure drops to 29. This is where Bastian sees room for improvement.
While Delta is working with regional operators to improve performance, Bastian explains that he is not averse to using stronger tactics to get results.
“We pay for performance. There are financial penalties when they can’t deliver,” he told the paper.
To this end, Delta has already moved many of its regional flights to its mainline fleet and has jettisoned a number of its 50-seat jets in the process.
At present, with a market value nearly equivalent to the combined might of American and United airlines, Delta looks secure.
The only conceivable threat to Delta’s growth is the price of oil, which has nearly doubled from $26 per barrel to almost $50. But Bastian is cool-headed is this regard and says that any increase would, “require the airlines to think about how they will cover that cost, through pricing, through segmentation, merchandizing, ancillaries. There are a lot of tools that we have.”
[Photo: Delta]
Mr DL CEO, if your product and service are nice, customers will come naturally, even at extra cost. No need to convince us with fancy (and expensive) advertisement. It's time you understand that.
we left United after years with Continental, being 1Ks forever and a million miler. a family member got very ill and I had to change my travel to be more available. DL waived change fees and helped me rebook at the best pricing possible. Flights are good. Flight staff is nice. Equipment is pretty good. But the on the phone customer service is AMAZING! I often pay more for DL flights. If it's a little more, I opt for DL. But sometimes it's alot more. I have vowed not to got back to UA, but when a promotional flight pricing from EWR (my home airport) is half DL's price, it's a tough choice. I fly from inconvenient airports (LGA and JFK, instead of my home EWR), put up with AF/KLM attitudes when stuck on flights not serviced by DL, don't mind paying a little more. But please, understand that the reduced skymiles perks and tricks on upgrades to EC (even for Plat/soon to be Diamond) also count. You have my loyalty. But don't rely too much on "quality" unless there really is a difference and the pricing is competitive. Thanks for the great service.
Isn't this only a temporary benefit? Aren't Delta's domestic competitors trying to catch up to Delta (such as United just announcing Polaris)? Delta's big advantage is that it got its merger over with first, but in time all the other carriers will have their mergers further behind them too.
DL & B6 get the majority of our office's travel budget...mainly for quality. When IRROPs happen, they seem to handle it the best. Both airlines have arguably some of the least-rewarding frequent flyer programs, but we value our experience over wallets. I'd like to see Delta create a true premium carrier across the board -- ditch all the nickel-and-dime fees and just call it a premium product, include a bunch of things, and be done with it. Bring meal service back to coach. It doesn't have to be elaborate. Also, it'd be great if Delta focused on the entire experience, curb-to-curb. I know there are limitations when dealing with airports & such, but this is where companies like Tesla and Apple are getting it right. They handle every aspect of the experience and are able to control it to their standards. And of course, charge for it. If a DL flight is $50 more on a $500 ticket and DL was a noticeable cut above the other carriers, we'd book DL despite the price difference.
I would say that Japan Airlines is worth the extra price for coach passengers, but Delta? Not at all.