The way i read it, it was $675M per year - so we are looking at $2.7B. Thank you AMEX

And the New Platform is NOT going to be an award engine. That makes DL no money. It will have up-sells, cross-sells (cars, hotels, living social, sky store, skymall, gogo, meals, you name it), re-sells, and anything else that generates cold hard cash. The marketing section went into more grand plans of making delta.com a larger store, not a more customer-friendly or less error-prone award and revenue booking engine.

I think generally there will be a couple of seats left on each flight and the lucky DM will get them. Without the UGs (on any airline) There will be absolutley no reason to take a connection when you can fly direct (if loyalty does not matter). Delta has a pretty strong network but UA/CO has a bigger one. That seems to me like a stagnant, boring, growth-free business model. So for all MBAs eating ham sandwiches can pop their rotator cuffs patting themselves on the back for finding a way to completely stagnate growth but be more profitable doing it..at some point that will not cut it.

Look at the various airline forums on FT. Very few of the regular posters on any US airline forum focus on price. They focus on connections and convenience. Even if the loyalty programs are gutted to the bone, most frequent flyers will not buy on price. It is the leisure travelers who generally buy on price.

Bingo... many elites fly DL because of the domestic upgrades. Keep reducing those and you see that the rest of the program is bottom-in-class compared to other airlines and the reasons we've been given for other parts of the program being poor (like SWUs etc) is because of the domestic upgrades. Well, that argument is going out the window.

Yes it was their numbers but in classic fresh-out-of school MBA fashion they are missing a HUGE point:

For "elites to be more likely to pay" they HAVE TO BE ELITES ON YOUR AIRLINE. If they gut this thing so bad that people fly on convenience and price then their "pool" of elites likely to pay will not be there in a few years. THAT is not sustainable because as we all know, the vast majority of business travel is paid by the employer who will not pay one penny more than necessary.

I think Delta must be recruiting newly minted MBAs with no real world experience....

And I agree with that statement. I am not that price sensitive as long as I am reasonably sure of an upgrade. However, should my upgrade percentage drop noticeably in 2012, I will fly less on DL and take whoever is cheapest/most convenient. It's that simple. They created this monster, and they are going to have a heck of a time getting rid of it.

FTR, I'm including time/convenience into price. I don't expect someone to fly WN LAX-LAS-PHX-BNA-TPA-ISP to save $43.

What I've heard about the new Delta.com (secondhand information, so take from it what you wish):
-It will be a complete backend system "redesign"--I don't know exactly what it entails, but it will help them market their new products, provide upsells, etc. However, I assume (key word--assume) that this new backend system will help with the revenue/award booking processes as well. Some of Northwest's systems will also be coming into action as well.

-Airport agents will also be getting a completely new system (I believe called SNAPP) that is much more like a website rather than a command line--they won't have to deal with DLTerm (the current command-line interface) as much anymore, and SNAPP also includes a redesign of DLTerm's backend systems (going along with the new Delta.com).

-Expect some of these improvements to start in April/May, and to be mostly complete by September-October (this time frame could change).

Remember, all of this stuff is subject to change and I could be wrong. I don't work for DL and am not involved with any of this stuff, I've just posted some of what I've heard from DL employees :D

Yes, this is what the article says, but it's not reality (in my opinion). I will never forget 10 years ago or so the excitement with AirTran offering $50 business class upgrades per segment plus 2 free drinks. The people at the airport who were excited about those upgrades were clearly the kettles who had never sat in F before. I think Avid is likely right that there will still be a couple of seats left in F on each flight released for BF UGs but the end result is that when historically the UG list showed No. 5 of 52 for 6 seats remaining and you go the seat and now you don't because there are 2 seats remaining, the anger in the top tier elite HVC base you cater to is going to be pretty ticked off!

This is the MBAs blind spot. Yes, if you are are flying DL exclusively you are willing to pay a reasonable up-charge for the guaranteed seat (FCM) or even a slightly higher far-out fare if you have a good shot at an UG. That assumes, however, that you ARE flying DL exclusively and if they take apart the UDU program they better make sure they have something else that will make people want to pay a little extra to fly DL. The product is good but frankly it ain't that much better, and in some cases worse than other US carriers. The whole idea of up-selling to your loyal customers is great as long as you have them to sell to...@:-)

And for anyone who says that you cant get a FC seat for the price of a P fare (FCM) a week out...they are nuts. You can and I do all the time.

+1. Aviation analysts usually cite that a typical breakdown for a legacy is 60% of the customers are leisure and they account for 40% of the revenue. The other 40% is Business/FFP and they account for 60% of the revenue, typically at a higher margin.

The FFP program itself is usually far more profitable than the airline itself. In fact one study showed that if you sum up all the profits and losses from all the the airlines post deregulation the result is an overall loss.

Bingo. That then opens the door to another airline offering a better shot at the UG and we end up right back to where we are today eventually. The one thing that remains constant (albeit diminished at this particular point in history) is competition. If there are a bunch of people who spend a lot of $$ every year then somebody will figure out how to make them happy. Instead of leading the charge and finding a better, more creative way to manage UDUs Delta chooses to follow the pack down. At some point the US airline love-in will end and one of their competitors will find a way to make it work.
So basic but so hard to see when every decision is made by an accountant (no offence to the accountants on the board. You are critical to a businesses success but VISION drives growth and that does not have a column on the balance sheet)

Except it is reality according to Delta. Most of the upsells to F on P fares are from Medallions.