What you say is true. I'm a captive to Delta right now as they offer the best flight options to my current destination. On future project locations I would have always tried to fly Delta even if there were better flight options on other airlines available. There is no longer a reason for that to be the case. I'm not sure why they would even want to continue with the SkyMiles program. If I'm to believe all of the apologists throughout this thread, Delta apparently doesn't have a value in retaining their most frequent flyers.

Yes, you are correct again. It is best to approach any loyalty programs relationships as any other business transaction, i.e. not personally and with cold pragmatism. Many of us tend to get almost emotionally attached to our airlines, and it was a well calculated design which worked well, and is actually still working. We should not. Banal as it sounds, $$ rule the world, and air travel is a prime example. The painful reality is that most domestic legacies are in the same boat. Do what makes financial ($$) and business (time and convenience) sense to you, and do not base your decisions on "loyalty." It is an ephemeral concept to most domestic airlines, and certainly for DL.

No, there is still award redemption and preferred seating.

Perhaps the concept that Delta actually makes a profit on all the coach tickets I buy is alien to you. I'm not asking them to sell me tickets at a loss, but rather pointing out that giving me a free upgrade in order to retain a few thousand $ of my spending might well prove more profitable to them over the next few years than getting $50 cash now and losing that spending. Of course, for those who can't think past the next quarter, such reasoning won't matter.

On a competitive route, non-elites will fly the airline that s $4 cheaper, all else the same. DL can only get a price premium from elites or those who want status on DL.

On a non-competitive route, it's a different story.

A more appropriate scenario would be the Ford dealer says "If you buy 3 Fiestas in 2011, we'll give you a free 6-month lease on a Lincoln in 2012." Then they hit you with monthly advertisements until you succumb, and your three teen-aged daughters are driving new cars.

Then, you go into the dealership on March 31, 2012 to pick out your Lincoln, and you are told "No. We don't do that any more. Our T&Cs allow us to change our mind. Would you like to buy another Fiesta?"

changing cars in Kankakee
 

Or "None left. The last twelve people that bought Fiestas, we upgraded to Lincolns for $39, so we're out.

"We can give you one Tuesday night from 8-11 P.M., or Sunday morning 6-9 A.M., but you have to change cars in Kankakee."

I think all this FCM just goes to show how DL does think we are ham sandwiches. Which is more valuable to DL, making $20 off a first class seat or allowing a valued elite sit there. Hmmm....

If I were a typical "the world ends after the next quarter" MBA, I'd do the second. If I considered myself in it for the long haul, I'd consider the long-term effects of both, and start by stating the issue in unbiased terms. Then I'd consider what value I could get from a particular F seat: A. earn some amount of loyalty from someone who currently provides a lot of revenue to the airline, and is thereby made more likely to continue doing so in the future; figuring out the value of that is not easy; or B. earn a little bit of revenue now by selling the seat cheap and lose out on (1) continued sales from the ex-loyal ex-frequent (on my airline) flyer, and (2) the full F price from someone who would have paid it if cheap-F weren't available (times the probability that happens).

I can't figure out the values of the tradeoffs. I suspect DL is getting it wrong on the side of "cash now, in the long run we're all dead".

You're leaving out the effect of the 10 empty seats because kettles and corporate travel policies will send pax to the competitor who is $4 cheaper.

Then there's the fact that you've just pushed your captive hub from the 11th most expensive per seat mile to 10th, and being in the Top 10 has caused the local government to do all sorts of grandstanding investigations of your pricing, competitiveness, etc.

But if your argument were valid, why not do both?

Good analysis but may contain a flawed assumption. You assume that there will be hordes of "ex-loyal ex-frequent" DL pax. Fact is, FT is just a pimple in the FF universe and most FFers will accept changes and move on. That said, FF programs are cyclical -- they offer great bennies, then they get taken away as airlines tweak their programs. When they think it will bring in more revenue, only then do they increase FF benefits.

Also missing is that element of competition. Just a couple years ago, we had 6 legacies with lighter capacity. Today there are only 4 with very tight capacity, and only 2 with strong balance sheets. This is a supply-demand thing with the airlines in the driver seat for now. No doubt DL and UA will watch carefully to see what the other does and will make adjustments accordingly but it doesn't bode well for FFers in the short run.

The Truth!
 

Word. What he said +1.

Delta changes the rules of the game as they go along. Once you're on the hook and addicted to the MQMs, upgrades, free SC access and more miles than you know what to do with - BOOM! They make all of that available to the Clampetts (rich affluent Kettles) on a pay-as-you-go basis. So much for exclusivity that comes with status.

WOW sbj.....is that actual research, or something you just conjured up out of the blue?

I've had many airlines on which I am not Elite get a price premium based on such things as timing, lack of connections, better aircraft, etc.

DL can only get a price premium from elites or those who want status on DL.


I think the proper business term for that statement is hogwash.

If it does truly switch to a revenue-based earning plan, I would imagine the elites that get those F class seats will truly be valued members of the game. It shocks me that a site full of BUSINESS travelers are so fixated on a marketing scheme. There has to be more to your self-worth than a colored luggage tag.

What if DL allowed a fee-free change to P...then would you be interested in buying them? Your company picks up the K fare, you cover the difference to P. Then, DL gets revenue, your company gets the fare it wants, and you get the perks you want.

And again, in this case there is ZERO benefit to having status since anybody could buy up to P. Where are the 'perks' we want if we have to buy a F seat every time? There is no incentive or reward for loyalty. What about the increasing cases where P is cheaper than the Y fare? Will DL allow a buy up and then refund the difference?