Skymiles Change Rumor?
Mar 25, 2012, 10:36 pm
#1156
Join Date: Nov 2010
Location: Planet Earth
Programs: | *G | STE | HGP ♦ | SPG Au | MR Au
Posts: 3,772
I largely agree with what you wrote, until we get to this line.
The thing is that the reality of the situation is exactly the opposite- the seats will fill with or without you, they will not fill without all of us. That means they will have to keep reducing gauge, frequency, and routes.
Won't that eventually force even you to seek another option?
(Not to mention the shareholders will revolt if Delta continues shrinking while other airlines are growing...)
The thing is that the reality of the situation is exactly the opposite- the seats will fill with or without you, they will not fill without all of us. That means they will have to keep reducing gauge, frequency, and routes.
Won't that eventually force even you to seek another option?
(Not to mention the shareholders will revolt if Delta continues shrinking while other airlines are growing...)
Delta, IMHO, is making a calculated bet that FTers and MRs have negligible contribution to top line and bottom line.
I have said before, DL can probably fill my seat on a plane easily. But what I can't say is that they can fill the seats enough to make flights turn a profit if they alienate the savvy traveller, and that in turn will raise the fares on you last minute flights.
Mar 25, 2012, 10:39 pm
#1158
Suspended
Join Date: Dec 2010
Location: LAX
Programs: DM
Posts: 1,067
I largely agree with what you wrote, until we get to this line.
The thing is that the reality of the situation is exactly the opposite- the seats will fill with or without you, they will not fill without all of us. That means they will have to keep reducing gauge, frequency, and routes.
Won't that eventually force even you to seek another option?
(Not to mention the shareholders will revolt if Delta continues shrinking while other airlines are growing...)
The thing is that the reality of the situation is exactly the opposite- the seats will fill with or without you, they will not fill without all of us. That means they will have to keep reducing gauge, frequency, and routes.
Won't that eventually force even you to seek another option?
(Not to mention the shareholders will revolt if Delta continues shrinking while other airlines are growing...)
Mar 25, 2012, 10:43 pm
#1159
Join Date: Mar 2011
Programs: Delta Ballast Medallion, Card Carrying Honorary KM
Posts: 553
Mar 25, 2012, 10:56 pm
#1161
Join Date: Nov 2010
Location: Planet Earth
Programs: | *G | STE | HGP ♦ | SPG Au | MR Au
Posts: 3,772
I largely agree with what you wrote, until we get to this line.
The thing is that the reality of the situation is exactly the opposite- the seats will fill with or without you, they will not fill without all of us. That means they will have to keep reducing gauge, frequency, and routes.
Won't that eventually force even you to seek another option?
(Not to mention the shareholders will revolt if Delta continues shrinking while other airlines are growing...)
The thing is that the reality of the situation is exactly the opposite- the seats will fill with or without you, they will not fill without all of us. That means they will have to keep reducing gauge, frequency, and routes.
Won't that eventually force even you to seek another option?
(Not to mention the shareholders will revolt if Delta continues shrinking while other airlines are growing...)
To make matters worse, DL is one of the more expensive domestic airlines in the US. Their international fares ex-asia are by no means cheap. I can attest to that as a former shopper. That is why I avoided them in the past until I made elite.
Plus there is a difference between sustained revenue vs one time extra ordinary revenue.
Mar 25, 2012, 10:58 pm
#1162
Join Date: Nov 2010
Location: BDL/HPN/JFK/FLL
Programs: DL Diamond Ham Sandwich
Posts: 1,051
An airline carefully modulates the fare available to capture as much excess rent as possible. This, as others have pointed out, is a market dealing with a perishable product.
If you take a confirmed butt out of the seat on a flight you lower the market clearing price for that flight. Delta will need to charge lower fares to attract an extra person.
At a fundamental level what all the 'LUTs lose Delta money' people are confusing is average total cost vs marginal cost, and what that means. So long as the marginal cost is below the fare the airline makes money off your seat. However the airline doesn't profit until they exceed their average total cost for all the seats on a flight.
A LUT fare may well be below the ATC for a flight but be profitable for Delta. And for every person you take off of the plane the overall revenue of the flight drops- even if you backfill the seat you had to lower the average fare to do it.
Mar 25, 2012, 10:59 pm
#1163
Join Date: Sep 2006
Location: LAX
Posts: 1,208
How could DL completely overhaul Skymiles without AF/KLM (and other SkyTeam airlines) doing the same? Moreover, why would DL want to significantly devalue Skymiles given that UA and AA arguably already have better redemption programs? 
This is like "weapons of mass destruction" in Iraq.
This is like "weapons of mass destruction" in Iraq.
Mar 25, 2012, 10:59 pm
#1164
FlyerTalk Evangelist
Join Date: Oct 2001
Location: check swarm
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Posts: 14,404
Usual DL sources haven't been this dead silent in ages; I think we're within days/weeks of this announcement vs months.
Mar 25, 2012, 11:05 pm
#1165
Join Date: Jan 2010
Location: Twin Cities
Programs: Delta DM MM, IHG Plat, Hilton DM, Marriott SE, Emerald EE, Oakdale Gun Club, NRA & GOA Life Member
Posts: 3,870
I agree.
Delta, IMHO, is making a calculated bet that FTers and MRs have negligible contribution to top line and bottom line.
I have said before, DL can probably fill my seat on a plane easily. But what I can't say is that they can fill the seats enough to make flights turn a profit if they alienate the savvy traveller, and that in turn will raise the fares on you last minute flights.
Delta, IMHO, is making a calculated bet that FTers and MRs have negligible contribution to top line and bottom line.
I have said before, DL can probably fill my seat on a plane easily. But what I can't say is that they can fill the seats enough to make flights turn a profit if they alienate the savvy traveller, and that in turn will raise the fares on you last minute flights.
Look at the Pretty Much Anywhere In The US-HND fare after the nuclear meltdown last year. Delta dropped the price down to $585 to fill seats because nobody wanted to fly to Tokyo but Delta had a commitment to fly those two routes (LAX&DTW-HND). That fare ran for about a day and a half before RM decided they had filled the planes to enough capacity to offset those fliers who wouldn't fly to Japan because of the reactor problem.
A buddy and I jumped on that fare and went on a mini vacation to Tokyo. The flights there and back was full and when other pax found out what we paid, they were beside themselves. I guess we FTMR folks burnt up all the sLUT fares and everyone else who booked after the sale paid regular or higher prices. I can't see DL wanting to discourage this sort of thing in the future because it helps their bottom line.
Mar 25, 2012, 11:09 pm
#1166
Join Date: Nov 2010
Location: Planet Earth
Programs: | *G | STE | HGP ♦ | SPG Au | MR Au
Posts: 3,772
An airline carefully modulates the fare available to capture as much excess rent as possible. This, as others have pointed out, is a market dealing with a perishable product.
If you take a confirmed butt out of the seat on a flight you lower the market clearing price for that flight. Delta will need to charge lower fares to attract an extra person.
At a fundamental level what all the 'LUTs lose Delta money' people are confusing is average total cost vs marginal cost, and what that means. So long as the marginal cost is below the fare the airline makes money off your seat. However the airline doesn't profit until they exceed their average total cost for all the seats on a flight.
A LUT fare may well be below the ATC for a flight but be profitable for Delta. And for every person you take off of the plane the overall revenue of the flight drops- even if you backfill the seat you had to lower the average fare to do it.
Said what I thought and wrote it in jargon.
What many uhvc fail to realize is an airline requires economy of scale to run successfully.
They think they should be riding a "limo" but in fact they are riding a "bus".
If you think you are all that get a private jet.
Mar 25, 2012, 11:20 pm
#1167
Join Date: Feb 2008
Location: CMH
Programs: Delta Gold Medallion
Posts: 628
That said, the silence is deafening, and yet questions are being answered regarding boarding door use. Diversion?
Mar 25, 2012, 11:21 pm
#1168
Join Date: Nov 2010
Location: Planet Earth
Programs: | *G | STE | HGP ♦ | SPG Au | MR Au
Posts: 3,772
I agree.
Delta, IMHO, is making a calculated bet that FTers and MRs have negligible contribution to top line and bottom line.
I have said before, DL can probably fill my seat on a plane easily. But what I can't say is that they can fill the seats enough to make flights turn a profit if they alienate the savvy traveller, and that in turn will raise the fares on you last minute flights.
Delta, IMHO, is making a calculated bet that FTers and MRs have negligible contribution to top line and bottom line.
I have said before, DL can probably fill my seat on a plane easily. But what I can't say is that they can fill the seats enough to make flights turn a profit if they alienate the savvy traveller, and that in turn will raise the fares on you last minute flights.
Look at the Pretty Much Anywhere In The US-HND fare after the nuclear meltdown last year. Delta dropped the price down to $585 to fill seats because nobody wanted to fly to Tokyo but Delta had a commitment to fly those two routes (LAX&DTW-HND). That fare ran for about a day and a half before RM decided they had filled the planes to enough capacity to offset those fliers who wouldn't fly to Japan because of the reactor problem.
A buddy and I jumped on that fare and went on a mini vacation to Tokyo. The flights there and back was full and when other pax found out what we paid, they were beside themselves. I guess we FTMR folks burnt up all the sLUT fares and everyone else who booked after the sale paid regular or higher prices. I can't see DL wanting to discourage this sort of thing in the future because it helps their bottom line.
But, let me ask you this. If delta introduce this new points system with that fare. Would you have flown? ( I also recall you earn double miles on that flight!)
I won't unless it yields me either the same or high ROI.
Last edited by DHalltheway; Mar 25, 2012 at 11:27 pm
Mar 25, 2012, 11:48 pm
#1169
Join Date: Jan 2010
Location: Twin Cities
Programs: Delta DM MM, IHG Plat, Hilton DM, Marriott SE, Emerald EE, Oakdale Gun Club, NRA & GOA Life Member
Posts: 3,870
Loving mr is the politically correct thing for dl to say.
But, let me ask you this. If delta introduce this new points system with that fare. Would you have flown? ( I also recall you earn double miles on that flight!)
I won't unless it yields me either the same or high ROI.
But, let me ask you this. If delta introduce this new points system with that fare. Would you have flown? ( I also recall you earn double miles on that flight!)
I won't unless it yields me either the same or high ROI.
Mar 26, 2012, 12:08 am
#1170
Join Date: Apr 2007
Location: SFO
Programs: UA Silver
Posts: 1,155
As a purely business flyer who spends north of 100K annually, Delta offers what flyers like me need most, Reliable comfortable travel from point to point, and the ability to get me where I need to be when things go sideways. Second to that is hassle free travel and customer service. Delta does both better than any other domestic airline. I can choose any airline I wish, and do keep status on UA.
I fly paid last minute business 99% international so many of the perks that are causing the handwringing in this thread are meaningless to flyers like me, which are the HVC's Delta is after and the rest of you are going to fall in line behind. If there's any truth to this thread, Delta is going after the high margin traveler and is more than happy to let the LUT fare, mileage runners,and double mqm flyers make a hard choice. The seats are going to fill with or without you. Flyers that are BIS 125k minimum flyers are going to do well under the new supposed program, and if a bunch of you leave, all the better.
There airlines are sick, and have been for years. It looks like Delta is done playing the zero sum game with the other airlines and is going a new route.
I fly paid last minute business 99% international so many of the perks that are causing the handwringing in this thread are meaningless to flyers like me, which are the HVC's Delta is after and the rest of you are going to fall in line behind. If there's any truth to this thread, Delta is going after the high margin traveler and is more than happy to let the LUT fare, mileage runners,and double mqm flyers make a hard choice. The seats are going to fill with or without you. Flyers that are BIS 125k minimum flyers are going to do well under the new supposed program, and if a bunch of you leave, all the better.
There airlines are sick, and have been for years. It looks like Delta is done playing the zero sum game with the other airlines and is going a new route.
- If you don't care about redeeming miles, then that won't make a difference. Since you almost always purchase J/F, elite status doesn't matter.
- If you care about redeeming miles, the rumor is that under the new program, a BE award ticket will be 300K miles, instead of 120K. Are you still sure you are going to be better off?