fti

I am sure DL would never pay for that

keloutwest

Actually I'm dead serious. Load factors may be at a record, but that says nothing about what potential there is for Delta should they introduce a competitive redemption program. I went with Chase instead of Amex because I realized that every time I wanted to fly somewhere free, DL didn't have low (i mean Saver)available whereas UA did. I fly paid DL for the better experience and maintain my plat status only, but use my CC points and fly UA or *A.

AA_EXP09

Let's say there is a DL elite.
AA has a ticket for $299 rt
DL has a ticket for $349 rt
Both the tickets are to the same destination
This elite buys the $349 ticket for elite benefits and a potential UG to F, rather than saving the $50 and flying on AA (despite a 17% difference in the two prices.)
Therefore, the $50 was derived from our loyalty to DL rather than price (for which there was a cheaper option.)

TrojanTraveler

I have experienced this often, and have indeed bought the more expensive DL ticket. Folks I know do the same. It seems that for leisure travel, we'll accept a larger fare difference than for business travel, but that's mostly because the corporate travel policies will "allow" only small price differences (even if the official policy is lowest price).

Here's an example for a trip to ORD I'm considering:

American Airlines $340 UNITED $342 US Airways $368 Delta $403

These are for flights pretty much at the same time. (Well, Spirit is a lot less but I'm not flying them)

javabytes

Using that logic, one could argue DL derived $349 from loyalty, as if it weren't for that loyalty, the ticket would have been booked on AA = $0 for DL.

pbarnette

So DL is losing the business of flying passengers for free? That would seem to be intentional, no?

tmontemb

Always factor in bag costs if you must check. Sometimes it is unavoidable! But those can immediately negate a $50 fare difference.

pbarnette

But that doesn't last over any meaningful length of time.

If DL consistently priced their ticket at $349, then no non-elite would ever buy the DL ticket, unless DL offered $50 extra value to the non-elite. Barring filling the entire plane with elites, your loads would suffer and DL would have to lower their price. Of course, if DL fills the entire plane with elites, then the value of the elite benefits (priority baggage, check-in, and boarding, not to mention upgrades) begins to approach zero and elites will defect.

You simply can't consistently charge elites more than you charge non-elites. Period.

CPMaverick

United and AA have called their 50k awards 'Standard' for years. Hard to fault that terminology.

lamont2718

Your post assumes perfect competition. Of course that assumption is hardly true in this industry. Thus the term "hub captive".

fti

Actually that poster makes many assumptions, 99.99% of which are biased to DL, an airline that in his eyes can do no wrong

eturowski

I always use this as a bargaining chip when booking travel for work, especially for long trips or trips for which I am required to bring something large with me. I have pretty good results; we don't use a prescribed travel portal.

javabytes

Except AA doesn't.

pbarnette

I was responding to folks that were saying that loyalty causes people to pay more for the same product. A nonstop is not the same product as a connection. Most of the "hub captive" premium can be much more readily ascribed to that difference than any gains from loyalty.

I am no more assuming perfect competition than are the folks asserting that loyalty = higher prices. The specific example I responded to certainly assumes that the products are identical.

Might I ask what sort of causal models you might suggest that would adequately explain the impact of differences in loyalty on spending without controlling for things like product or schedule? Might I also ask whether you believe that non-elites are also more "loyal"? If not, then how would an airline ever be able to price their product such that non-elites don't pay a loyalty premium, but elites do?

flyerslc

I am sure the Delta fanboys will give me condescending lectures on my lack of understanding of the term, but I think the feeling of many us is that the "goodwill" of the Delta brand is being eroded by their recent and continuing practices. That goodwill in large part derives from the reputation and brand loyalty engendered in its longterm customers over many years by past management. I cannot argue with how they choose to run their business. I can only vote with my feet and my dollars, and that only to a limited extent, living in a hub and with US airline industry being an oligopoly.