Delta high pricing strategy backfiring at our company!
#1
Original Poster
Join Date: Jun 2019
Posts: 5
Delta high pricing strategy backfiring at our company!
Delta has been selling tickets higher than most competitors and letting seats go empty. Believing that they are more profitable selling fewer higher priced tickets than selling more reasonably priced tickets. They are targeting the business traveler, thinking companies are less concerned about price. Our parent company of over 94,000 employees has announced that the travel department will no longer be using Delta unless there is no other carrier on that route. Hopefully, other companies will do the same and stop being bullied by Delta!!
#3
Join Date: Feb 2017
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Posts: 2,994
I believe any company should be happy to pay an extra 5-10% on fares (in aggregate - some routes are worse of course) to fly Delta given the significantly higher probability of actually arriving at a destination on time (or at all in the case of American) than certain other network carriers.
#4
Join Date: Jan 2016
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#5
Join Date: Sep 2016
Location: LAX/BUR, RDU
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I'm sure Delta is a cheaper carrier on many routes, and has full flights. By all means, choose carrier based on price if that's what you value -- I do. But saying that DL is bullying corporations is a bit absurd.
#7
FlyerTalk Evangelist
Join Date: Jul 2003
Posts: 23,051
94,000 employees is bigger than Delta (86,564). So who's the bigger bully here? I'm assuming there's a corporate contract in place with that many employees (unless the company does limited travel)? Perhaps someone just underbid DL. Such contracts come and go, no need to take it personally.
#8
Original Poster
Join Date: Jun 2019
Posts: 5
It's not a secret, Delta has announced this is there new strategy. And it has been working for them over the past year. Unfortunately, business people have to schedule last minute flights. And Delta believes this is a way to raise profits, not sure it is sustainable though.
#10
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Join Date: Dec 2011
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Not a DL fan boy/girl here by any means but I think your CFO signed a new deal with UA or AA at a corporate level and is dictating so they get all the extra free flights and kick backs for driving all business travel to a different airline. 99% of companies would pay any airline a little more if it meant it was a cheaper trip overall (Taking lets say UA from EWR-SFO vs DL or AA means the employee might spend $100 more round trip but will offset the car rental, food, hotel, etc of an additional night on the road)
Also where are all these empty seats on DL? I clearly fly all the wrong routes because I have not seen a flight NOT COMPLETELY full in I dont know how long.
Also where are all these empty seats on DL? I clearly fly all the wrong routes because I have not seen a flight NOT COMPLETELY full in I dont know how long.
#11
FlyerTalk Evangelist
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Location: Brighton. UK
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sounds like your company has a new corporate travel contract.
There are several factors in deciding who to contract with including route network, price and discounts based on number of tickets sold and price of said tickets. Factors such as tickets being fully refundable that don't apply to normal ticket buyers can also be included.
Also many airlines last minute ticket prices are significantly higher than those bought in advance not just DLs
And DL could just have easily tuned down the contract based on it not making them a profit.
There are several factors in deciding who to contract with including route network, price and discounts based on number of tickets sold and price of said tickets. Factors such as tickets being fully refundable that don't apply to normal ticket buyers can also be included.
Also many airlines last minute ticket prices are significantly higher than those bought in advance not just DLs
And DL could just have easily tuned down the contract based on it not making them a profit.
#12
Original Poster
Join Date: Jun 2019
Posts: 5
Okay, no need to respond to this post anymore, sounds like most are Delta employees. I am not taking this personally, it doesn't effect me that much I am one who does NOT have to fly as much as others in my company. Just thought it was interesting, after I noticing this recently when flying for leisure. My wife does travel often and wanted to only fly Delta on our vacation because of her status. But, after showing her the price difference on another airline for the same flight, we flew the other airline. Then getting an email from my companies travel department regarding the same issue I thought it would be interesting to share.
That's it.
That's it.
#13
A FlyerTalk Posting Legend
Join Date: Dec 2000
Location: Shanghai
Posts: 42,031
Okay, no need to respond to this post anymore, sounds like most are Delta employees. I am not taking this personally, it doesn't effect me that much I am one who does NOT have to fly as much as others in my company. Just thought it was interesting, after I noticing this recently when flying for leisure. My wife does travel often and wanted to only fly Delta on our vacation because of her status. But, after showing her the price difference on another airline for the same flight, we flew the other airline. Then getting an email from my companies travel department regarding the same issue I thought it would be interesting to share.
That's it.
That's it.
#14
Suspended
Join Date: Dec 2011
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You caught me, DL employee here. I was the one in charge of the ATL servers overnight in August of 2016. Amazing I still have my job honestly!! (especially after the outage cost over $150 million to the company)
I really should not spill my extra extra extra large QT Coca Cola on servers but I tripped.... I MEAN IT WAS GEORGIA POWERS FAULT yeah yeah thats it....
I really should not spill my extra extra extra large QT Coca Cola on servers but I tripped.... I MEAN IT WAS GEORGIA POWERS FAULT yeah yeah thats it....
#15
Join Date: Feb 2012
Location: STL
Programs: DL DM; HH gold
Posts: 554
It is simple (actually, very sophisticated) revenue management. DL thinks it can sell its seats for more, and until proven otherwise it will continue to do so. 90k+ employees is nothing to sneeze at, but how many of those really travel enough to make dent on the scale of DL's financials?
Don't get me wrong, I also find it annoying. I've been watching a Saturday-Saturday trip STL-PVG in August for a while now and DL is consistently $1,000+ higher for a business fare vs. AA and UA. This is the case for every Sat-Sat trip before and after the week I'm targeting. I really want to fly DL, but I'm not going to have my employer cough up an extra $1k so I can fly DL. So unless they change, they will lose that ~$10k ticket to AA, but if DL can make that money by selling other fare combos, good on them.
Don't get me wrong, I also find it annoying. I've been watching a Saturday-Saturday trip STL-PVG in August for a while now and DL is consistently $1,000+ higher for a business fare vs. AA and UA. This is the case for every Sat-Sat trip before and after the week I'm targeting. I really want to fly DL, but I'm not going to have my employer cough up an extra $1k so I can fly DL. So unless they change, they will lose that ~$10k ticket to AA, but if DL can make that money by selling other fare combos, good on them.