RobertS975

The airline business is notoriously cyclical, as we all know! In a bad downturn, an airline can (and has) lost more money in a year or two than it has made in previous decades all together! Well, after Delta has basically given its top 15-20% of customers the middle finger, they had better watch out when the next downturn occurs as it inevitably will. The airline will not have a large Cadre of loyal customers to fall back on.

I am more interested in burning than earning right now.

DrMilano

We as the taxpayers will just bail them out with a grant loan, as Delta will claim they are an national interest essential transportation service and 'too big to fail'.

As you're not happy with the 9/14 changes, make sure your member of congress is aware of this.

sydneyracquelle

Uncle Sam always comes through.

Goodoldflyer

I'm pretty sure a government bailout of a transportation company isn't contingent upon rewarding frequent users with free benefits.

Given the comments on this site, loyalty is pretty transactional.

busdriver11

What do the airlines have to worry about in a downturn? They've already shown that no matter the administration, the unions can yell loud enough and get billions of taxpayer dollars thrown at them, to pay people as much as hundreds of thousands of dollars to stay home. And give workers years of pay and benefits to retire early so, you know," when travel demand comes back, we'll be ready for it". Nothing like paying people to retire early to prepare you for increased travel demand, right? Can anyone say "pilot shortage"? They aren't going to take their record profits and pay off debt or save it for a rainy day, because you and me are going to save them. Stock buybacks are around the corner, because it's all about the investor and top management incentives.

WillBarrett_68

This is exactly what Delta wants. Right now the market conditions are such that they don't feel like they need to give a bunch of perks because the planes are full of price-insensitive travelers who don't even demand perks or butt-kissing.

The market will of course change and what your analysis is missing is that Delta can change their program terms to accomodate those future conditions.

jetsfan92588

Stock buybacks are essentially just dividends that the company isn't nervous about maintaining for the entire future of the company. The airlines are doing well. They can distribute some of the earnings to their shareholders. Why is there so much negativity around buybacks but nobody is losing their cool over Pfizer's dividends.

busdriver11

If you are throwing billions of dollars into stock buybacks, who does it help except for the investors and top management whose bonuses are tied to metrics based upon share prices? Does it help the long term viability of a company? When the economy goes south (as it always eventually does), how do those stock buybacks (and pumped up dividend payments) help the company stay afloat?

For example, there is one company now that's being affected by the economic downturn, FedEx. They are doing massive amounts of cuts, and laying off employees like crazy. Yet they are still doing billions of dollars of stock buybacks and pumping up the dividends. Instead of using their profits to pay off debt, provide better service for customers, and incentivizing employees to do the best job possible, it's all about the short term investor (and of course top management pay). Would any of us actually run our personal businesses like this?

And if things get really bad as they did in Covid years, the passenger carriers can just run to the taxpayers with their hands outstretched, begging for more money. Wouldn't you like them to save some of their billions so we don't have to do this again when the lean years come?

sfozrhfco

...and then DL will carry forward the losses for years and not pay taxes on the billions they earn after that

amieuro

Exactly. If need to be let's say later in this decade, due to dissapointing profits , Delta needs to entice the masses back to Skymiles all Delta's marketing department needs to do is roll out enticements and perks and people will come running back.

IAH-OIL-TRASH

I think the top 5-10% are actually fine/unaffected with/by the changes. DL (and all airlines) want/love the customers who fly 7 times a year to Europe at $5k/pop, occuying DL seats 14 times. But they'll tolerate those who get to 35k MQD via 20 4-segment trips, occupying 80 seats over the year. Most people fuming at the changes are not in the top 5-10% of DL's flyers (even though they would like to think they are). That being said, yes - a downturn would result maybe in some MQD promotions, lower airfares, maybe an uptick in upgrades.

Yeah - DL is squeezing the mid-level SM flyers big time. Those are the ones crowding the Clubs and expecting the world. DLs' trying to get more revenue out of them (and/or spend less on their FF benefits) - that's obvious.

All 3 legacy airlines are weening the mid-level flyers right now. Most of the benefit changes are gradual - DL's is just a bit abrupt.

DrMilano

It�s probably less than the top 5% affected.

StevenSeagalFan

�The second we save someone a penny they�ll come crawling back� - Ben Baldanza former CEO of Spirit

its true, consumers have short term memories and the second delta saves you a few bucks or throws a few perks, they�ll overcome a downturn

ATOBTTR

The 80 segment a year flyer spending $35K a year would be spending $437.50 PER SEGMENT and $1750 per round trip. I doubt very many people are paying much for a typical domestic trip except for transcon J or paid F/J to Hawaii.

This I don't disagree with. If/when times get tough, DL will just throw out some sort of promotion or shortcut to status and many of us will chase it without barely a second thought.

IAH-OIL-TRASH

Yeah - those are the top 5% flyers. $1750 F roundtrips aren't that surprising to last-minute business travelers - the ones least impacted by the changes. Those numbers surprise mid-level FFers, but not Delta. Mid-level flyers have come to think they really special. They're the ones fuming.