Ed Bastian on Q3 results today

Old Oct 12, 2023, 11:06 am
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Ed Bastian on Q3 results today

Looks like the secret word for Ed today was "premium". He said it 4 times in 5 minutes.
  • We have "premium" which is driving the strength of the business. Our consumer is more on the premium end.
  • We have international that is gangbusters.
  • Corporate travel is coming back meaningfully (10 points of share) in the last 30-45 days.

The SkyMiles backlash... "We are reconsidering and rethinking how to do this." "Too many changes at one time". "People love the brand. They love their loyalty and they were hurt." "We have more premium customers than premium assets".

Interpretation... this is the policy and it's staying. Anything they "walk back" will just be temporary for a year at most. Even though we are a "premium" carrier, you guys aren't "premium" to us unless you massively overpay for it. Wish he was asked about the Jet Blue and Alaska status matches of their "premium" clientele.
They will not see the drop in AMEX revenue until next quarter. That one will be interesting.
Nothing he said has made me want to hold my plans and keep my DL AMEX and/or wait for the walk-back.

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Old Oct 12, 2023, 11:16 am
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In the end we’re just Ham sammiches to him.
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Old Oct 12, 2023, 11:52 am
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He is forever known to me as Fast Eddie now.
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Old Oct 12, 2023, 11:52 am
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Hate to break it to you Ed. Premium and Delta are not words that go along together as of this post.
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Old Oct 12, 2023, 12:24 pm
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It is wrong to have an emotional attachment with a corporate product and take company's business decisions personally.

For-profit corporations (beyond the romantic phase of a small start-up) do not have values, feelings towards their customers, or social obligations.

They have competitors; compliance departments to navigate between restrictions from laws, sanctions, and tax obligations (+tax evasion); PR departments to fine-tune mission statements, "core values", and press-releases. This is all on top of the balancing act between supply and demand.

The product pricing and loyalty rewards are all transactional, and the profit margins must remain positive for the company. We shouldn't expect to feel "valued" or "deserving" by Delta or any other company.
For customer it must also make sense to stay in the program as opposed to getting more value from being a free agent.

The subject here is that Delta made a bad business decision in terms of hurting business relationship with its loyal customers, and they are looking at the ways to repair the potential damage, purely for the financial reasons, not because of some perceived feelings.

Building customer loyalty used to be a distinctive feature of American companies as opposed to European ones: more willingness to lose money in a transaction or a small dispute but ensure the customer returns again and again. Pushing repeat customers to become free agents is a very poor strategic choice

Last edited by Firstboss; Oct 12, 2023 at 12:33 pm
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Old Oct 12, 2023, 12:45 pm
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Fast Eddie remains tone death. Had his chance today to give some insight on the “rollback”, but he punted instead of taking control of the negative story—very poor CEO communication. Take it as it, as what was announced on 9/14 is going forward as Delta currently doesn’t have the “premium” infrastructure to spoil their “premium” passengers. Looking back, Delta has now created class warfare between the affluent haves and middle class have nots, as not all elites receive a “trophy” in the future—back to cattle class.
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Old Oct 12, 2023, 12:50 pm
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It is true that the passengers on 555 received a premium heatstroke experience.
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Old Oct 12, 2023, 12:50 pm
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Originally Posted by Firstboss
It is wrong to have an emotional attachment with a corporate product and take company's business decisions personally.

For-profit corporations (beyond the romantic phase of a small start-up) do not have values, feelings towards their customers, or social obligations.

They have competitors; compliance departments to navigate between restrictions from laws, sanctions, and tax obligations (+tax evasion); PR departments to fine-tune mission statements, "core values", and press-releases. This is all on top of the balancing act between supply and demand.

The product pricing and loyalty rewards are all transactional, and the profit margins must remain positive for the company. We shouldn't expect to feel "valued" or "deserving" by Delta or any other company.
For customer it must also make sense to stay in the program as opposed to getting more value from being a free agent.

The subject here is that Delta made a bad business decision in terms of hurting business relationship with its loyal customers, and they are looking at the ways to repair the potential damage, purely for the financial reasons, not because of some perceived feelings.

Building customer loyalty used to be a distinctive feature of American companies as opposed to European ones: more willingness to lose money in a transaction or a small dispute but ensure the customer returns again and again. Pushing repeat customers to become free agents is a very poor strategic choice
+1
What I wished some analyst would have asked is "Do you still expect to be able to achieve $10B/year Amex revenue after your changes to the DL Amex card program?"

Not achieving their previously stated $10B/year goal would be a material impact to future DL financial results, I would think.
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Old Oct 12, 2023, 12:56 pm
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Originally Posted by DrMilano
Fast Eddie remains tone death. Had his chance today to give some insight on the “rollback”, but he punted instead of taking control of the negative story—very poor CEO communication. Take it as it, as what was announced on 9/14 is going forward as Delta currently doesn’t have the “premium” infrastructure to spoil their “premium” passengers. Looking back, Delta has now created class warfare between the affluent haves and middle class have nots, as not all elites receive a “trophy” in the future—back to cattle class.
The existence of first class and economy cabins didn't create class warfare? The world existed before the DL cutbacks...
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Old Oct 12, 2023, 1:10 pm
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Originally Posted by mnbp
+1
What I wished some analyst would have asked is "Do you still expect to be able to achieve $10B/year Amex revenue after your changes to the DL Amex card program?"

Not achieving their previously stated $10B/year goal would be a material impact to future DL financial results, I would think.
While I wished that too, very, very rarely are these gotcha questions asked. They are always asked behind the scenes, never in public and behind the scenes, that is a softball question. If someone is really that unhappy that they are going to ask that type of question, it is always going to be when they have the CEO's undivided attention and can ask a lot of other questions that are on their mind and give the CEO a piece of their mind about how to run the company. We always prepare for them, but only once in my career has anyone ever asked a question like that in a public meeting. Behind the scenes...all the time.
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Old Oct 12, 2023, 1:56 pm
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Originally Posted by Firstboss
It is wrong to have an emotional attachment with a corporate product and take company's business decisions personally.

For-profit corporations (beyond the romantic phase of a small start-up) do not have values, feelings towards their customers, or social obligations.

They have competitors; compliance departments to navigate between restrictions from laws, sanctions, and tax obligations (+tax evasion); PR departments to fine-tune mission statements, "core values", and press-releases. This is all on top of the balancing act between supply and demand.

The product pricing and loyalty rewards are all transactional, and the profit margins must remain positive for the company. We shouldn't expect to feel "valued" or "deserving" by Delta or any other company.
For customer it must also make sense to stay in the program as opposed to getting more value from being a free agent.

The subject here is that Delta made a bad business decision in terms of hurting business relationship with its loyal customers, and they are looking at the ways to repair the potential damage, purely for the financial reasons, not because of some perceived feelings.

Building customer loyalty used to be a distinctive feature of American companies as opposed to European ones: more willingness to lose money in a transaction or a small dispute but ensure the customer returns again and again. Pushing repeat customers to become free agents is a very poor strategic choice
It is more than wrong. It is patently stupid. One should only be that vested in a company if one owns it.
It would be interesting to see the analysis DL performed before implementing the changes to its FF program. I wonder what was the acceptable margin of decline factored and if it has been exceeded.
With operating revenues of $15.5B and cash flow of $1B, I would say DL has strong financials. Revenues are solid, but costs up.
Good luck
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Old Oct 12, 2023, 2:02 pm
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Originally Posted by DrMilano
Fast Eddie remains tone death. Had his chance today to give some insight on the “rollback”, but he punted instead of taking control of the negative story—very poor CEO communication. Take it as it, as what was announced on 9/14 is going forward as Delta currently doesn’t have the “premium” infrastructure to spoil their “premium” passengers. Looking back, Delta has now created class warfare between the affluent haves and middle class have nots, as not all elites receive a “trophy” in the future—back to cattle class.
Class warfare...Are you kidding? Please stop with the hyperbole and statements verging on melodrama. It is obvious things will not return to what they were before the changes were made. Even rollbacks will most likely be small modifications still to the benefit of the company.

If you don't have - do without.
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Old Oct 12, 2023, 2:20 pm
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Another thing Ed said in his interview on CNBC this AM: "If everyone is special, then nobody is special."

He could have said, and should have said, "We will stand on our heads if that what it takes to make sure that every one of our special customers gets treated special. "
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Old Oct 12, 2023, 2:33 pm
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Maybe 'if everything is premium than nothing is premium'... since Fast Eddie thinks that DL walks on water, their $hit don't stink, and is all about premium.
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Old Oct 12, 2023, 2:43 pm
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Originally Posted by The Situation
While I wished that too, very, very rarely are these gotcha questions asked. They are always asked behind the scenes, never in public and behind the scenes, that is a softball question. If someone is really that unhappy that they are going to ask that type of question, it is always going to be when they have the CEO's undivided attention and can ask a lot of other questions that are on their mind and give the CEO a piece of their mind about how to run the company. We always prepare for them, but only once in my career has anyone ever asked a question like that in a public meeting. Behind the scenes...all the time.
Delta’s corporate PR team reached out to CNBC in advance and worked out behind the scenes the softball questions that would be asked aka ground rules for the live “interview”. CNBC needs the onsite CEO news content for programming to maintain viewership. Fast Eddie was very polished today for his “interview” response as he knew the questions in advance, unlike the Atlanta Rotary Club response that he appeared awkward when answering. Wouldn’t be surprised if there was a teleprompter out of sight from the cameras that Fast Eddie read word for word from.
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