Delta Q&A Meeting with Execs - NOTES

 

Old Jun 30, 09, 6:38 am
  #136  
 
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It looks like a pretty spectacular DO. Let's be positive about everything and as a community express gratitude to Canarsie and atldlff along with the whole Delta team. Hopefully more of us will be able to make it next time.
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Old Jun 30, 09, 7:23 am
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10 pages over two days worth of reading and as such, a quick thank you is well deserved for all those who attended, speaking as much for the rest of us as for themselves and for bringing some of that discussion back here.

My take away is that

a) The folks running Delta are smart enough and care enough.
b) They are looking to improve certain things that many feel are still lacking in "our" FF program.
c) They in fact do listen to what we say here.
d) They balance decisions vs. making emotional shoot-from-the-hip decisions.
e) They value our business.

f) Management may actually be able to navigate Delta through an incredibly difficult economic climate. This is after all the most important thing for any of us.
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Old Jun 30, 09, 7:25 am
  #138  
 
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Originally Posted by ClipperDelta View Post
The synergies and efficiencies will take up to 2 - 3 years to be fully realized across the combined company. In the mean time, two shocks have hit the industry (fuel price escalation and a global economic meltdown) which required immediate action. Since you understand business, you should also understand what management has been faced with and the choices they have to make.....
True - synergies do take several years for their full potentital to hit - but that is no reason to escalate prices/fees fairly quickly.

Second of all, the two shocks you mentioned (fuel price escalation and the global meltdown)....Fuel prices dropped back down prior to the merger approval with Delta, meaning those "fees" they added to NWA's structure were un-necessary. Second of all, the travel industry has been quite aware that counter-acting the global meltdown can only be achieved by keeping prices where they are at - not increasing them. The most successfull travel oriented businesses (Disney and Vegas in general) have realized this and have managed to stay afloat simply by keeping prices where they were (for the most part) or via discounting. Granted, we are talking about hotels/attractions and not airfares, but they do collect their money from the same people at the end of the day.
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Old Jun 30, 09, 7:38 am
  #139  
 
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Originally Posted by Surge2009 View Post
True - synergies do take several years for their full potentital to hit - but that is no reason to escalate prices/fees fairly quickly.

Second of all, the two shocks you mentioned (fuel price escalation and the global meltdown)....Fuel prices dropped back down prior to the merger approval with Delta, meaning those "fees" they added to NWA's structure were un-necessary. Second of all, the travel industry has been quite aware that counter-acting the global meltdown can only be achieved by keeping prices where they are at - not increasing them. The most successfull travel oriented businesses (Disney and Vegas in general) have realized this and have managed to stay afloat simply by keeping prices where they were (for the most part) or via discounting. Granted, we are talking about hotels/attractions and not airfares, but they do collect their money from the same people at the end of the day.
I don't know if that model works for everyone. Hotels have a fixed inventory and they too know that if they discount too heavily, they can ruin the margins on their product (aka DL's BE principle). That said, they simply can't take rooms off the grid. Airlines on the other hand can reduce capacity - removing seats and then charging more for each seat they sell.
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Old Jun 30, 09, 9:29 am
  #140  
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Originally Posted by Surge2009 View Post
True - synergies do take several years for their full potentital to hit - but that is no reason to escalate prices/fees fairly quickly.
How is the airline supposed to make money in the interim if prices are held at a level where they no longer align with demand or support variable costs?

Originally Posted by Surge2009 View Post
Second of all, the two shocks you mentioned (fuel price escalation and the global meltdown)....Fuel prices dropped back down prior to the merger approval with Delta, meaning those "fees" they added to NWA's structure were un-necessary. Second of all, the travel industry has been quite aware that counter-acting the global meltdown can only be achieved by keeping prices where they are at - not increasing them. The most successfull travel oriented businesses (Disney and Vegas in general) have realized this and have managed to stay afloat simply by keeping prices where they were (for the most part) or via discounting. Granted, we are talking about hotels/attractions and not airfares, but they do collect their money from the same people at the end of the day.
You can't really compare an airline to Disney or Vegas. The cost structures (and business model) are completely different.
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Old Jun 30, 09, 6:28 pm
  #141  
 
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Originally Posted by EasternTraveler View Post
I really cannot believe how many people are out for blood. If you were not at the event then you are NOT going to get all of the details that were available at the event. As Jeff and others said "We are not going to publicly comment on many things that we would like to due to legal and policy reasons." What they discussed with us was for our group. Flyer Talk is a public forum and is read by many, including the press. It would be wrong for us to release any references or inuindo given at the event.

I was surprised that some actually came to the event that don't even fly DL or NW. I am not surprised at human nature. Some came with an agenda, DL treated them with the utmost respect and spent several hundred dollars on each and every one of us who attended. If they go back and bad mouth, that is them. Most of us understand business and understand what they are doing. Is everyone going to be happy? No! But I am glad they charge a fee when someone changes or cancels an award ticket. We get the appropriate waivers and if anyone abuses that, they should pay. One thing that everyone should have gotten out of the event is this:

Delta reads every post on multiple blogs, websites, etc... and the ones that contain enough information and details to investigate, they investigate. The ones that are a rant "They have a good laugh at and toss."

The above also applies to mistakes, error fares, bonus work arounds, etc.
So if you don't want them to know.......... don't post it!

I don't think Josh would mind me quoting this:

"We will convert to a new system soon, but when we do it will be a state of the art system. A complete overhaul, not an upgrade or patch.
Well aren't you great! You got to go...now act all holy and don't dare share information! I believe anyone, and I mean anyone, who wanted to pay could attend. That means maybe even a rival airline sent someone in disguise!
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Old Jun 30, 09, 6:37 pm
  #142  
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Originally Posted by n7371f View Post
Well aren't you great! You got to go...now act all holy and don't dare share information! I believe anyone, and I mean anyone, who wanted to pay could attend. That means maybe even a rival airline sent someone in disguise!
My understanding from the intro to the Q&A was that they would be more open and forthcoming with us than they could be in most venues, because it was an informal verbal situation. With all the legal implications nowadays, company execs have to be pretty circumspect in any formal, written, videotaped, or broadcast interviews. That's why they felt comfortable opening up a bit more with us, and could say more than they usually could. Many in the audience would naturally interpret that as meaning it was a non-disclosure situation. (and perhaps they intended to create that effect, to somewhat limit the spread or credibility of anything which might slip out, like the name of the forth tier).
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Old Jun 30, 09, 9:05 pm
  #143  
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Originally Posted by Gargoyle View Post
I had an inactive account with AA, hadn't flown with them in years. I didn't bother paying attention to it, and the miles expired. AA was sending me sale promotions every Tuesday, but didn't notify me of the miles. Didn't bother me, since I wasn't their customer any more.
You're comparing apples to oranges. First of all we're talking about a merger of programs. One where NW did not delete accounts. DL also doesn't count everything as "activity" that other airlines do.

I believe that when I used my AA credit card, that the expiration date of all miles is extended. I know some people have complained about doing mileage earning activities on DL, but without extending the expiration date.

As for why someone who doesn't fly should keep their miles... I know of people who flew often and banked miles for their retirement years. They treat it as a bank account in a way. Now, I'm not saying that is smart, but I've read of many people on FT who do the same.

They get emails that say their miles expire 12/09, and then the miles go poof in January. This does seem to stand up to scrutiny, as another thread the person did get their miles reinstated.

People seem to be fixated on awards 25k or more. I just flew family members on a 20k award, and there used to be some for as low as 10k, or maybe even 5k interisland in HI.

Sending a US mail letter out is pretty minimal in cost, and you can use it as a marketing promotion too.

NW/DL seems pretty desperate. I got both the 100k promo, and the pay economy, fly biz for 1 extra mile. Instead of driving all their formally loyal elites away by their stupid policies, why not just treat them right to begin with?
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Old Jun 30, 09, 9:14 pm
  #144  
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Originally Posted by sxf24 View Post
Well, its called a frequent flyer program. If you haven't had any type of activity for 3-4 years, you're probably not too interested in maintaining your account.
Oh, really. And that's why AMEX is pumping billions into DL? And why Alamo is giving out billions of miles? As soon as DL started giving miles for anything non flight related, it ceased to be a real frequent flyer program. It's a marketing program.

The big guys can buy miles for 1/2 a cent each, while Joe FF pays 2 1/2 cents per mile online. If you think about it, it's more like a 21st century Ponzi scheme. They can nuke your miles for almost any reason. They can change the whole system at their own discretion. You're certainly foolish if you bank a lot of miles, and hope that you can use them in 5 years.
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Old Jun 30, 09, 9:17 pm
  #145  
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Originally Posted by Jaimito Cartero View Post
Sending a US mail letter out is pretty minimal in cost, and you can use it as a marketing promotion too.
Remember, this is only about accounts with less than 25k miles which have been inactive for YEARS. As I mentioned, there are easily 5 million such accounts, so printing and mailing costs would be $7mil or more, and I postulated it would only reach a portion of those people. (how many have moved, forwarding address expired?) I'll wager more than 97% of those people have either forgotten they have an account, forgotten/misplaced their WP number and/or pin, or just don't care.

For that kind of money they can do much more effective advertising. We have some advertising professionals here, perhaps they'll give us an idea of how large a campaign you can run for $7m?
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Old Jun 30, 09, 9:24 pm
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Originally Posted by Jaimito Cartero View Post
Oh, really. And that's why AMEX is pumping billions into DL? And why Alamo is giving out billions of miles? As soon as DL started giving miles for anything non flight related, it ceased to be a real frequent flyer program. It's a marketing program.

The big guys can buy miles for 1/2 a cent each, while Joe FF pays 2 1/2 cents per mile online. If you think about it, it's more like a 21st century Ponzi scheme. They can nuke your miles for almost any reason. They can change the whole system at their own discretion. You're certainly foolish if you bank a lot of miles, and hope that you can use them in 5 years.
And how does that rant support the assertion DL should make an effort to reach out to former NW customers who haven't participated in any of the abundant marketing opportunities in the past 3-4 years?
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Old Jun 30, 09, 10:01 pm
  #147  
 
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Enhancement = Advantage Delta....Wimbledon theme

Any new 'enhancements'? That should thin the ranks of remaining GMs and PMs. It worked in 2002. Right Patrice?
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Old Jun 30, 09, 10:10 pm
  #148  
 
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Originally Posted by Gargoyle View Post
My first trip there, 35 years ago, I paid about $500. At the time gas cost about 35/gallon, and the minimum wage was $1.60/hour. There is no rational way they can be selling tix for the same price as they did in the early 1970's.
DC-3s didn't use much gas! ...and no EQMs!
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Old Jun 30, 09, 10:33 pm
  #149  
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Originally Posted by Gargoyle View Post
Remember, this is only about accounts with less than 25k miles which have been inactive for YEARS. As I mentioned, there are easily 5 million such accounts, so printing and mailing costs would be $7mil or more, and I postulated it would only reach a portion of those people. (how many have moved, forwarding address expired?) I'll wager more than 97% of those people have either forgotten they have an account, forgotten/misplaced their WP number and/or pin, or just don't care.

For that kind of money they can do much more effective advertising. We have some advertising professionals here, perhaps they'll give us an idea of how large a campaign you can run for $7m?
Are you familiar with what it costs to send out mailers? I am. I'd guess 50 cents per piece, max for this type of mailing. Do it as a postcard, and it's even cheaper. I did a postcard mailing recently for 10k pieces, and with printing, addressing and postage, it was $3200.

If the average account has 10k in it, they'll be nuking 50 billion miles. That's 500 million dollars worth of miles, if they value them at a penny each. I believe that once they've nuked them, they can clear them off their balance sheet.
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Old Jun 30, 09, 10:40 pm
  #150  
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Originally Posted by sxf24 View Post
And how does that rant support the assertion DL should make an effort to reach out to former NW customers who haven't participated in any of the abundant marketing opportunities in the past 3-4 years?
Yawn.

If you have $500 in the bank, and had forgotten about the account, would it be okay for the bank to just take it? Fold it into its profit margin?

Unless you're a sleazeball company, why not just give them two years, and send out notices and such? Sure, many people are going to ignore it. At least you've done the right thing.

If you're a bunch of beancounters though, and want to make your bottom line look better, you can rid yourselves of hundreds of millions of liabilities. Let's book a profitable quarter or two, even if it's by these measures. Then we can get on the bonus train again!
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