Delta Q&A Meeting with Execs - NOTES

 

Old Jun 28, 09, 8:03 pm
  #31
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Originally Posted by mersk862 View Post
4th tier will launch on March 1, 2010 based on how many MQMs are earned during the 2009 Calendar Year.

So if we hit the number (whatever that is) say, in August we will have to wait until Mar 1 2010? I kind of figured that anyway as it is new but was hoping they would treat it like they do for existing tiers; awarded immediately AND good for the next year.
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Old Jun 28, 09, 8:04 pm
  #32
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Originally Posted by Gargoyle View Post
It's not the whole 160 m, but it's the biggest individual piece. I don't recall the exact number, somewhere between 80 and 120. IIRC that's the total for change and redeposit fees extrapolated to the number of changes/redeposits in the combined DL/NW system, and therefore the annual cost/revenue after the merger is complete.

A lot of people even request redeposits after the flight has departed.

I view this differently than you, but I see a change and a redeposit as being very similar; they certainly have a similar effect on the overall system and award availability, and processing costs are similar. To me it's nit picking to separate them, but to people who do those changes a lot I'm sure they are entirely different animals.

I guess they did the math, and decided it's better to tick those few individuals who do lots of changes, and thereby lose a few thousand in business, rather than to lose a hundred million in revenue. They indicated that when they ran the numbers they were quite surprised at how large the amounts are.
I wish someone could say how many are redeposits and how many are changes. Surely they are quite different. I find it almost impossible to get a perfect itinerary on the first pass going overseas. I end up with open jaws, bad connections, etc. if DL and their partners had space open, even 300 days out, this would not be a big problem.

DL limits awards, very well noted all over these threads, and than wants to charge to get it correct.

Please someone from DL break the redeposit from changes. There just can't be even $5 million of the 80 to 100 million. In the long run at this small number it is a loser. If the problem is technology and their systems are designed to treat a redeposit for a change than change their software, they sure did that to implement the $50 nonsense.

I still think the numbers they are talking about is to RIF people.

I do have a question.. Was there a fee to redeposit or change for all members or just PL? If it was only PL than the numbers are even more apparent to be dishonest.
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Old Jun 28, 09, 8:05 pm
  #33
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Originally Posted by avidflyer View Post
So if we hit the number (whatever that is) say, in August we will have to wait until Mar 1 2010? I kind of figured that anyway as it is new but was hoping they would treat it like they do for existing tiers; awarded immediately AND good for the next year.
It was mentioned that they might start it up slightly sooner than 3/1/10 (possibly by 1/1/10) but it didn't sound like it would be this year. My guess is they want to get the integration of WP/SM done first (which is scheduled for October) and then add in 4th tier.
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Old Jun 28, 09, 8:07 pm
  #34
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Originally Posted by thepla View Post
I wish someone could say how many are redeposits and how many are changes. Surely they are quite different. I find it almost impossible to get a perfect itinerary on the first pass going overseas. I end up with open jaws, bad connections, etc. if DL and their partners had space open, even 300 days out, this would not be a big problem.

DL limits awards, very well noted all over these threads, and than wants to charge to get it correct.

Please someone from DL break the redeposit from changes. There just can't be even $5 million of the 80 to 100 million. In the long run at this small number it is a loser. If the problem is technology and their systems are designed to treat a redeposit for a change than change their software, they sure did that to implement the $50 nonsense.

I still think the numbers they are talking about is to RIF people.

I do have a question.. Was there a fee to redeposit or change for all members or just PL? If it was only PL than the numbers are even more apparent to be dishonest.
Also, the way I interpreted the fees was not solely those that changed award tickets. The way I interpreted it was all SM fees - changes, redeposits and short-notice ticketing fees (which it's quite possible a huge chunk of this revenue comes from this source).
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Old Jun 28, 09, 8:12 pm
  #35
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Originally Posted by thepla View Post
Please someone from DL break the redeposit from changes.
I don't think any major corporation would hand out that sort of detailed info. It was clear they've done deep analysis of the numbers, and I was surprised at how open they were at the Q&A.
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Old Jun 28, 09, 8:14 pm
  #36
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Originally Posted by Gargoyle View Post
Those changes are costly. When you cancel or change an award ticket, the flights you release do NOT go back into award inventory. They go into general inventory, which the computer then divvies up and allocates to whichever fare bucket it chooses.
OK, playing Devil's Advocate: If you cancel and/or relinquish an award seat on a given flight and it then goes back into general inventory and gets sold as a revenue seat, how is that "costly" to the carrier?

The carrier converted a seat that was "free" into a revenue seat. And if you replaced it with another award seat, by definition that was a seat not expected to sell in the first place (otherwise, it would never have been allocated to award inventory).

Has anyone from the army of beancounters run the numbers on how much revenue was gained by converting, via voluntary changes, award seats into revenue seats? I.E., taking a seat that you had given up for award usage 11 months prior, which now you are able to convert to a revenue seat?

Now, it is "costly" when someone is holding an award seat and simply doesn't show up. That is a seat where the revenue is gone forever.

So, to me, changes and no-shows are two entirely different subjects, yet it sounds like management lumps them together into this horrible "costly" disaster that must be punished with fees.

I say, allow changes freely (you might even make money off of it) up until two weeks before the flight, after which a fee to change dates kicks in (but not to change to a different flight on the same date). I then say levy a stiff penalty to redeposit miles, or eliminate redeposits altogether, when the holder of the seat fails to cancel in advance and then doesn't show up for the flight.

One of the reasons that so many people don't show up and don't cancel in advance might just be because whether you change or cancel, and regardless of when you change or cancel, the penalty is the same. What incentive is there to cancel in advance (when it is most advantageous to the carrier)? You can cancel now, cancel later, or just redeposit miles after the no-show, and it won't matter to your pocketbook -- yet the difference to the carrier between you canceling now versus later (or not at all) is significant. I would hope that the legion of beancounters would realize this and reward the behavior that best protects the carrier.
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Old Jun 28, 09, 8:17 pm
  #37
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Originally Posted by mersk862 View Post
4th tier will launch on March 1, 2010 based on how many MQMs are earned during the 2009 Calendar Year.
LOL... "We won't tell you where the end of the race is... but run like hell until you get there..."
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Old Jun 28, 09, 8:36 pm
  #38
 
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did anybody ask the question about what happened to complimentary award ticket upgrades in the merger and enhancement timeline?
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Old Jun 28, 09, 8:45 pm
  #39
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More funny math

Originally Posted by me4yankees View Post
Jeff also mentioned the cost savings to do away with unlimited complimentary elite upgrades, by comparison, would have been around $150 million.
Someone enlighten me... how does giving elite upgrades cost DL $150 million dollars a year?

DL cannot sell enough FC seats to fill the front. On some flights they cannot even find enough elites to fill the front.

Upgrades to FC free up seats in coach for other paid flyers. Upgrades help fill airplanes... both directly and indirectly (by stimulating brand loyalty).

Sure... they could sell upgrades at the gate (like they do now when they can't fill FC)... but, if they did, what fool would buy a paid FC ticket?

DL had 66 million "enplaned passengers" in 2008 (DOT statistics). I'm estimating 6 to 7.5 million of those passengers received elite upgrades (tops).

Where are the sources of the $20 to $25 net lost revenue for each and every one of those elite upgrades? Versus letting 6 to 7.5 million seats go empty.

They are certainly not spending $20 to $25 per person per flight on snacks and meals.

Or was DL's alternate plan B to reconfigure each plane with 4 FC seats and add more coach seats?
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Old Jun 28, 09, 8:47 pm
  #40
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Originally Posted by reddawngrl View Post
did anybody ask the question about what happened to complimentary award ticket upgrades in the merger and enhancement timeline?
They're coming - it's another technology issue going on.
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Old Jun 28, 09, 8:52 pm
  #41
 
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Originally Posted by thepla View Post
I wish someone could say how many are redeposits and how many are changes. Surely they are quite different. I find it almost impossible to get a perfect itinerary on the first pass going overseas. I end up with open jaws, bad connections, etc. if DL and their partners had space open, even 300 days out, this would not be a big problem.

DL limits awards, very well noted all over these threads, and than wants to charge to get it correct.

Please someone from DL break the redeposit from changes. There just can't be even $5 million of the 80 to 100 million. In the long run at this small number it is a loser. If the problem is technology and their systems are designed to treat a redeposit for a change than change their software, they sure did that to implement the $50 nonsense.

I still think the numbers they are talking about is to RIF people.

I do have a question.. Was there a fee to redeposit or change for all members or just PL? If it was only PL than the numbers are even more apparent to be dishonest.
This sums it up perfectly...since the award calendar doesnt work, NWA.com/jp is gone, it is virtually impossible to design a complicated international itinerary in one go...making 3-4 changes quite common with certain itineraries...It seems like the rule is being thought of in regards to simple domestic itineraries overlooking more complicated itins with partners.
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Old Jun 28, 09, 8:56 pm
  #42
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Originally Posted by StayingHomeIsBetter View Post
Someone enlighten me... how does giving elite upgrades cost DL $150 million dollars a year?

DL cannot sell enough FC seats to fill the front. On some flights they cannot even find enough elites to fill the front.
I don't recall the details, but it was discussed in comparison to UA and AA, who don't give away unlimited domestic elite upgrades. It was pointed out that UA and AA would love for DL to eliminate this benefit, and that it's a case where DL isn't just matching the competition.

I guess that AA/UA make more money selling those upgrades, but DL sees the huge benefit in giving them away.
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Old Jun 28, 09, 8:56 pm
  #43
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Originally Posted by Gargoyle View Post
I view this differently than you, but I see a change and a redeposit as being very similar; they certainly have a similar effect on the overall system and award availability, and processing costs are similar. To me it's nit picking to separate them, but to people who do those changes a lot I'm sure they are entirely different animals.

I guess they did the math, and decided it's better to tick those few individuals who do lots of changes, and thereby lose a few thousand in business, rather than to lose a hundred million in revenue. They indicated that when they ran the numbers they were quite surprised at how large the amounts are.
They didn't do any math worth mentioning. They're locked in the Leo & Robbie frame of mind, namely that the customer loves them so much they'll just throw money at them to keep the good times rolling.

I view them the same as $150-300 change fees for revenue tickets. They're all money grabs, period. Anything else is a rationalization.

It was only 3-4 years ago that Delta got by just fine with change fees as low as $30. Problem was -- and still is -- they don't offer a product good enough that customers will cover its costs.

Meanwhile, over at Southwest where there are no change fees they reported profits for how many consecutive years? This last quarter they reported minor operating loss which for all practical purposes is at the break even point. Southwest is announcing no layoff for during the current down economy & actively reallocating its resources, including new services this year at MSP, LGA, BOS & MKE.

Sorry, I just don't buy the lame explanations & excuses.
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Old Jun 28, 09, 9:00 pm
  #44
 
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Originally Posted by Robert Leach View Post
OK, playing Devil's Advocate: If you cancel and/or relinquish an award seat on a given flight and it then goes back into general inventory and gets sold as a revenue seat, how is that "costly" to the carrier?

The carrier converted a seat that was "free" into a revenue seat. And if you replaced it with another award seat, by definition that was a seat not expected to sell in the first place (otherwise, it would never have been allocated to award inventory).

Has anyone from the army of beancounters run the numbers on how much revenue was gained by converting, via voluntary changes, award seats into revenue seats? I.E., taking a seat that you had given up for award usage 11 months prior, which now you are able to convert to a revenue seat?
+1

I noticed this too when I read the list of items presented. Changing an award ticket causes the seat to instantaneously become a revenue seat.
I doubt they were really concerned about customers not being able to find award flights because of this... so now they get the award seat becoming a revenue seat + the fee from the award change.
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Old Jun 28, 09, 9:01 pm
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Originally Posted by mersk862 View Post
It was mentioned that they might start it up slightly sooner than 3/1/10 (possibly by 1/1/10) but it didn't sound like it would be this year. My guess is they want to get the integration of WP/SM done first (which is scheduled for October) and then add in 4th tier.
So is it folks collective guess that the 4th tier will have system wide upgrades that can used on something lesser than YBM internationally or is it looking like that will not change for the new tier? Seems like some change would be required to make it "market" with AA and/or UA. Please forgive me if I missed it being discussed!

Safe Travels.
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