Delta Q&A Meeting with Execs - NOTES
#31
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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.
#32
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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.
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.
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.
#33
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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.
#34
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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.
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.
#35
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#36
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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.
#37
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#38
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did anybody ask the question about what happened to complimentary award ticket upgrades in the merger and enhancement timeline?
#39
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More funny math
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?
#40
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#41
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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.
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.
#42
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I guess that AA/UA make more money selling those upgrades, but DL sees the huge benefit in giving them away.
#43
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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 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 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.
#44
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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?
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?
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.
#45
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Safe Travels.