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I have had a bunch of questions, on the blog, in e-mail and on twitter, about why I thought Texas Yankee and I got so few upgrades as Diamonds over this past Delta Mileage Run. Well, we all know from the investors day information this year that Delta wants to sell all the 1st class seats they can (shocking right – the company wants to make money – duh)! How they do this will have an impact on how they respect frequent flyer loyalty, but I will get to that in a bit.
First off, the answer is really simple and when you look at all that is going on, in totality, I can promise you, personally, will see many less upgrades moving forward. Here are “most” of the reasons why:
Price of tickets. As I have talked about before, the most important factors for upgrades is your fare class and your medallion rank. There are many tiebreakers like the time of purchase, having the Delta AMEX Reserve card personal or business and more. But fare class is HUGE.
Time of the year. This is the time of the year we have a boatload of NEW medallions coming “online” if you will as they have just earned their status. Plus, so many who will drop down next year, have not done so yet. By 1MARCH15 the upgrade numbers should improve a bit even with all the rest that is going on around us.
RU & GU Certificates. Many have picked regional and global upgrade certificates as their medallion choice benefit. These MUST be flown within 12 months of the choice date. I see many just burning them now to avoid losing them (and why not).
Up Sells. We know about FCM by now and all should even know what those letters stand for. Delta will sell-sell-sell all those seats you would like to get.
Redemptions of awards tickets in 1st class. Delta has promised to make more low level seats open to us and to even offer more low level seats plus some cash. I think we are seeing a little more availability already and will see even more next year especially the low+cash ones (gosh I hate that – paying more for a “free” ticket – Delta should be ashamed)!
Flight changes. More are tinkering and changing to other flights with open seats. Sure, it is a bit harder with SDC rules in effect, but there are ways to make it happen and it is happening.
Capacity. Fights are just REALLY full nowadays. That is one of the reasons with gas prices going down that ticket prices have NOT gone down. Why drop the price when the economy is doing great and folks are just buying all the tickets Delta sells including 1st class ones at published prices!
When you take all of this into consideration it really is not hard to see just what is happening especially right now. Moving forward, there will be some things that could have a slightly better impact for those who want more complimentary medallion upgrades. First the bad.
If Delta begins (and I would argue but don’t have the numbers to prove it) to sell more 1st class seat upgrades at discounted prices vs just the cost of the ticket + the current price to buy a 1st class ticket, more and more non- medallion or medallions too will just pay the nominal fee to upgrade. This, to me, is frustrating. If you are out to make money, then charge full price not a discounted up-sell. This is a real stab at loyalty!
Now what could make things better? I think MANY will depart Delta next year for other airlines as they have had it with Skymiles2015 and all the program cuts (a.k.a. death by 1000 cuts). Also, unlike those of us who are smart and can meet the AMEX exempt spend number simply each year, the new higher MQD requirements next year will help thin the herd and may, for a short time, counteract some of the up-sell impacts.
Either way, and this is just my opinion, the day is slowly approaching when getting a complementary upgrade, one of the biggest, if not the biggest perk of the medallion program, will be all but impossible for most Delta frequent flyers – René
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It will be very interesting to see where Delta stops with these countless cuts to loyal and frequent customers. I have to believe at this point that management has simply come to the conclusion that loyalty programs are not valuable to their business model.
Rather than cook us all at once, we are like the frog in a pot of warm water that is now starting to boil. Many of us won’t jump at all… We will just here and boil.
They see seat upsells as this big untapped revenue stream but in reality it’s more like a zero sum game as your best customers realize they aren’t getting the upgrades and loose their loyalty. Just ask United.
Rene,
Great analysis of the factors contributing to our upgrade potential. As I sit here in the ATL lounge on my way out west on a paid Up Fare in first class, I completely concur with your reasoning. There are a couple of realities here that anyone in a loyalty program should and must consider. At least those that try to take advantage of the “perks” afforded us as compensation for flights taken, loyalty maintained, and dollars paid. You are spot on when you say, that ” Delta wants to sell all the 1st class seats they can (shocking right – the company wants to make money – duh)!”. This is the mantra for any company. To make money. And that is fine. Obviously every company will make more or less money depending on customer service, product need, product quality etc etc. The difference here is that Delta and others have decided to include a loyalty program whereby loyalty is rewarded. Once any company does that, it becomes a balancing act whereby there will always be a tradeoff, or for lack of a better phase, there will be an EXPENSE, a COST to maintain that program. It is a reality, a fact of life. There is a cost to upgrading me and the accountants have a line item and budget for that. There is a cost for me to sit in the Delta Club and to eat and drink there. So on and so forth. And here is where it will get interesting. The more Delta monetizes their products, the less it seems, now at least, their loyal Medallions will benefit from the perks. Yes, there may remain some perks, but it will start to dwindle and where will it end? So the main question is, Is Delta, and all the others, trying to wind down their loyalty programs, to where they don’t exist anymore or are they trying to make it so elite, that really only a few will get “compensated”? They have the numbers and if they project their business model can sustain less SkyMiles members, less Medallions and profit even more, then that is a path they may be on. Only time will tell.
This is why I like stickers over UDU – frequent flier upgrades become a revenue stream for the company.
I travel almost every week and for the past 6 weeks have noticed that I have been receiving far fewer upgrades in advance and never at the gate. I have a flight in less than 3 days, there are 9 open FC seats, and as a DM on a B class fare I have not been upgraded! For me, the upgrades are the biggest perk of being DM as it makes my work travel slightly more tolerable…
there were alot of DM’s in the back with me last week as i did a run of 8 segments across america so i willnot have to pay$$$$$$for mqm’s
Keep descending is right! It seems that of all the “enhancements” that come out each year only a few actually improve anything for the majority of us. Even those few improvements usually turn out to be just preparation some future downgrade in benefits. Take the new C+. Getting a free drink(s) and a snack in coach without a HOOU seems nice. But it is really intended to pacify the DMs and PMs who won’t be getting upgrades and a real meal in first. C+ also appears to lower status for GMs. So in reality a takeaway.
I still contend that delta is lying about there being more low level awards availability. I’ve been looking almost everyday for three different trips I’m trying to take next year and the lowest low level award I have found is 42500 and that requires leaving at 6 a.m. and making two stops instead of the one stop the trip would normally require. I haven’t got all day to make a trip from point a to b and risk missing connections to boot. The frustration factor is part of what makes it so hard to stay loyal to delta regardless of all the devaluing it is doing. Maybe I should just become a shareholder of delta and forget flying them!
I hate to give them any ideas. But I read in some travel magazine that Lufthansa Is going to start auctioning off upgrades. In the future you may find yourself Bidding with Miles or $ on the app at the gate for the available upgrade.
Renee, don’t forget how many EC seats are given to Delta non-revs, and next to me right now a Jet Express pilot.
It’s like the faucet got turned off for early upgrades the past 4 weeks, but it makes me wonder if this is yet another “IT update” that’s being done now in anticipation of a systemwide adjustment come 01-2015 vis a vis DL sees enough of a drop in all tiers as a result of the MQD reqt so that potentially upgrade potential returns to normal (or better) once we start flying in the new year. Anyway I’m always an optimist LOL
I concur with your conclusion. Earlier this month, I flew a CRJ-900 CLE-MSP and, as a Diamond, was not upgraded. To add insult to injury, when I bought my ticket, the specified aircraft was a CRJ-200, even though first-class tickets were available for purchase. When the upgauge happened, all of the Medallions who didn’t receive their upgrades at the 6/5-day mark were skipped in favor of Medallions who bought their coach tickets after the upgauge.
As disappointing as this is, though, it’s not all bad. There is one silver lining in the sky, no pun intended. There are some routes on which upgrades are exceedingly scarce, even for Diamonds on expensive tickets. For example, the Friday afternoon service ORD-DTW. Delta often typically serves this with an A320. When the fleet rationalization is complete and those birds return to their Northwest glory with 16 seats up front, perhaps there will be an improvement.
A similar example would be that Friday afternoon service DCA-DTW. The first-class seats often sell out, as in people on expense accounts authorized to pay for a Y-class or actual first-class ticket.
In these cases, I suspect that Delta would allow us to purchase the upgrade and, if our timing is nimble, we could sit up front. AA used to offer this but discontinued during the last bankruptcy. If Delta upgrades are headed the way of the Dodo, at least we’ll have a modicum of flexibility on those routes for which we’d consider it a decent value to pay to sit in the forward cabin.
The sad thing about the upgrades costs is that they seem to be more expensive than other airlines. Over the summer i upgraded my son’s ticket on United ewr to fll because he had two bags and one was overweight. The upgrade was 129 the bags would have been about over 100. DL wanted to share me 259 to upgrade dtw to fll and these were regular be seats, not the sleepers with entertainment my son got on UA.
I am surprised that Delta hasn’t started selling International Upgrades instead using the GUs as they seem to be selling everything else. NWA was happy to allow a free upgrade to Biz on International flights if your status and ticket were high enough. Selling a DL Biz Class seat for any amount of money is better than accepting a GU certificate.
why am I thinking the medallion year starts February 1st instead of March 1st in 2015? I thought Delta changed it for next year.
@Markj – Delta shifted the medallion year to end on 1FEB each year starting in 2016.
As mentioned above, it’s a numbers game. I am willing to bet there are far more FFs like me who are possibly infrequent Delta costumers but who do gather enough miles to buy into an upgrade once in a while. Even with loyal customers, revenue trumps rewards, so they will (and, from a business pov, should) always hold those empty FC seats for every possibility of revenue before releasing them. I may not like that, but I understand and expect that. I think there are less expensive and more effective ways to reward the FFs en masse. I’d prefer efforts be made to improve the lounge, gate and in-flight experiences regardless of where you sit on the plane. This way, you upgrade the experience for all of us on every trip in the areas we usually spend the most time. Still, not holding my breath for that, either.
@RobRob It appears Delta is going down a road like you describe.. rewarding flyers en masse with a well run airline which I appreciate. I also understand that revenue trumps freebies like upgrades. However, at some point, if Delta quits recognizing their most frequent flyers in place of making a fast buck from an infrequent flyer then they are going to give away lots and lots of revenue from those who used to be loyal (because being loyal actually meant something at one time).
So my question to Delta would be along these lines- as a long-time customer who flies your airline 70 or 80 times per year I’m beginning to feel like you appreciate my business the same as someone who rarely flies. Do you want my long term business or not?
“Well, we all know from the investors day information this year that Delta wants to sell all the 1st class seats they can (shocking right – the company wants to make money – duh)!”
Well, smart businesspeople know that pissing off your best customers is a long term loser.
I’m a Delta DM to get upgrades. If I end up not getting enough upgrades, I can, and will, go elsewhere. Taking my heavy Delta Reserve spending with me.