There is much to laugh about when it comes to my life as a blogger. I never ever invest in airline stocks including DAL, that is Delta Air Lines, but I have spent years and years listening to DAL earnings calls but not for investor information. No, I listen to try to glean nuggets that will impact us as Delta frequent flyers.
Let me start with the fact that most of these calls are boring. They are so boring that one company analyst stated during the call that he almost fell asleep! That said, both analysts and media folks during the Q&A do all they can to get anything beyond the prepared remarks by the VIPs from Delta.
Did they get anything? Not really – but I think I did just listening and reviewing the PDF provided to us by Delta.
Are you wondering what many asked about and got no information? The two big ones were is Delta going to buy Boeing 737MAX jets as well as more Airbus A220s (the latter beyond what has already been agreed upon). The funny part about the A220s is that this blog was the first to break the rumor that the A220 (then the CS100) was soon to be purchased by Delta. Let’s move on.
Delta has a problem and it is a big one we all know about:
- Too many folks have club access.
Before someone says something in the comments – I agree that the blog is “part of the problem” that is offering Amex cards to access to Delta Sky Clubs. But do keep in mind reading the blog is free and must be supported to exist.
During the call Delta Air Lines President, Mr. Ham Sandwich himself, told us that 1 out of 4 new Delta Amex cards are either Platinum or Reserve high end cards with the latter giving you free access to Delta Sky Clubs when flying Delta.
Do you see the problem?
If you again look at the slide from Delta above, and according to what Delta folks said on the call, Delta expects to add a BUNCH more Delta Amex card holders to their portfolio and if this follows the current trend then some 25% of them will be those who will add to the massive overcrowding situation in the Sky Clubs.
Ruh roh!
Delta has tried the ridiculous limitation of three hours before flight that does not work as Centurion clubs have this policy and their lounges are still packed beyond belief.
The solution to the problem is not simple. Like anything else when there is high demand the solution is supply of the product. Clearly regarding Skyculbs there is no quick way to build more clubs overnight to fix what is as well as what is to come (per Delta with new card acquisitions).
So we should expect more pain.
What pain?
With all the above we know something has to give and we are approaching the fall when Delta tends to drop nasty news on us. What do I expect to happen?
Big changes.
We are now into the guessing part of this post but I fully expect to see the end of non-Delta Amex Platinum cards allowing access to Sky Clubs – OR – maybe limiting how many visits a year you would get as a card holder. Either that or requiring massive spend (say $50,000) per year to include Sky Club access with the card. Thus Delta will be restricting unlimited access only to those who hold Delta branded Amex Reserve cards (personal or business as well as Reserve card authorized users).
Again breaking in to inject to anyone who may comment something like “DON’T GIVE DELTA ANY IDEAS“! Please understand revenue management has looked at every possible option already and I feel these are the most likely we will see implemented soon.
The only saving grace we have, as talked about in the call, is that for the coming months Delta is capping capacity until they are able to increase staffing levels across the board and at that point exacerbate an already ugly Sky Club situation. – René
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“During the call Delta Air Lines President… told us that 1 out of 4 new Delta Amex cards are either Platinum or Reserve high end cards with the latter giving you free access to Delta Sky Clubs when flying Delta…Delta expects to add a BUNCH more Delta Amex card holders to their portfolio and if this follows the current trend then some 25% of them will be those who will add to the massive overcrowding situation in the Sky Clubs.”
That’s not how math works. You don’t know the split between Plat and Reserve so you definitely cannot assume that all of the 25% are Reserve, especially given the much higher price point.
@Ben – Since you quoted my text you can see I did not say “ALL”. Do keep in mind you can pay for access with the Delta Platinum cards and many do just that.
Unpopular opinion but I actually hope that they axe access to the SkyClubs from Amex Platinum card holders. I think that would go a long way to reduce the amount of folks and eliminate a lot of the crowding.
Most Amex Platinum card holders I know would never hold a $550 Delta co-branded card, at least not longer than the first year and that’s only if they could score a huge sign up offer which isn’t something that typically comes with the Reserve card.
So here’s to hoping that Amex Plat customers get forced back to Centurion lounges and the crowds at SkyClubs drastically reduce by way of only allowing Reserve and whatever elite status customers they choose to allow.
@2808 Heavy – Maybe unpopular but your idea would instantly fix the Sky Club crowding issue overnight.
@René A lot of people are probably going to blast me for saying his but Amex is mostly to blame for this and Delta should take them to task for it.
Amex is handing out the Platinum card like candy. They’re offering sign up offers for these cards that are so large that folks aren’t turned off by the annual fee anymore because the large amount of MR points gained easily outweigh the cost.
Add to that the multipliers that they’ve been offering during the past couple of years, 10x on grocery spend, or small business, or whatever they can think of at any random time only makes the Platinum cards more enticing which further makes folks not care about the annual fee because there’s so much more to be had.
Add even more, Amex has been allowing these crazy authorized user bonuses, tossing massive amounts of MR points and allowing 99 authorized users that again, quickly outweigh the cost of the card even if you’re paying $175 per card…doesn’t matter if you’re getting equal or greater amounts of MR points. Toss in some retention offers to keep the Platinum card and the upgrade/downgrade game that is played between the Amex Gold/Green to Platinum that often leads to more points that often outweigh the annual fee of the Platinum and you’ve got a recipe for disaster.
Lastly, without going too much into the hack that I’m sure most know about, Delta needs to consider going back to requiring SkyClub members to swipe the physical card for entry because folks in this hobby are exploiting entry by way of Platinum card numbers and Delta profiles.
So, Amex has ruined Delta SkyClubs by way of the Platinum (and the many versions) cards and Delta is the left holding the bag and cleaning up the mess because my guess is that 80% or more folks entering the SkyClub aren’t SkyTeam elite status customer flying Business/First Class or Delta Reserve card holders.
@2808 Heavy – You seem to have a VERY good grasp of what is going on (are you in my PVT points group?)! 😉
Can I be?!
Me too! 🙂
You have one?
What PVT points group ????? May I join?
@Nina – It is MS focused. You would not be interested. Plus it is locked.
But for equality sake I would think they would then strip centurion access to reserve card holders. No? I like the centurion benefit a lot.
@Jane I absolutely agree that the Delta Reserve should be stripped of the Centurion lounge access, I think it’s only fair.
As a Delta Reserve card holder I wouldn’t care much for losing access to the Centurion lounge access as they’re very limited, often crowded, and in my opinion, SkyClubs are bigger and offer a better environment even if the food isn’t as top notch.
Delta can’t just axe access like that. It will require negotiation with Amex whose business would be affected by such a move. It would be much easier to remove the choice benefit the offers access and require payment.
@Barry – Delta was set to dump the MQD waver for Diamonds before we sniffed it out. I think Delta has way more power to make whatever club access changes they want with or without negotiation with Amex.
Go back to the 2019 announcement where they renewed their agreement for 10 years. It specifically mentions Amex proprietary Platinum cards eligible for skyclub access. It’s part of the reason they upped the fee to $695 to segment versus Reserve. Don’t make the same leap frequent miler did fanning a rumor that Amex was dropping skymiles from MR because of some website glitch. https://news.delta.com/american-express-and-delta-renew-industry-leading-partnership-lay-foundation-continue-innovating
I’m sure DL also gets money from AmEx for those Plats accessing the lounges. So it will also have to reconcile losing a chunk of money coming in the door
So, what are the implications for delta patrons who have the amex card and pay the $500+ membership fee to access clubs?
I agree.
90% of the time I fly on Business class, meaning i have access to the Delta Club, or when flying on American Airlines, u can use their Club as well without the so called “PLATINUMS” ….. if your on comfort or a lesser “class” u can use ur PLATINUMS….. so in this case use ur judgement on how to……..
I agree with some of the others here…and the tea leaves are telling me we’re right. Non delta plat will be able to enter with the same $39 fee as the delta plat. Conversely, it’ll be $39 to enter a Centurion with the Reseve. Amex will then announce another wave of centurions to be built. I also agree with 2808 Heavy…everytime I make conversation with someone in the Sky Club and we get around to how-u-got-in…its 90% of the time , ” oh I have an Amex Platinum Card”. Is that scientific? Nope. But Delta knows exactly how people are getting in! Let’s see what happens!
If they stop giving Amex Plat holders access, they should definitely stop Delta Reserve holders from getting Centurion access. It makes no sense to allow them. Cutting Delta Plat access should be the first thing they do.
@Bob: My thought was put a fee on the Plats coming into the Sky Club and vice versa for Reserves entering the Centurion. To me…that’s a fair trade.
@TravelWarr I think that’s a fair trade. In my opinion, SkyClubs tend to be better and bigger than most Centurion lounges anyway so there would be no loss for me as a Reserve card holder.
I agree something needs to change. Access to clubs used to be a coveted chase, and now it is too easy. Personally I don’t think any Amex card should get you automatic access to a Skyclub, Amex lounge sure, but Delta needs to make sure that regardless of the credit card you have, you need to be platinum or diamond in Delta status to get access. IMO
@Kyle If they don’t offer SkyClub access to their Reserve card holders then they’re going to have to rethink that entire card because shy of the club access, it’s going to be a really hard sell to get someone to pony up $550 for the Reserve card and an additional $175 for an authorized user when the card has no other worthwhile benefits.
Some may say the companion pass but it’s to incredibly hard to use most of the time due to fare buckets that it won’t be very appealing to most folks and they’d lose terribly on this specific card is they were to yank SkyClub access as I’d imagine that’s the only reason anyone with the card actually has it.
Folks want to axe Amex Platinum card holders from the lounges. Sounds like a no brainer – except that Delta has clearly run the numbers and believes that the extra business they generate on the actual airline side of the house as a result of their Amex partnership must be worth the cost of granting club access. Speaking as a sample of one Amex Platinum card holder, I have spent several thousand dollars on Delta airline tickets in the past two years that would have gone to other airlines if I didn’t get Delta lounge access via my Amex card. I’m sure I’m not alone.
This is 100 percent true for nearly every amex plat holder I know. They fly exclusively with Delta for this perk. If it’s dropped or significantly altered, I think you’ll see a shift away from Delta from amex plat users and perhaps even a lot of plat holders drop to chase given their priority pass is more expansive than amex and it would make up for the airports where you could use the restaurant features that lack priority pass lounges.
@Earl B, I’d be willing to be that there is a lot smaller group of folks who select an airline based on lounge access like you do. Most folks are hub captive and rarely have many options (or at least decent ones) when it comes to flying. If you’re in ATL and you’re wanting to avoid Delta, sure you can, but you’ll probably going to spend a lot more time connecting elsewhere just to avoid them.
Same for someone who is AA captive by way of DFW…sure you can fly someone else but how many times are you going to choose a connecting route vs a nonstop just so that you can take part of an airport lounge? I doubt many people are going to do such.
I am in SoCal. Can fly from SNA or LAX (or ONT or SAN if I really need to). Will fly UA, AA, SW for best deal. Rarely flew Delta before getting my Amex card. Now Delta gets first look, if they are at least competitive.
While my anecdote is note “data”, I am with Earl here. There are millions of people who are not specifically hub captive; the entire west cost gives plenty of options. I fly in/out of PHX, so can choose UA/DL/AA for international, plus SWA/AL for domestic; Delta lounge access means DL is suddenly attractive as a partner .With the Plat, AA is a better choice, because the Centurion and larger Escape lounge are in T4 (with AA & SWA) and T3 (Delta/United) has a small Escape but a nice Skyclub. Eliminate my DL lounge access, and AA moves back to the top of the heap for me. Given the issues with lounges at PHX discussed on Flyertalk, we are definitely not alone in this sentiment.
I’m in DFW, but always fly Delta.
@Earl B @Origami @Kathy Color me surprised. I honestly never knew, or would have guessed, that folks picked an airlines based on lounge availability. I know of folks avoiding LCCs and ULCCs for various reasons but didn’t realize how much folks value drinks and snacks.
I like the SkyClubs and a few others as well but not any of them enough to take a connecting flight for. Full transparency, I never want to get to the airport earlier than necessary on departure and usually will only venture into a lounge if I couldn’t avoid an unusually long connection or for some reason a flight is delayed.
But I do stand corrected as I truly didn’t believe that lounge access was as big of a deciding factor as it obviously is.
Free food and drinks for two people, a superior restroom, and more comfortable seats in a quieter, safer environment than out in the main terminal, make a big difference. I won’t switch from non-stop to one-stop, but an available lounge will definitely affect my choice of route, all other things being close to equal. The longer the trip, the more true that is.
I am fine with everyone having a limit to the number of visits. Why should someone who uses a lounge 200 times a year “pay” the same as a person who uses it 4.
Perhaps because they’re the ones bringing revenue into the airline? The lounge exists solely for Delta to make more money.
In my humble opinion, I work hard to get and maintain my status by FLYING not getting another credit card, why should someone who devoutly flys an airline be pushed aside from an upgrade or club access by someone who just has a cc and flies a few times a year?? A bit irritating or am I just being a snowflake?
@Paul Pavloski I don’t think you’re being a snowflake at all. I just think you’re finally seeing that airlines make more money by selling points and miles to banks than they do to rev pax and for that reason folks like yourself who are truly loyal to an airline are no longer seeing the return for your loyalty that used to exist in years past.
Unfortunately, it’s going to get worse. Think back to the start of the pandemic…most banks (along with the government) helped keep the airlines and hotels afloat by purchasing massive amounts of points and miles even when no one was traveling so that the airlines and hotels could benefit from the cash immediately.
Amex bought millions of dollars in points and miles from Delta, Hilton, and Marriott…and those companies in turned used that money to keep their heads above water when we were all stuck at home, not traveling.
These hotels and airlines know who helps to keep their lights on and that’s who they cater to…and unfortunately, rev pax aren’t the ones who rank highest in their food chain anymore.
We are at the centurion lounge in Las Vegas. We visited the guy club in Detroit before we left Detroit for Vegas. There is no comparison. The sky club really has upped her game. The offerings and service or standing compared to the platinum club
We are at the centurion lounge in Las Vegas. We visited the guy club in Detroit before we left Detroit for Vegas. There is no comparison. The sky club really has upped her game. The offerings and service or standing compared to the centurion club. About the only thing they have better at the centurion club busy offering for alcohol. Bravo to Delta for changing the way they do things in the sky clubs. Hopefully they keep it up.
I think a lot of the crowds are truly going to die down the moment Amex turns the MR printing machine off. When Platinum cards offers return to the normal 50-60k offers that we used to see back in 2017 and no lifetime language comes roaring back.
When the retention offers become once every other year and the POT offers slow down and we’re back to getting the usual 55k MR cap on referral offers per card and there’s no more +3 or +4 offers on referrals….you know, when Amex circa 2017 comes back.
If or when that happens and folks see the Platinum card for the food stamp/coupon stamp book that it is, the crowds will naturally thin itself…because no one cares enough about Dell, Equinox gyms, or watching reruns of Everybody Loves Raymond via the Peacock streaming credit to pay the high annual fee that is the Amex Platinum.
But as I mentioned earlier…as long as the MR printing machine keeps humming along and Delta doesn’t put their foot down, the long lines will continue to wrap around the terminals.
Totally bad news!! We pay too much for Amex Plat to not have access esp when we fly DL most of the time !! Bad very Bad
Hi René
Unpopular opinion here: I don’t think that regular Platinum should be cut off. I do, however, think that amex should stop offering the platinum fee waiver for certain audiences. Plats pay $695 for a travel card and if you take away the SC access, it will drastically reduce the numbers that use it IMHO since centurion clubs still aren’t plentiful enough.
Heck, I stay loyal to Delta because of the Amex platinum and the availability of the SC. Their reserve card is useless to me since they’ve absolutely crapped on the value of their miles. Why use Delta rewards when I can transfer MR to an international airline and spend half the points/miles?
In Detroit, 75% of the customers accessing the Sky Club lounges are only getting access because of an AmEx card. That’s from trusted veteran lounge agents. Allow platinums and diamonds with any AmEx card unlimited access. Limit everyone else to three or four visits per year WITH NO GUESTS.
My wife and I both hold Lifetime Executive Sky Club memberships——-wondering how that level will fit into any revised admission priorities?
Adding to the demand is the grandfathered Executive level provision that admission criteria includes Sky Club admission when traveling on any airline as long as you hold a boarding pass bearing today’s date. Jim E