Delta Airlines is still, yes still, blocking middle seats and will continue to through April 30th, 2021.
That’s far longer than most airlines which briefly dabbled in capping flights to allow for more social distancing on board, and comes amid a borderline booming recovery in domestic air travel, which sees many planes flying full.
So why isn’t Delta capitalizing and filling every plane to the brim? Because Delta made a gamble, and now data appears to show that it paid off, and may continue to.
Delta’s Winning Passenger Premium
Delta Airlines is making more revenue per seat mile, a common metric used by airlines to calculate the average price paid per passenger, than other US airlines right now. Going further their ‘revenue per mile’ figure suffered less in year over year trends than competitors.
This is precisely the bet Delta CEO ED Bastian made at the start of the pandemic: make customers feel comfortable, make flying feel less ‘nickel and dime’ transactional in a time of public health need, and passengers may pay more for the peace of mind, or show stronger future loyalty as a result of the gesture.
According to data from Travel Weekly, Delta’s revenue per seat mile dipped just 1%, during the pandemic while competitors including United and American, saw dips of over 3% and 9% respectively. Delta’s figure stands at 17.79 cents per seat mile flown, also ahead of both competitors, which shows Delta makes more with each mile flown.
Long story short: Delta’s gamble appears to have paid off, though there are other factors worth considering for a more complete picture.
American Airlines made fewer flight reductions than others, hoping to snap up customers booking based on schedule or price, which puts more pressure to sell seats at lower prices. The airline’s drop may not be nearly as grim as it appears on the face. Delta avoided that scenario almost entirely, which could also factor in the figures.
Delta’s apparent strategic win is the latest example of cat and mouse played between US airlines, each looking for an edge, sometimes by doing more for passengers, and other times by removing everything but the wings.
US Airline Competition: Up and Down
For the last decade, it was fair to class most US airlines as being engaged in a race to the bottom. Like an alligator taking prey under, they challenged each other to see how much could be stripped away from the traditional airline experience, without losing customers.
The ‘competition’ saw the removal of checked bags from most fares, and for some airlines, the removal of seat back entertainment as well as anything resembling good or nutritious food.
Delta though, was the first to turn the trend around, removing the most restrictive features of basic economy and adding seat back screens to more planes than others, as well as snacks on longer flights. It also refined its business class to become the only major US airline with privacy doors on flagship ‘Delta One’ seats.
With domestic travel recovery expected to continue through 2021, and glimmers of hope for initial recoveries in international travel from the second half of the year, US airlines are now keenly focused on luring customers back. Whether Delta’s revenue premium holds, as more and more people return to travel remains to be seen. It’s expected that it will.
Whether it does or not, it was a welcome change in tactic from an airline choosing to put health and goodwill above short term profits, in an industry rarely known for long thinking foresight.
If, in the long term, figures appear to hold, and Delta maintains a revenue premium over other US airlines, we may see a race to the top again.
Thank you Delta. Your Goodwill shall not be forgotten.
My wife and I are flying LAX to Boston this week on Delta. Two seats on Delta with a free blocked middle seat was cheaper than buying three seats for two people on Jet Blue to avoid being elbow-to-elbow with a stranger who may or may not have COVID. Clearly we aren’t the only people who really value the extra social distance.
I’m a delta loyalist and, for me, their strategy has backfired. They have cut out all frills, including meals on cross-country flights, but have not reduced premium class pricing whatsoever. Sorry, but I’d like breakfast and coffee if I’m traveling across the country at 8 AM. If others feel that it’s “risky” (despite no data to support such an assertion), then they can politely decline the meal service. I think Delta has taken advantage of the covid situation by cutting services.
Yep, I completely agree. I’m a PM, and the way they block some seats is just stupid. B717, the A/B side can be completely filled, but they still block F seats? They also block 2 F seats for a flight attendant. If people are still worried about the flu, they need to stay home (117 MQS last year, with 105 of those coming after 3/21/2020).
No matter the reason, what they have done is great. Had to fly American and Delta during these times and Delta was amazing. American was scary. That’s why I now own shares of Delta, a Delta sky miles credit card, and will only fly Delta as much as possible! Thank you Ed Bastain!!
I disagree that the gamble paid off. The data shows it’s not earning so much more than its competitors to make up for a 33% decrease in available seats by blocking middle seats (assuming 3×3 layout).
Further, airlines are still beholden to high paying business travelers who aren’t flying that much now. So that means it’s earning the loyalty of…low paying VFR travelers?
Yes, customers may appreciate it and yes it may earn goodwill but it’s not earning more money today. An argument can be made it may help it tomorrow but it first needs to survive that long.
If Delta didn’t lose the high paying business travelers, who sat on the sidelines impressed by the airlines moves… that revenue figure will only go up when they return. In the meantime, they picked up a segment where margins may not be as fat, but proving a revenue premium can be achieved proves that a race to the top could be beneficial.
If business travelers AREN’T traveling, why wouldn’t you try to win another segment in the meantime?
Delta is my preference for travel. Impressed with how clean everything is. I saw the employees remind people not only to wear their mask but how to wear them. Love the empty middle seat. The flight attendants were making frequent passes, offering cleaning wipes. Glad they have the entertainment system. I’m a big Delta fan.
The gamble may have paid off, but the folks who are “loyal” to Delta today, are the same folks that will be bashing it next month when Skypesos get devalued again. It’s all a cycle.
Is it possible to devalue Skymiles any further ; )?
Delta lost $12.4 billion in 2020. American only lost $8.9billion.
And the losses were 100% accounted for by airfare sales? I don’t think so. No.
Are we just gonna ignore Delta’s loyalty program…?
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