Quantcast

Delta Air Lines outlines plan for new premium seating strategy

Research
Webp uefmsw7k0lt5f20uxuve40u9xjr0
Airbus A380 | Airbus

Delta Air Lines President Glen Hauenstein announced plans to add premium seats to planes during his speech at the Morgan Stanley 12th Annual Laguna Conference. He noted a significant shift in profitability, stating, "The biggest money-losing cabin used to be the premium cabins. And after years of reengineering and years of changing policies and moving distribution, improving distribution, now those are the most profitable cabins on the airplane."

The airline plans to unveil further details at their November Investor Day, including an initiative to unbundle premium cabin fares under a concept referred to as “basic business” or Delta (Less Than) One. This move aims to introduce more seats and cater to different customer segments.

Hauenstein's comments reflect broader industry trends where airlines like British Airways, Emirates, Qatar Airways, and Finnair have already implemented similar models. These carriers have introduced charges for services traditionally included in business class fares such as advance seat assignments, lounge access, and checked baggage.

Get the Newsletter
Sign-up to receive weekly round up of news from Sky Industry News
By submitting, you agree to our Privacy Policy and Terms of Service. By providing your phone number you are opting in and consenting to receive recurring SMS/MMS messages, including automated texts, to that number from our short code. Msg & data rates may apply. Reply HELP for help, STOP to end. SMS opt-in will not be sold, rented, or shared.

For instance, Finnair's model requires passengers with business class tickets from Europe to Asia to check in with economy passengers and pay for checked bags while being denied lounge access. Delta believes adopting such measures will allow them to charge current premium customers more through a la carte pricing while filling excess seats with basic business passengers.

Currently, Delta offers business class upgrades to coach passengers for as little as $299 if they anticipate empty seats. However, they aim not to cannibalize revenue by ensuring these remain distinct products from higher-priced fare options.

While the idea of Basic Business is intriguing for segregating high-fare passengers from low-fare ones without losing revenue opportunities, no successful implementation has yet been achieved.

Additionally, much of the benefit derived from unbundling domestic economy is driven by tax advantages that do not apply internationally. Thus far-reaching implications may be limited domestically due to fewer premium passengers compared internationally.

Delta has been striving over the past decade to monetize first-class offerings better. Historically upgrading 90% of first-class seats with frequent flyers by 2018 was deemed impractical by CEO Ed Bastian who called it "stupid." While eliminating first-class domestic upgrades entirely didn't materialize fully; treating extra legroom coach seating as an 'upgrade' became a strategy along with shifting top elite confirmed upgrades into premium economy versus business class.

Aircraft reconfiguration could include adding both first-class and Comfort+ seats alongside premium economy on international flights. Delta envisions itself as a premier airline catering primarily towards high-paying customers—whether this niche market continues growing remains uncertain but will undoubtedly attract attention come Investor Day.

Organizations Included in this History
More News

Lufthansa Group has announced the appointment of Felipe Bonifatti as Vice President Asia Pacific & Joint Ventures East. Based in Singapore, Bonifatti will oversee all commercial activities, including Joint Venture sales, in the Asia Pacific region starting November 1, 2024.

Sep 26, 2024

Union leaders from over 30 countries gathered in Galway this week for the UNI Property Services Global Conference. The conference focused on building union power in the cleaning and security sectors, with delegates voting on strategic initiatives to address low wages, job insecurity, and unsafe working conditions. These initiatives will guide the sector's actions for the next four years.

Sep 26, 2024

Air France is set to enhance its onboard Wi-Fi service, marking a significant move towards providing an upgraded travel experience. Starting in 2025, the airline will gradually introduce ultra-high-speed connectivity for passengers, aiming to offer a "ground-like" internet experience. This new service will be free of charge across all travel cabins and accessible by logging into a Flying Blue account. The rollout will eventually cover all Air France aircraft, replacing the current Wi-Fi offering.

Sep 26, 2024

Eleven civilian employees of the Puerto Rico Police Bureau (PRPB) have secured a favorable ruling in their federal class action lawsuit against both their employer and the Union of Organized Civilian Employees. The lawsuit accused these entities of illegally discriminating by removing an employer-provided health benefit from employees who chose not to join the union. These employees argued that this action violated their First Amendment rights to abstain from unwanted union affiliation, receiving legal support from National Right to Work Legal Defense Foundation attorneys.

Sep 26, 2024

After a summer marked by the excitement of the Paris 2024 Olympic and Paralympic Games, Air France teams attended the IFTM Top Resa trade fair for three days filled with announcements, conferences, and meetings with tourism professionals.

Sep 24, 2024

A group of Michigan security guards employed by Triple Canopy, Inc. has voted to remove the power of United Government Security Officers of America (UGSOA) union officials to mandate union dues as a condition of employment. The vote, known as a "deauthorization" election, took place by mail in April and May, but the National Labor Relations Board (NLRB) only recently released the full vote count.

Sep 23, 2024