Per Bloomberg, Delta is convinced of its proven operational superiority — so much so that Delta is now offering to refund business customers if on-time performance ever lags behind United’s and American’s.
Now, let’s unpack this, because while it is the sort of gimmicky soundbite that will grab the attention of travelers and journalists, you’ve got to peel back the layers to get to the reality here.
Bloomberg notes that:
If American and United beat Delta’s on-time and completion rates for a year, Delta would award travel credits of $1,000 to $250,000 to businesses with a contract. Those who suffer the most delays and cancellations get the biggest payouts.
So, first things first, Delta is not going to pay the average casual traveler if a flight takes off late.
Delta is not even offering to pay Diamond Medallions if their flights are late.
Delta’s offer appears to be targeted towards corporate customers in Delta’s SkyBonus program. And even in that case, Delta’s not paying a penalty each time a flight is late; rather, Delta is only offering to reimburse its corporate clients if American Airlines and United Airlines beat Delta’s on-time and completion rates over a full year.
As the article also points out, this methodology applies only to Delta’s domestic mainline flights.
So while your ears may have perked up upon the news of a Delta “on-time guarantee,” they should probably remain unperked, for now, at least.
What this seems to be, to me, is a bit of territory-marking on Delta’s part to call attention to its exceptional operational performance, and to essentially challenge American and United to even come close. The truth is, American and especially United lag far behind Delta on these statistics, and likely will for the foreseeable future unless there are some dramatic paradigm shifts in Chicago and Dallas.
Basically, taken at its most sincere, Delta’s move is, if anything, a pledge to its best corporate customers that Delta won’t let up slack and will continue to focus on maintaining its leadership as the best domestic airline from an operations standpoint.
From a cynical view, it’s an empty offer that Delta can confidently announce with 99% certainty it will never have to pay up, but that will generate goodwill and press coverage nonetheless.
Either way, it’s not bad news coming out of Atlanta, and on this blog I celebrate any little news item that takes away from Ben’s delightfully myopic “American Good, Delta Bad” narrative. 🙂
There is no good and bad. There is terrible though, and that is what Delta is.
Would you think it is a goodwill offer if your spouse or partner pledged to be monogamous only if you never have an argument?
@Nick
I used to work for a regional airline, and TBH, the notion that only mainline routes are really under the mainline carrier's control is a bunch of BS. I realize the major airline propagates that notion just as much as anybody, but...
The majors control the schedule, they control the routes, they control the slots, they control how much the regional carrier gets paid... the only thing they don't do is directly pay the pilots and the mechanics.
@ Nick -- this reminds me of a local furniture store running a promo tied to oil going above $85 a barrel. Except oil is more likely to occur, lol.
@GringoLoco: Well, I don't think anyone's arguing that this is an especially useful announcement, but it's not like Delta is taking anything away. They're just trumpeting a new benefit that's highly unlikely to ever materialize.
Your "NO soup for you" analogy implies soup was being served in the first place. No one is worse off for this announcement. Again, not saying this is anything other than Delta's communications department figuring out a great way to...
@GringoLoco: Well, I don't think anyone's arguing that this is an especially useful announcement, but it's not like Delta is taking anything away. They're just trumpeting a new benefit that's highly unlikely to ever materialize.
Your "NO soup for you" analogy implies soup was being served in the first place. No one is worse off for this announcement. Again, not saying this is anything other than Delta's communications department figuring out a great way to get some free press, but the fervent anti-Deltites (to expand on the Seinfeld terminology ;-)) are seeing this as Delta doing something bad which I don't quite get.
Since only mainline routes are considered by the FAA in on-time/continuation stats, I'm not sure the exclusion of RJ carriers is smoke and mirrors so much. (Plus, only the mainline routes are really under Delta's control...?)
Do you think they paid for a Lloyds of London insurance policy or are self insuring the promo?
One more addition: as Nick stated, the chances of DL mainline performance ever being caught by UA is laughable under the current Jeff'd management. AA -- who knows? Let's get through the merger and see what comes? Doubtful IME but what do I know?
But here's the thing -- DL goes through this entire smoke/mirrors exercise for ???? *SMDH*
As Gary noted, if you are a large corporate customer and book away from DL due to a meltdown, NO soup for you if your revenue falls below 95% of the contracted spend. Essentially, smoke...
Further, the guarantee only applies to mainline DL, not the regional carriers. And as is normal for all the legacies, the regionals tend to drag down the mainline numbers. And the corporate contract revenues usually are DL as a whole...
As Gary noted, if you are a large corporate customer and book away from DL due to a meltdown, NO soup for you if your revenue falls below 95% of the contracted spend. Essentially, smoke...
Further, the guarantee only applies to mainline DL, not the regional carriers. And as is normal for all the legacies, the regionals tend to drag down the mainline numbers. And the corporate contract revenues usually are DL as a whole entity including the regionals. So, if your company is having horrendous reliability issues on DL regional partners and books away, NO soup for you. Essentially, mirrors...
In sum: smoke, mirrors, and Delta. Que sorpresa!
Not Skybonus -- this is for corporate contract customers.
They only pay out if they lag both United and Delta for a year. It only applies to 'controllable' performance. And they only pay companies who meet 95% of their contracted spend EVEN THOUGH Delta performed so badly.
http://viewfromthewing.boardingarea.com/2015/08/05/skymiles-may-be-last-in-class-but-your-boss-will-make-you-fly-delta-anyway/