Over time, we’ve seen the concept of “basic economy” become pretty widespread, whereby the cheapest economy fares include the fewest perks. The purpose of this is twofold — to expand a carrier’s potential customer base, and to get existing customers to “buy up” to a higher fare, in order to avoid punitive restrictions.
Internationally, we’ve also seen some airlines introduce basic business class. Up until now, it’s not really a concept we’ve seen at one of the “big three” US airlines. However, that’s almost certainly going to change in the near future.
For some time, Delta has been transparent about its intent to introduce basic business class. While there still hasn’t been a formal announcement, executives at the airline provided more details during the company’s 2025 earnings call yesterday, including sharing a timeline. We can potentially expect all of Delta’s cabin products to have “basic” fares before the end of 2026!
In this post:
Delta plans “basic” premium cabin rollout in 2026
For the past couple of years, Delta executives have consistently talked on earnings call about plans to unbundle business class, among other cabins (primarily based on responding to questions from analysts).
What would that mean? Well, it would entail more options when booking a business class ticket — the most “basic” business class fare would probably just include a seat and some limited amenities, and then customers could pay extra for fare bundles that include more things, whether it’s seat assignments, lounge access, or flexibility.
During yesterday’s 2025 earnings Delta, TD Cowen Analyst Thomas Fitzgerald asked Delta executives about the latest on revenue segmentation:
“Just curious on, at Investor Day, you talked a lot about the revenue segmentation and further aligning value with price. So I’d love to hear what’s next for that this year. And then on the technology side, just curious with all the advances we’re seeing every day, where do you guys see some low-hanging fruit as we move through 2026?”
Delta President Glen Hauenstein gave a pretty detailed answer, with more information than has been shared in the past:
“I think we’ve talked about really having three categories for every product, which is basic, main, and extra. And that continues to evolve. I think we put those products in place for Comfort+ earlier in the year, and that implementation is producing results that are actually slightly above our internal projections. So as you see us continue to bring that and move that up the ladder to give customers choice not only of the seat, but the actual product that they want to buy with that seat and really disaggregating that out. And that should be rolled out pretty much throughout ’26 and as part of our initiatives and our Delta initiatives in our plan.”
“And hopefully, those exceed our own expectations of how people select because I think that if you were offered a $500 ticket, there was no reason for you to ever want to pay more than $500 because it was fully loaded. Now we have that seat is $500, but you can buy it for $450 if you’re willing to get the seat assignment at 48 hours, if you’re willing to have it nonrefundable and then all the way up to extra where it’s fully refundable and you get the best seats unlocked at that time. So I think it’s the seat and then it’s the product attributes, and we’ll be bringing that in ’26. That’s one of our ’26 initiatives.”
“If you look further out, this continues to be a multibillion dollar opportunity to add high-value, lower cost, lower margin, higher-margin products that we don’t have on the shelf today. And that’s really what our retailing tools are going to enable over the next several years.”
We’ll see how this plays out, but it sounds like before the end of 2026, we could potentially see Delta unbundle all of its cabins, including international business class, domestic first class, premium economy, and more.
Outside the United States, there are quite a few airlines that have unbundled business class, ranging from Emirates, to Finnair, to Qatar Airways. In general, I would expect that “basic” business class could include some of the following restrictions, based on the precedent we’ve seen at other airlines:
- Fees or restrictions on seat assignments
- Fees to change tickets
- Limited mileage earning or status qualification
- No lounge access or restricted lounge access
- Restrictions on priority check-in, priority security, and priority boarding
My take on Delta unbundling premium cabin fares
Since the start of the pandemic, we’ve seen strong leisure demand for premium cabin travel, while business travel hasn’t fully recovered. This combination is a double-edged sword — it’s easier to fill premium cabins, but airlines aren’t seeing as many of the super expensive premium fares as they saw before the pandemic.
I would think that Delta’s primary goal with unbundling business class would be to get people to buy up to more expensive premium fares to avoid certain restrictions. I know airlines try to market unbundling as intending to offer a better value option to more travelers, though in reality, I suspect the cheapest current fares would often become the new “basic” fares, where fewer perks are included than now. So most consumers likely wouldn’t come out ahead.
Personally, I think the most logical implementation of an unbundled premium cabin would be in domestic first class, at least to start. I hate to say it, but this could be a way for Delta to reimpose change fees on tickets, by making these tickets not changeable or cancelable without paying a fee. Maybe the airline wouldn’t include seat assignments in advance, or something, but I wouldn’t expect it to be too draconian beyond that.
Unbundling business class on long haul flights is a bit trickier, as it’s a coordinated effort. That’s because so many long haul markets are dominated by joint ventures, which coordinate fares, schedules, and restrictions. Delta has a joint venture with Air France-KLM and Virgin Atlantic across the Atlantic, and with Korean Air across the Pacific, so we’d likely see this implemented on a wider scale.
In addition to the above potential restrictions, I wonder if we could maybe see the airline offer Sky Club access on basic business class tickets, while restricting Delta One Lounge access to non-basic business class tickets.
Keep in mind that Air France-KLM have already added seat assignment fees in business class in many markets, and in some ways, perhaps that’s one form of unbundling business class. I mean, I guess by that criteria, British Airways’ business class has been unbundled for a very long time.
Delta recently unbundled its extra legroom “Comfort” cabin, with the three fare tiers for that seating. I think that probably gives us a pretty good sense of what we can expect with unbundling of more premium cabins.
Bottom line
We’ve known for a couple of years that Delta plans to unbundle its premium cabins, including domestic first class and international business class. We’ve learned progressively more details as time has gone on, and Delta is now suggesting that this could be fully rolled out in 2026.
We’ve seen the concept of basic business class at some foreign carriers, and you can expect that this will likely include restrictions related to change fees, seat assignments, priority services, mileage earning, etc.
I think Delta is most likely to use this as a way to reimpose change fees on many premium tickets, in order to get people to book more expensive fares. I also think it’s safe to say that when Delta does go this direction, American and United will almost certainly follow.
What do you make of the prospect of Delta unbundling business class?
Basic business reminds me of airlines like Zip air and will get the customer to consider what is really important to them. This said I can imagine arguments with customers and staff regarding benefits.
Been a longtime Delta flyer, had the good fortune to make diamond a couple years thanks to some int'l business travel combined with some personal travel.
However, 2025 was the year I ditched Delta loyalty and am now a free agent. Delta's pricing has gotten insane. I'm not excited about the 'basic business' and I'm not going to consider paying 3x economy fare for a business seat where I'm still hungry and thirsty the entire...
Been a longtime Delta flyer, had the good fortune to make diamond a couple years thanks to some int'l business travel combined with some personal travel.
However, 2025 was the year I ditched Delta loyalty and am now a free agent. Delta's pricing has gotten insane. I'm not excited about the 'basic business' and I'm not going to consider paying 3x economy fare for a business seat where I'm still hungry and thirsty the entire flight due to no drinks or food service. So -- no thanks.
Could someone remind me - is it still a 120% bonus for mileage earning on "Extra" fares (so you'd earn 15.4 miles/dollar as a Diamond) or just a bump of 6 miles/dollar (so you'd earn 13 miles/dollar as a Diamond)?
One thing that would make me more likely to buy up to Extra is if, in addition to earning more MQDs/dollar you also got a bit more towards lifetime status.
American aviation once again of sync with the rest of the world. No wonder the rest of the world is decoupling from Trumptopia / Dumbfuckistan
Why, Oh why, are Americans so fixated upon “Points”, “Status” and “Upgrading”, etc?
You are now seeing the thin edge of the wedge, unbundling will undoubtedly, ultimately lead to higher prices for the traveller. You will receive even worse services than currently available, alternatively, you will pay a higher price for the same mediocre offerings.
If you want to visit a quality lounge, travel in a better cabin, occupying a better seat and eat better...
Why, Oh why, are Americans so fixated upon “Points”, “Status” and “Upgrading”, etc?
You are now seeing the thin edge of the wedge, unbundling will undoubtedly, ultimately lead to higher prices for the traveller. You will receive even worse services than currently available, alternatively, you will pay a higher price for the same mediocre offerings.
If you want to visit a quality lounge, travel in a better cabin, occupying a better seat and eat better cuisine …. then bleeding we’ll pay for it you stingy b’s, yes?
Americans are obsessed with points because it’s what we get as nominal compensation for letting the banking sector screw us at ever turn. Americans love a good distraction from being taking advantage of.
Shudder …. I was laughing out loud when I read your comment. Thank you for brightening up this damp (typical) day here in the ‘Shires”
Your comment received a well deserved ‘helpful’ tick.
and yet foreign airlines are the ones that led with unbundling of premium cabin fares with US carriers following.
Your narrative doesn't work quite as well with that reality
@Lying Tim Dunn, How many billions in profit did DL execs say they would make on this during their Q4 earnings call?
rebel,
you clearly can't accept reality so you alter it and call names.
DL hasn't even launched basic business class but Ben accurately notes a number of carriers that already have it.
US carriers are not leading in unbundling the forward cabin even if they (specifically DL) did among legacy/global carriers w/ economy
Lying Tim Dunn said, "feel free to read what DL execs have said about the MRO deal. Delta has said that their MRO will generate $5 billion in revenue at 20% margins. Just because you can't find it doesn't mean it isn't real."
Delta CFO Dan Jenki actually said, “I think this is a business that we are excited to see it cross the $1B mark ($826M for 2025) and one that we continue to...
Lying Tim Dunn said, "feel free to read what DL execs have said about the MRO deal. Delta has said that their MRO will generate $5 billion in revenue at 20% margins. Just because you can't find it doesn't mean it isn't real."
Delta CFO Dan Jenki actually said, “I think this is a business that we are excited to see it cross the $1B mark ($826M for 2025) and one that we continue to hold out to see it as a 2, then getting to 2 and then getting to $3B top line and that it can continue to grow. This is a business where it is in a position that it is in the high single digits (margin) and it should be in the mid-teens.”
lol AeroB13a - i live in switzerland now and there are just as many people fixated on status here as in the us.
i take no issue with your second argument, you are correct here
sure, whatever
Perhaps it works in general but it's a great way to lose my money. I almost never book business class from airlines that don't include seat selection, fast track and lounge access in the base price (unless I get those via status). Besides hating it on principle, once you set my expectations low, adding 300€ extra always makes the fare seem expensive, even if I'd be happy to accept it had it been shown from...
Perhaps it works in general but it's a great way to lose my money. I almost never book business class from airlines that don't include seat selection, fast track and lounge access in the base price (unless I get those via status). Besides hating it on principle, once you set my expectations low, adding 300€ extra always makes the fare seem expensive, even if I'd be happy to accept it had it been shown from the first step.
Another reason to avoid these airlines is the lack of transparency, I can't be bothered to go to four different websites and trying three different combinations of packages/a la carte extras to figure out which option is the best. These days my brain basically filters out AY or QR out of any search results because I know that the displayed price is fake.
The only time I book with airlines like these is if they're *extremely* cheaper than any alternative. Which happened exactly once in my lifetime when EY was 2000€ for a return to TPE (incl. lounge and seat selection) whereas the next reasonable alternative cost something like 2900€.
I knew this was coming, having read it at places like this. That was reinforced when I bought this summer's Europe trip. My travel class is "First Classic" and "Delta One Classic" in the app.
Congrats DL. As much as I would like to grab D1 international for less by skipping current features, I'll likely take the whole bundle at even a slightly elevated price vis-a-vis today's D1 prices.
The seat assignment is...
I knew this was coming, having read it at places like this. That was reinforced when I bought this summer's Europe trip. My travel class is "First Classic" and "Delta One Classic" in the app.
Congrats DL. As much as I would like to grab D1 international for less by skipping current features, I'll likely take the whole bundle at even a slightly elevated price vis-a-vis today's D1 prices.
The seat assignment is interesting. So long as I get a window seat in J on their reverse herringbone jets (332, 333, new 35M, and new 78M), I'm OK. How is any window seats that much better in J? If the risk is I may get a middle seat in J (never have had one, never want one), I'll pony up. Will they charge for "true" window seats on the 338, 359, and reconfigured 332 and 333? Darn them if they do, because I'd pay it. But, what happens if I pay extra to get a true window seat on a 339 or 359 and the plane is switched to a 333 (not yet reconfigured)?
I struggle to understand why anyone with a choice would continue to support and fund this nonsense. Ok - Delta is profitable - but Comcast might be the only other company that actively has as much disdain for its customers and consistently offers less and less and less while charging more and more and more. There's nothing premium about an ancient 767 across the ocean. There's nothing premium about the most chaotic boarding process of...
I struggle to understand why anyone with a choice would continue to support and fund this nonsense. Ok - Delta is profitable - but Comcast might be the only other company that actively has as much disdain for its customers and consistently offers less and less and less while charging more and more and more. There's nothing premium about an ancient 767 across the ocean. There's nothing premium about the most chaotic boarding process of any major US airline. There's nothing premium about a loyalty program that devalues more aggressively than any competitor. As a multi-year Platinum Medallion, I'm thrilled my company finally changed our preferred carrier status to United. Sure, it's ain't perfect. Sure, UA might replicate some of this BS. But, for now, I'm glad to no longer earn miles that get me a return ticket to Europe for 200,000 miles in the most basic economy imaginable. Just booked flights on LOT for 160k points r/t in business. Sure- I had to look for it - but it beats feeling screwed over.
We know a frequent reader with DDS (Delta Derangement Syndrome) will come running to the widget's defense. And to that I say - get a life. And a wife.
Yeah, the unbundling is going to be a hot mess!...or tricky for them. American passengers are not the smartest bunch, are they?
I gave in and flew DL for the first time. It only took over 1,000 flights to try them. My thoughts on an airline that I just did not like (I couldn't put my finger on the unsavoury frequency they give off). Well, I have now encountered the Delta Eco system....and I...
Yeah, the unbundling is going to be a hot mess!...or tricky for them. American passengers are not the smartest bunch, are they?
I gave in and flew DL for the first time. It only took over 1,000 flights to try them. My thoughts on an airline that I just did not like (I couldn't put my finger on the unsavoury frequency they give off). Well, I have now encountered the Delta Eco system....and I went in a little excited to see what the fuss is all about.
Overall, I see some of the hype, but not all. The Sky Lounge I visited was great. Better food selection than UA/AA for sure, and staff that actually cared. DL domestic First was fine, but there was a weird feel in the cabin. Those blue seats with that awful pattern (If you know what that is and what it does to the brain), anyway, awful. I had flown AA domestic First that same week, and I felt it was marginally better than DL, as a direct same week comparison.
The D1 lounge was great in most areas, but not so in others...but it's new, and they tried. I would say the food was similar to the QF First lounges. Why are there "managers" just standing there watching everyone? Odd! I was impressed with the massage spa lounge, and the decently priced departing gift I was given. The D1 experience was fine outbound, but better on their partner airline by far.
The D1 check-in lounge, private TSA security, and then the lift takes you up to the lounge is GREAT! DL took a lot of great stuff from VS LHR, so well done there. Once you experience that, VS or BA's First at LHR, you want it all the time.
I would not leave AA for DL, but also would not actively avoid them. Overall, I did feel that DL staff cared more about the passenger experience than AA or UA for sure. This is what happens when staff have a bonus stake in the company.
When DL get's rid of their horrible livery, and rips out that awful light blue seating (which is tacky AF) - the image will improve....but overall I think they did a very good job, and so will no longer slag them off...haha
* Americans - as in whatever airline they fly... but hey, I see the humor in that statement ;-)
The most popular politician in France is Marine Le Pen, so, looks like the French are not the smartest bunch either.
Oh, don't get me started on DL livery! For many years DL had some classic & esthetically appealing liveries. Not now. Not with those horrendous shades of blue and red. And for those who studied color theory, I emphasize shade as opposed to tint. Tint is exactly what's missing.
And that stoopid triangle shape logo really hocks me off. I've railed on about this for years to no avail. The day DL changes that livery, I will know they finally took my advice... lol!
Spot on Ben, lipstick on a pig, all that. It’s a dressed up price increase, the end. The current best business fares will become the no service option, you pay more, however you want to square it.
It just gets worse and worse with DL and other airlines///And it makes for much more confusion in booking your seat....
What does all this do to status upgrading?
For international DL1, if DL would truly give a lower price for no seat assignment and no DL1 lounge access, that would be fine with me. The DL1 lounges are overrun, and the DL1 seats are all basically the same. The people who really care about these things are the ones that only travel a couple times per year and feel the need to gourge themselves at the lounge and sit together on the plane.
and yet, the indications are that they will cut off D1 lounge access and allow seat assignments in the last day or two.
Even basic economy passengers can request a seat assignment within 24 hours so there is no reason to think DL will impose a more restrictive rule for Delta One.
There are plenty of people that want the whole package and it is not just less frequent travelers. It will also...
and yet, the indications are that they will cut off D1 lounge access and allow seat assignments in the last day or two.
Even basic economy passengers can request a seat assignment within 24 hours so there is no reason to think DL will impose a more restrictive rule for Delta One.
There are plenty of people that want the whole package and it is not just less frequent travelers. It will also be part of the corporate fares that DL will negotiate.
unbundling across the entire aircraft is coming. DL led the big 4 into basic economy and the rest of the industry will follow DL. Just like with BE, there will be different interpretations of how unbundled business class is handled
choice is good.
TD says, "The GE engine overhaul deal that is part of the 787 order will lead to another billion dollars or more in profits within the next couple years."
How do you figure given DAL filed a supplemental on the MRO that delineated the following financials.
$ Millions 2024 1Q25 2Q25 3Q25 4Q25 2025
MRO Rev..$663 $153 $240 .$232 .$201 $826
MRO Exp.. $610 $140 $228 .$212 .$170 .$751
feel free to read what DL execs have said about the MRO deal.
It is a revenue and profit source that no other US airline can touch.
In fact, DL is now or will be one of only a couple airlines in the world that has the right to do every kind of overhaul on every western built new generation engine that is in service; the only thing that DL will not pursue is the...
feel free to read what DL execs have said about the MRO deal.
It is a revenue and profit source that no other US airline can touch.
In fact, DL is now or will be one of only a couple airlines in the world that has the right to do every kind of overhaul on every western built new generation engine that is in service; the only thing that DL will not pursue is the GE engine on the 777X.
DL also says that margins on engine overhauls will move up to healthy double digits as volumes increase.
DL, as usual, is thinking ahead to ways to make its business more profitable than its peers.
The excuse of DL making its profits from hubs where it gets higher market share isn't changing.
Amex is still growing.
The refinery is still cutting DL's fuel cost.
and over the next few years, DL mechanics will help to increase profits for the company and profit sharing for all employees
it's a sweet environment for everyone that is INSIDE the circle.
Sorry, one more engine overhaul authority doesn't take MRO profits from $53M in 2024 and $75M in 2025 to "another billion dollars or more in 'profits' within the next couple years." Sorry, that is complete and utter BS like so much of you other cheers/assertions about DL, but nice try. The BS flag is at full staff!
Here is Delta's supplemental filing.
https://s2.q4cdn.com/181345880/files/doc_earnings/2025/q4/supplemental-info/4Q25-Supplemental-Info.pdf
I read the supplemental filing long before you ever knew it existed.
But we get the drill.
You have been blabbing on incessantly about UA's rate of change was only going to increase and UA was going to surpass DL.
and DL has now upped the game with just $2 billion more to go in loyalty revenues, the refinery is still saving DL about 5% on fuel (which matters a whole lot given that the...
I read the supplemental filing long before you ever knew it existed.
But we get the drill.
You have been blabbing on incessantly about UA's rate of change was only going to increase and UA was going to surpass DL.
and DL has now upped the game with just $2 billion more to go in loyalty revenues, the refinery is still saving DL about 5% on fuel (which matters a whole lot given that the big 3 use about 4 billion gallons of jet fuel per year), and now DL is growing its MRO business to include every new generation model.
I know you are just trying to catch up but read the earnings call transcript and then go back over the past few years and see the growth rates that DL said Tech Ops would generate as soon as the engine supply chain issues are resolved.
Argue until the cows come home - you always do.
Here is what Google says
High-Margin Business: MRO (maintenance, repair, and overhaul) work is a particularly good business because it involves high-tech repairs by specialized technicians, allowing Delta to charge premium fees.
Strategic Positioning: Delta Tech Ops is uniquely positioned as the only shop in North America capable of servicing all three current-generation engine platforms (CFM Leap 1B, Pratt & Whitney PW1000G, and Rolls-Royce Trent XWB), giving it a strong market advantage.
External Revenue Focus: Unlike some competitors, Delta operates Tech Ops as a business unit and profit center, actively seeking third-party business from other global carriers.
and Delta has said that their MRO will generate $5 billion in revenue at 20% margins.
Just because you can't find it doesn't mean it isn't real.
DL has, once again, another advantage which no other airline - at least in the US - can duplicate.
and, to note, even Google hasn't caught up on the GEnx deal which gives DL TWO GE engines, both of which have the largest market share.
“ I read the supplemental filing long before you ever knew it existed. “
This is comedy gold . Maybe it was handed to little Timmy by his wife
Tim Dunn says, "Delta has said that their MRO will generate $5 billion in revenue at 20% margins. Just because you can't find it doesn't mean it isn't real."
WOW! $5B in revenue and $1B in profit that would be a 505% growth in revenue and a 1,233% increase in profit for the DL MRO. That would represent an unprecedented skyrocketing of such a mature business that you piqued my curiosity so I listened to...
Tim Dunn says, "Delta has said that their MRO will generate $5 billion in revenue at 20% margins. Just because you can't find it doesn't mean it isn't real."
WOW! $5B in revenue and $1B in profit that would be a 505% growth in revenue and a 1,233% increase in profit for the DL MRO. That would represent an unprecedented skyrocketing of such a mature business that you piqued my curiosity so I listened to the DAL Q4 2025 earnings call to hear the details of this incredible development and how it could possibly occur. What a disappointment to learn that it was just not so. Not even close. All the people who have watched your DL cheerleading nonsense for too long are more right than even I thought possible.
At 47:30 of the call CFO Dan Jenki said, “I think this is a business that we are excited to see it cross the $1B mark ($826M for 2025) and one that we continue to hold out to see it as a 2, then getting to 2 and then getting to $3B top line and that it can continue to grow. This is a business where it is in a position that it is in the high single digits (margin) and it should be in the mid-teens.”
Absolutely, no timeframe, no $5B in revenue and certainly no 20% margin. They didn’t even mention the GENx maintenance deal or a timeframe for it either. My guess is that after I called you on your absurd claim that the DL MRO would produce "another billion dollars or more in 'profits' within the next couple years" that you must have literally reverse engineered some theoretically plausible though obviously absurd revenue of $5B and margin of 20% to magically get to your BS $1B in profit. UFB.
Many of your critics are obviously correct. Not only are you a nutter, but also an obvious liar.
Meanwhile, UAL's stock price continues to outperform DALs. That's the only thing that matters, right?
of course, Gene, when you can't win the debate based on facts, change the subject.
and, no, UAL stock has not outperformed DAL stock unless you slice and dice out a few specific time periods and exclude just as many others because you don't like the story real data tells.
For the past year, week and today, UAL stock underperformed DAL stock.
and UAL's market cap is at 82% of DAL's which is actually down...
of course, Gene, when you can't win the debate based on facts, change the subject.
and, no, UAL stock has not outperformed DAL stock unless you slice and dice out a few specific time periods and exclude just as many others because you don't like the story real data tells.
For the past year, week and today, UAL stock underperformed DAL stock.
and UAL's market cap is at 82% of DAL's which is actually down from a high of 85%.
As much as rebel or anyone else wants to argue, UA has not closed the profit gap with DL; they were $1.3 billion behind in the first 3 quarters of 2025 and they won't close that gap in the 4th quarter.
UA execs have already said that UA's labor costs will go up and cost it a couple margin points in 2026.
In 2027, DL starts getting the first of its A35Ks - or at least is able to place them in service - and will start aggressively growing in the Pacific where UA has the biggest share advantage. It is precisely because UA is making money on TPAC that DL is going after that. and DL will be growing both the Atlantic and Pacific with far more efficient and capable aircraft.
UA's massive growth spurt and increase in profits is over. They face massive numbers of deliveries going for fleet replacement rather than growth. Their Pratt 777s are on the verge of losing their ability to fly over oceans.
and that is all before the MRO starts kicking in $1 billion which it very well could do in five years.
you do realize there is a good chance that AA and UA will be paying DL to overhaul their jet engines - but DL has been doing it for many other airlines for years.
I don't know if Ben has any more articles that were sourced from info during its earnings call about DL but I absolutely hope he does the same for UA - up next week - then AA and WN and any of the other carriers that will come later in the cycle.
The point is not about having everyone agree but about having healthy discussion and Ben does it that very well.
Some other...
I don't know if Ben has any more articles that were sourced from info during its earnings call about DL but I absolutely hope he does the same for UA - up next week - then AA and WN and any of the other carriers that will come later in the cycle.
The point is not about having everyone agree but about having healthy discussion and Ben does it that very well.
Some other notes from the DL earnings call which Ben has not discussed:
The DL/Amex relationship crossed the $8 billion in revenue for DL in 2025 and is headed for $10 billion in the next couple years according to DL execs.
The GE engine overhaul deal that is part of the 787 order will lead to another billion dollars or more in profits within the next couple years. DL's MRO activity is picking up and they are going to separate out loyalty and MRO revenue just as they do with the refinery to provide even better clarity to investors - and industry watchers - about what contributes to DL's profits and how it compares to competitors.
Everyone should read the earnings call transcript which is available on several sites including Seeking Alpha or listen to the call which is available on the Delta Investor relations site.
There were many industry analysts that praised Glen Hauenstein for his leadership of DL as their Chief Commercial Officer over the past 20 years depending on how long they have overlapped with him. During the call, Hauenstein allowed Joe Esposito to answer larger and larger portions of analyst questions in what has to be viewed as a pretty commendable transfer of power.
There are certainly other topics which could be discussed as there will be with other airlines.
TD, "Everyone should read the earnings call transcript which is available on several sites including Seeking Alpha or listen to the call which is available on the Delta Investor relations site."
But please don't blatantly lie about was said on it like TD regarding the DL MRO.
"During the call, Hauenstein allowed Joe Esposito to answer larger and larger portions of analyst questions in what has to be viewed as a pretty commendable transfer of power."
lol what a weird sycophantic comment, Tim
Hauenstein is a deer tick on the back of the flying public
One benefit of current policy is that I don't have to think about which aspects of business class I want, beyond refundable for cash or refundable for credit on future flights. That's easy. I don't want the hassle or annoyance of thinking about how much I value lounge or seat selection or whatever else they might unbundle, especially if they combine things I might want with things I don't care about e.g., if I want...
One benefit of current policy is that I don't have to think about which aspects of business class I want, beyond refundable for cash or refundable for credit on future flights. That's easy. I don't want the hassle or annoyance of thinking about how much I value lounge or seat selection or whatever else they might unbundle, especially if they combine things I might want with things I don't care about e.g., if I want seat selection I'm also paying for miles or status).
Put another way, part of the appeal of business class is it's essentially a binary decision.
A lot of people literally only care about the lie flat seat
I would be totally okay with a fully unbundled model where even the business class meal or wifi or bathroom visits or amenity kits or priority boarding are monetized on the plane, as long as I can just pay for the lie flat seat
lol imagine having lavatory passes that would be hilarious. Auction yours off to the highest bidder
They may have a ZIPAIR lite arrangement. You get the lie flat seat. However, cannot change your seat assignment, no Skymiles, no meals, only a personal item but no rollaboard, no lounge access, last to board, last to deplane (after economy class), must use economy class lavatory. Later they will take away IFE or qualify it such that if one seat has a broken IFE, it will be a Basic Delta One seat.
since DL has allowed a carry on with basic economy and has had AVOD on more airplanes than any other airline in the world - which certainly means some of them will not work at some point - why do you think, at worst, any of these items would be any worse than what DL does today with BE?
It is pretty clear that they are unbundling parts of the fare and ground experience, not...
since DL has allowed a carry on with basic economy and has had AVOD on more airplanes than any other airline in the world - which certainly means some of them will not work at some point - why do you think, at worst, any of these items would be any worse than what DL does today with BE?
It is pretty clear that they are unbundling parts of the fare and ground experience, not what is onboard. In fact, airlines do not want passengers onboard to know what each other pays so there is a very strong incentive NOT to do anything onboard to highlight basic Delta One passengers.
and AA, UA and every other airline will do the same.
@Tim Dunn as you would say, you do realize, we are over a dozen years into DL’s IFE journey and there are STILL dozens of mainline aircraft (the 717s) without IFE. And, I don’t care what your excuse is, they don’t have it or free WiFi. Yet another inconsistency in DL’s offering. But I’m sure you have an excuse for that.
And, while we’re at it, your argument that DL has more planes with...
@Tim Dunn as you would say, you do realize, we are over a dozen years into DL’s IFE journey and there are STILL dozens of mainline aircraft (the 717s) without IFE. And, I don’t care what your excuse is, they don’t have it or free WiFi. Yet another inconsistency in DL’s offering. But I’m sure you have an excuse for that.
And, while we’re at it, your argument that DL has more planes with IFE is complete gaslighting. First of all, DL has more mainline planes than anyone other airline in the world except UA and AA. We already know AA has gone in a different direction. Meanwhile, UA is refreshing their planes faster than DL and will surpass DL by offer IFE on ALL mainline planes before DL does. The percentage of plane with IFE is what matters, not the total number.
Oh, and, DL’s “Journey to fast free WiFi,” seems to also be leaving out the 717s. So, again, DL and their partial truth and attempt
To convince me that what I’m seeing is not real.
But, hey, you keep blowing smoke up your own skirt. I’m sure the breeze is refreshing.
and yet DL still leads by far the number of aircraft that have high speed free (to loyalty members). DL said this week that they have 1100 planes with high speed WiFi which means more than 250 RJs.
As I have said before, if AA, AS, WN and UA all have 100% WiFi and DL hasn't moved forward w/ it on the 717s, then DL will be at a competitive disadvantage. We are nowhere near...
and yet DL still leads by far the number of aircraft that have high speed free (to loyalty members). DL said this week that they have 1100 planes with high speed WiFi which means more than 250 RJs.
As I have said before, if AA, AS, WN and UA all have 100% WiFi and DL hasn't moved forward w/ it on the 717s, then DL will be at a competitive disadvantage. We are nowhere near that point.
and some reports are that DL is doing extensive maintenance on the wing spars of the 717s which is why they can't take them out of service for WiFi installation - but intend to keep those planes until 2030 as was the original plan.
I suspect a whole lot of you will find that DL will end up w/ 100% WiFi across its fleet and network long before other carriers.
What about top Elite travelers which get things like priority checkin, priority seat assignments in MCE, priority boarding, lounge access (on coach tickets), free same day change, etc. Would this new basic negate these Elite benefits? (making Elite status worthless)
Every airline that's doing 'business light' products has been following the opposite model- elites can buy the cheaper fares and use their status perks to make up the shortfall.
Are they counting on OPM flyers to have "basic" business excluded like most have basic Y excluded from their work travel?
@ Anna -- I suspect so, especially when it comes to those tickets probably having limited flexibility.
So! From the comments thus far, the infighting between the U.S. Big 3 passengers lobby groups has started.
One can only conclude that such unbundling will only lead to a race to the bottom, at least as far as discerning passengers are concerned, yes?
@ AeroB13a -- Perhaps a "race to the bottom" in terms of a subtle fare increase for the average premium traveler. I don't think the onboard experience will be impacted much, since the carriers leading the way in this area were Emirates, Qatar Airways, etc.
It's 100% a race to the bottom in so many ways, Ben
Ben, there are those who probably believe that I am far too critical of the U.S. aviation industry, passenger and manufacturing. However, if the truth be told, I remain severely disappointed that such once great industries are apparently doing so little to actually make themselves great again. Believe it or not it actually saddens me to witness such decline.
@Aero
Why should they, when no matter how bad the service becomes there are still hordes that purchase? They would become great again, if consumers stop consuming and vote with their pockets. But until such a time...
I do believe that you may well have a point, Justin. If the U.S. public wish to act like monkeys, then who can blame the U.S. aviation industries, if they feed them peanuts and heard them like cattle?
Well, the intetion has been made crystal clear
To earn more money
If the airline earns more money it means cost will go up.
"If the airline earns more money it means cost will go up."
I think you meant to say "If the price to the customer goes up, and the customer is willing to pay it, then then airline gets more money."
please let us know what for-profit businesses which you frequent DO NOT have a goal of becoming more profitable.
It is mind-numbing how many people think that airlines exist to please passengers more than they do to make money.
They want to please passengers but not at the expense of making money - and to keep growing their profits.
that is just what successful for-profit businesses do. It has nothing to do with "you"
Florian, "If the airline earns more money it means cost will go up." I assume you mean the price will go up. The price the airline charges is my cost, but their cost of providing the service would seem not to go up.
Tim,when I read a comment like this, I'm reminded of Casablanca: I'm shocked to discover their trying to increase profits here.
Can someone explain why QR does this with Qsuites yet criticism is only reserved for DL? Genuine question
@ Eric Ji -- I'm not sure what makes you think no one criticized Qatar Airways when it unbundled fares? See my post on it at the time, so you can decide for yourself:
https://onemileatatime.com/qatar-airways-basic-business-class/
To be clear, I'm not even "criticizing" Delta for this move. I'm just saying it's probably not good for consumers.
See below. I was just criticizing QR about this.
I'm sure AA and UA will follow with similar products. What concerns me are the domestic flights. DL, AA and UA encourage people to pay cash for first class seats that would otherwise go to upgraders. It muddies the water when suddenly it will be extra for a meal, an extra for seat assignment, my two biggest concerns. Now some of that might be decided how much additional for a meal and seat assignment.
Also,...
I'm sure AA and UA will follow with similar products. What concerns me are the domestic flights. DL, AA and UA encourage people to pay cash for first class seats that would otherwise go to upgraders. It muddies the water when suddenly it will be extra for a meal, an extra for seat assignment, my two biggest concerns. Now some of that might be decided how much additional for a meal and seat assignment.
Also, how would this impact at gate upgrades? Would you still get a meal? If there were more than two open seats could you request a particular open seat?
@ George Romey -- I'm confident "basic" first class would still include meals. So far we haven't seen any airline limit the onboard soft product with "basic" fares.
Um, we have not seen it so far because no US carrier has done this. Now that it is happening, I absolutely envision a scenario with no meal served on a basic fare
My take...DL's ongoing unbundling initiatives are pulling it in the direction of ULCC territory. For those arguing you are only paying for what you want, you have fallen right into DL's trap. You are not paying less...you will pay more. The "Basic" business fare will likely remain close to where the fully bundled fare is today. They will then upcharge for things like a seat. I'm sorry, but if I am paying THOUSANDS of dollars...
My take...DL's ongoing unbundling initiatives are pulling it in the direction of ULCC territory. For those arguing you are only paying for what you want, you have fallen right into DL's trap. You are not paying less...you will pay more. The "Basic" business fare will likely remain close to where the fully bundled fare is today. They will then upcharge for things like a seat. I'm sorry, but if I am paying THOUSANDS of dollars for a flight I should not be forced to pay more for a seat.
This ends my international travel on DL unless I am using SkyPesos. I'll preferentially book United or foreign carriers that do not engage in such anti-consumer behavior masked as an :enhancement.
The DL of today is not the DL under Anderson. It's a greedy shell of what it was. They are proud of the fact that they provide fewer and fewer benefits to their most loyal customers. Proud of the fact they make their highest paying customers pay more and more for an increasingly deteriorating and uncompetitive hard and soft product.
That's a bingo! It's the less (amenities) for the same price. If you want the same (lounge, seat selection, etc.), you'll have to pay more. Bad for consumers; great for corporate profits.
and yet AA and UA will do it because they competitively have to on top of a growing list of foreign carriers.
Who are you going to fly in a couple years when they all do this? and it probably won't even take 2 years.
Looks like you have been checkmated.
and for all those that love to lip the name of Anderson, DL is by far stronger now than it was under him. He did a great job but DL has positively moved forward under the current leadership
@ Tim Dunn -- "and for all those that love to lip the name of Anderson, DL is by far stronger now than it was under him. He did a great job but DL has positively moved forward under the current leadership."
That's complete hogwash. Sure, Delta is stronger now in absolute terms, because the industry overall is stronger than it was under Anderson, at least for the "big three," thanks to the extent...
@ Tim Dunn -- "and for all those that love to lip the name of Anderson, DL is by far stronger now than it was under him. He did a great job but DL has positively moved forward under the current leadership."
That's complete hogwash. Sure, Delta is stronger now in absolute terms, because the industry overall is stronger than it was under Anderson, at least for the "big three," thanks to the extent to which credit card revenue plays a part in airline profitability. Comparatively, Delta was more differentiated under Anderson.
which doesn't mean that DL has slipped. UA particularly has fixed alot of its problems. AA is starting to move that direction.
Does DL need to keep reinventing to keep a product gap? yes. but that doesn't change that DL has a pretty substantial headstart on product RIGHT NOW that isn't going to be closed by a couple really aggressive years of catch up by AA or UA.
Announcement of new initiatives by other...
which doesn't mean that DL has slipped. UA particularly has fixed alot of its problems. AA is starting to move that direction.
Does DL need to keep reinventing to keep a product gap? yes. but that doesn't change that DL has a pretty substantial headstart on product RIGHT NOW that isn't going to be closed by a couple really aggressive years of catch up by AA or UA.
Announcement of new initiatives by other carriers doesn't mean they are at all competitive in real life. Press releases about what other airlines will do at some point in the future don't translate into what the majority of customers actually see.
I sure hope the other airlines don't follow. I think this is a step too far and it overcomplicates things.
and yet AA and UA will. I guarantee it.
will you have to utter bad words against your dearly beloved?
Poor little fella.
And yet you just can't help yourself, can you.
@Tim Dunn you are naive enough to think that everyone is going to just fall in line and do this. Remember when DL tried to screw their most loyal customers by increasing the qualifying spend for DM to north of $30K? Consumers balked and DL back tracked. Other airlines learned their lesson and backed down.
And, the fact that could even attempt to argue DL...
And yet you just can't help yourself, can you.
@Tim Dunn you are naive enough to think that everyone is going to just fall in line and do this. Remember when DL tried to screw their most loyal customers by increasing the qualifying spend for DM to north of $30K? Consumers balked and DL back tracked. Other airlines learned their lesson and backed down.
And, the fact that could even attempt to argue DL is better now does nothing but reinforce your absolute bias and lack of objectivity when it comes to DL. DL may be doing well financially (on the back of their AMEX deal), but they have done so while operational reliability has degraded, service excellence has degraded and their product has fallen further behind the competition.
Gaslight and deflect all you want, Tim but facts are facts. You are dead wrong here. Nearly every travel expert sees it, and your refusal to see what is standing right in front of you merely shows that you have no credibility on the matter.
Tim, I value your contributions on the board...when they are based on a logical argument, but not when you start this crap.
Parker has made the best comment in this whole comment thread and I'm ready to retire I think.
Wow, that is high praise. Thank you. :)
Delta provides a very mid long haul business class product, even with recent improvements. Recently few it long haul from Europe to the US by happenstance and man I was underwhelmed. I can't even imagine how much worse the other big three US carriers are.
I seem to remember there being a time where Americans strove for excellence in product and service and not solely excellence in revenue extraction.
LOL. When was this magical time you're referring to (when Americans strove for excellence in product and service)?
The Pan Am Boeing 747 (introduced 1970) epitomized American airline excellence with its upstairs lounge, 34-36" seat pitch even in coach, multi-course meals on real china, complimentary champagne and amenities, higher crew ratios enabling attentive service, and a culture that invested in passenger comfort innovations rather than today's seat-squeezing, fee-stacking, cost-cutting, and viewing customers solely as revenue extraction opportunities.
Sadly I never got to experience this, but my grandfather has regaled me with many a...
The Pan Am Boeing 747 (introduced 1970) epitomized American airline excellence with its upstairs lounge, 34-36" seat pitch even in coach, multi-course meals on real china, complimentary champagne and amenities, higher crew ratios enabling attentive service, and a culture that invested in passenger comfort innovations rather than today's seat-squeezing, fee-stacking, cost-cutting, and viewing customers solely as revenue extraction opportunities.
Sadly I never got to experience this, but my grandfather has regaled me with many a tale (and he included pics, natch).
@All Due Respect,
And do tell us how that ended up for PanAm?
Also you forgot to mention, regulated fares, smoking sections, smaller networks and frequency, oil embargoes, hijackings, movies on projector screens, etc.
@DTWNYC Pan Am's bankruptcy proves the original point - they prioritized service over profit extraction and couldn't survive deregulation's race to the bottom; the question wasn't which era had the best business model but when airlines actually tried to excel at passenger experience, and smoking sections/hijackings/oil shocks don't change that regulated competition forced service innovation while deregulated competition rewards cost-cutting.
It is a balance between what the market is willing to pay and what is offered. For the handful of seats AF sells in Le Premier, it doesnt produce enough overall profit to justify the effort. The sweet spot for profit seems to be in PE for transatlantic Premium.
Not arguing market economics w/ ya. But Delta is not actually adding value for the higher tiers above basic in these bundles. It's taking away value from the existing product and then charging more to add it back on. That, frankly, makes me feel like I'm just a revenue extraction module with little to no thought provided on how my experience could be better.
Most of us are comfortable with being exploited a little. This...
Not arguing market economics w/ ya. But Delta is not actually adding value for the higher tiers above basic in these bundles. It's taking away value from the existing product and then charging more to add it back on. That, frankly, makes me feel like I'm just a revenue extraction module with little to no thought provided on how my experience could be better.
Most of us are comfortable with being exploited a little. This tips the exploitation too far. When laissez faire "what the market will bear" macroeconomics are used as an argument for exploiting the paying customers, that's a patient zero argument for more market regulation to balance the power structure.
Good job Delta - you're taking a kid raised in a right wing home who grew into a right wing young man and encouraging more and more "progressive" economic thoughts.
I can't believe I'm agreeing with you, but I am. (I too was raised in a similar home, but grew up and left home exactly when two things happened at once: (i) deregulation, and (ii) a meaningful decay in service and product.) The airfare a pax currently pays will soon become the bottom rung - basic, no frills, cheapo. They have found a slightly new way to squeeze you. Physically and financially.
I would love to see what comes out of this. People's needs change according to age, lifestyle, etc.... and in my case all I need on a business class is a lie flat seat. Nothing else matters to me. Thus, if I can pay less and have that seat, I am happy to consider. For example:
Fees or restrictions on seat assignments: It is business class and all I care is that the seat...
I would love to see what comes out of this. People's needs change according to age, lifestyle, etc.... and in my case all I need on a business class is a lie flat seat. Nothing else matters to me. Thus, if I can pay less and have that seat, I am happy to consider. For example:
Fees or restrictions on seat assignments: It is business class and all I care is that the seat lies flat. Give me any seat and I am ok.
Fees to change tickets: I usually only book my tickets with high certainty of the dates so I can manage that.
Limited mileage earning or status qualification: I gave up on loyalty with airlines and hotels a while ago. Could not care less about miles or status
No lounge access or restricted lounge access: Usually don't use them and there is always a Priority Pass or Amex lounge around if needed
Restrictions on priority check-in, priority security, and priority boarding: Again, I have a seat and in business class you don't need to fight for overhead bin space. I could be the last to board and it is OK.
In sum, I don't need food or alcohol, an amenity kit, etc... All I need is the seat. A blanket and pillow would be nice but if not, I can bring my own.
I almost completely agree. Retired, all discretionary travel, not motivated by status/points/miles, and with my height, it's all about the legroom and being able to go horizontal. I do like a cocktail and a decent meal on any transcon or medium/long international flight.
Next thing you know, they might try offering a distinct category for civilized service - both at the aerodrome and inflight. A real throwback idea.
Only allowing sky club on D1 basic would be confusing as hell for everyday travelers. I think it would need to be any lounge or no lounge personally. But if this reduces crowding in D1 JFK I’m in support.
@ JustinB -- Wait, I thought the whole point of the Delta Sky Club access policies was to be "confusing as well," so that would match the trend, no?
Hahah very valid thanks for the chuckle
Maybe they will only allow lounge access 83 minutes prior to departure too
Would "basic" domestic first cash booking credit to a partner?
@ Lee -- That's anyone's guess! I suspect it would earn some points and status qualification with a partner program, but who knows.
Corporations and true business travel will pay more for a fully bundled product including refundability while premium leisure and small business passengers will settle for just the core flat bed which is the biggest part of a business class seat.
DL has clearly done enough work on this to know it will work while also looking at its joint venture partners' data.
AA and UA will follow and it could be much more dilutive to them with larger business class cabins.
Tim, a lot of major corporations are scaling back on business class travel for anyone who isn't top-level executives, so the 'golden age' for this is coming to an end for most. It used to be that flights 6+ hours would be automatic Business Class on most portals for the Fortune 500 corporate. Times are changing. Nowadays, lucky if you get a MCE or Comfort extra-legroom economy seat, then can upgrade on your own dime if you wish... but it's usually cost-prohibitive.
@1990 I certainly agree with you here. The modern CEO of today thinks everything can be done on a Teams Call. Even training people in complex technology. It has become ludicrous on what I'm expected to do on a Teams Call. All because CEOs do not want to pay for travel. And consulting firms want to get clients in on the cheap.
Some business travel was unnecessary but between AI and this enforced virtual world...
@1990 I certainly agree with you here. The modern CEO of today thinks everything can be done on a Teams Call. Even training people in complex technology. It has become ludicrous on what I'm expected to do on a Teams Call. All because CEOs do not want to pay for travel. And consulting firms want to get clients in on the cheap.
Some business travel was unnecessary but between AI and this enforced virtual world the three years I have to retirement can't come soon enough.
But we were told by our overlords during (mostly fake) COVID that seeing Grandma through a laptop or phone screen was no different than hugging Grandma in person. And the sheep ate it up.
@ Tim Dunn -- "DL has clearly done enough work on this to know it will work while also looking at its joint venture partners' data."
Which joint venture partner's data are you suggesting that Delta is looking at?
@Tim most savvy corporations and business have pursued a like for like deal that mirrors what government contracts achieve with 30/40% discounts on the lowest flexible fare code so margins are not from these groups but smaller businesses and leisure passengers.
Boo. Hiss. Usually when this happens, they still charge the same for Basic, just increase cost for 'Classic' which includes lounges, seats, and then refundable 'Extra' is still double cost. It's about milking us. When Qatar did this, it was annoying. Sure, sometimes, status gives you lounge, seat anyway, but, other times, it doesn't. We'll see.
Like, QR has Lite, Classic, Comfort, Elite, etc. within Business. I appreciated Ben's post on it in 2021 when it happened: https://onemileatatime.com/news/qatar-airways-business-class-fares/
It kinda makes a difference in DOH, if you have status, OW Sapphire, Emerald you still get into Platinum and Gold North, but not Al Mourjan, The Garden (which is slightly better). Meh.
Bingo dudo
Does this “unbundling” mean that Delta is taking a leaf out of the Ryanair’s book? Surely. Delta will never become a World Class Airline by doing so?
Loser.
Oh John, that sounds so funny coming from the likes of you darlink!
You can always be relied upon to express yourself so eloquently …. thank you, now do grow up.
What is a darlink?